Wednesday, February 24, 2010
About 97,000 homeowners in the government’s mortgage modification program have been stuck in a trial period(loan Mod Limbo) for over six months. Most of them, about 60,000, have their mortgages with a single mortgage servicer, JPMorgan Chase.
Trial periods are designed to last only three months, after which mortgage servicers are supposed to either give homeowners a permanent modification or drop them from the program. According to a ProPublica analysis, about 475,000 homeowners have been in a trial modification for longer than three months.
A couple of key points on HAMP I've mentioned before: When the HAMP program began, the requirements for putting a borrower in a trial program varied by servicer. Some servicers put anyone who answered the phone, and said they'd make a payment, in to a trial program. Other servicers required homeowners to provide some initial documentation of income, and make the first payment, before putting them in a trial program.
Although the HAMP trial program was supposed to last 3 months, the period was extended to 5 months - and then eventually to the end of January (no matter when the trial started).
This suggests that there will be fewer trial modifications per month in the future (this is already happening) and a surge of trial cancellations in February. Bottom line on all this is there will be more deals for astute buyers over the next 12 months.
Wednesday, February 24, 2010
Saturday, February 13, 2010
Click on link to see why Chico and other cities are not getting loan modification help
This video show the inside deals that bankers have with the Fed and how its stops all Loan modifications cold. Makes you feel real warm about your Government, when the wolf at the door are one in the same.
Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales
That old saying" those with the money make the rules" but this is just , way over the line, as its now... those that print the money and make the laws also screw the public.
Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales
That old saying" those with the money make the rules" but this is just , way over the line, as its now... those that print the money and make the laws also screw the public.
Thursday, February 11, 2010
Are loan Modifications the way to go?
The government should be applauded for its efforts to keep people from losing their homes, but there is a side of the Obama administration’s Making Home Affordable loan-modification program that few people are considering: Modifying a home loan may make it necessary for consumers to rely on bad credit loans if they want to borrow money for a car in the future. Susan Tompor, a columnist for the Detroit Free Press, wrote in late 2009 that homeowners who successfully apply for a mortgage loan modification under the Obama program can see their credit scores take a dip. If that dip drops their credit scores lower than 620, these homeowners may have to turn to bad credit loans if they need to finance a purchase within the following year or two.
Bad Credit Loans
Bad credit loans aren’t necessarily a bad thing. Many people rely on them every year to buy homes or cars. Not everyone has perfect credit. Many consumers have missed payments in the past. Others have even had collection agencies calling their homes. Bad credit loans give these consumers the chance to own a home or car. However, bad credit loans generally cost more than do conventional mortgage or car loans. That’s because lenders charge higher interest rates for these loans. It’s a way for them to protect themselves in case the borrowers applying for these loans default on their payments. It makes financial sense, then, for borrowers to take the steps necessary to keep their credit scores high enough so that bad credit loans aren’t their only options.
Making Home Affordable
The Obama administration’s Making Home Affordable program offers financial incentives to mortgage lenders and banks to persuade them to work with struggling homeowners. The goal is to modify the mortgage loans held by these homeowners so that the homeowners can afford to pay them. This prevents homeowners from losing their residences to foreclosure. The problem is, receiving a mortgage loan modification is counted as a negative by the three credit bureaus — TransUnion, Equifax and Experian — that compile credit reports on consumers. This lowers homeowners’ credit scores, making it more likely that they will have to rely on bad credit loans next time they need to finance a large purchase.
Bad Credit Loans
Bad credit loans aren’t necessarily a bad thing. Many people rely on them every year to buy homes or cars. Not everyone has perfect credit. Many consumers have missed payments in the past. Others have even had collection agencies calling their homes. Bad credit loans give these consumers the chance to own a home or car. However, bad credit loans generally cost more than do conventional mortgage or car loans. That’s because lenders charge higher interest rates for these loans. It’s a way for them to protect themselves in case the borrowers applying for these loans default on their payments. It makes financial sense, then, for borrowers to take the steps necessary to keep their credit scores high enough so that bad credit loans aren’t their only options.
Making Home Affordable
The Obama administration’s Making Home Affordable program offers financial incentives to mortgage lenders and banks to persuade them to work with struggling homeowners. The goal is to modify the mortgage loans held by these homeowners so that the homeowners can afford to pay them. This prevents homeowners from losing their residences to foreclosure. The problem is, receiving a mortgage loan modification is counted as a negative by the three credit bureaus — TransUnion, Equifax and Experian — that compile credit reports on consumers. This lowers homeowners’ credit scores, making it more likely that they will have to rely on bad credit loans next time they need to finance a large purchase.
Tuesday, December 8, 2009
Things may not turn around soon according to this Expert
This Expert says " the feds are out of bullets" so far as having more things to do to help the economy. It appears to her that there will be a major correction sometime early next year. As you watch this video draw your own conclusions.
A lot of her facts and conclusions are hard to refute. The points about the big state and their troubles(debts)that will contribute to more job losses, is scary. After watching this you cannot help but feel that maybe the administration is headed in the wrong direction. Like James Carvel, during the Clinton election, said " It's the economy stupid". Well it is for certain and the folks know that for sure.
Well, when the consumer fails to spend for fear of bad times ahead, then I can only say that it a Leadership issue or rather a lack of leadership( from our President). If confidence is lacking with the American people...well the "buck stops"(and starts) with the President.
A lot of her facts and conclusions are hard to refute. The points about the big state and their troubles(debts)that will contribute to more job losses, is scary. After watching this you cannot help but feel that maybe the administration is headed in the wrong direction. Like James Carvel, during the Clinton election, said " It's the economy stupid". Well it is for certain and the folks know that for sure.
Well, when the consumer fails to spend for fear of bad times ahead, then I can only say that it a Leadership issue or rather a lack of leadership( from our President). If confidence is lacking with the American people...well the "buck stops"(and starts) with the President.
Sunday, December 6, 2009
Tom, "Your Great Home" deal guy find some super Chico deals
Northern California real estate deals are showing up on a regular basis. More and more high end homes are now in trouble, as a new wave of non sub-prime loans home owners are underwater. This is bad news for the owners but a great chance for investors/home buyers to buy premium properties at very low prices. Investor and home buyer are finding some of the best buys in Chico, California. These homes in Canyon Oaks are a small sample of whats out there.
ck this video out --
Fast sales in this gated community with a beautiful Golf course and club house have shown that even in a down market buyers are willing to pull out their check books for a good deal.
If you are intrested you should move fast as these homes tend to sell rather quickly. New homes are showng up every day on the market as owners bail to save their credit taking the short sale route to save something, so contact me if you'ed like to take a look see.
ck this video out --
Fast sales in this gated community with a beautiful Golf course and club house have shown that even in a down market buyers are willing to pull out their check books for a good deal.
If you are intrested you should move fast as these homes tend to sell rather quickly. New homes are showng up every day on the market as owners bail to save their credit taking the short sale route to save something, so contact me if you'ed like to take a look see.
Saturday, December 5, 2009
Moody's: Option Arms show "Dismal Performance!"
The total count of Option ARMs outstanding are highly concentrated among a few states. California, having a large[er] number of troubled home(TARP) loans, would make you think that more distressed "homes for sale", will soon be in your local MLS. The upper priced homes in Chico will surly be in play ,if this trend hold any longer... Contact you realtor for "Good deals".
[The Option ARM] sector shows “dismal” performance, with more than 40% of borrowers 60 or more days past due on payments. And many of these loans have yet to experience a recast event, when initial minimum monthly payments jump as much as 60%, according to sources interviewed by HousingWire for an upcoming issue.
“Even though borrowers with Option ARM loans have the option to make monthly payments typically lower than the accruing interest on the loan, many borrowers are choosing a different option–not making any payment at all.”
...
Negative equity is a key driver of weak performance — as well as a more predictive measure of default than unemployment — particularly among Option ARMs.
...
Negative equity is a key driver of weak performance — as well as a more predictive measure of default than unemployment — particularly among Option ARMs.
“There is little hope that most of these [delinquent] borrowers will start making payments again if no principal is forgiven,” Moody’s said. “Forbearance does not eliminate the obligation to repay the loan principal, it only delays it. And many delinquent borrowers are potentially so far underwater that it would take close to a decade for them to attain any positive equity in their home.”
For their borrowers, modifications that lower the interest or extend the term, just delay the inevitable - and really makes the borrowers into renters.
[The Option ARM] sector shows “dismal” performance, with more than 40% of borrowers 60 or more days past due on payments. And many of these loans have yet to experience a recast event, when initial minimum monthly payments jump as much as 60%, according to sources interviewed by HousingWire for an upcoming issue.
“Even though borrowers with Option ARM loans have the option to make monthly payments typically lower than the accruing interest on the loan, many borrowers are choosing a different option–not making any payment at all.”
...
Negative equity is a key driver of weak performance — as well as a more predictive measure of default than unemployment — particularly among Option ARMs.
...
Negative equity is a key driver of weak performance — as well as a more predictive measure of default than unemployment — particularly among Option ARMs.
“There is little hope that most of these [delinquent] borrowers will start making payments again if no principal is forgiven,” Moody’s said. “Forbearance does not eliminate the obligation to repay the loan principal, it only delays it. And many delinquent borrowers are potentially so far underwater that it would take close to a decade for them to attain any positive equity in their home.”
For their borrowers, modifications that lower the interest or extend the term, just delay the inevitable - and really makes the borrowers into renters.
Friday, December 4, 2009
Northern California Home owners grab new Loan Modification
Many North state Chico Home owners in an effort to modify mortgages are heading into overdrive in a bid to make sure that having received trial loan modifications can have that workout made “permanent.” Very few , if any, to date have been able to qualify for a permanent loan modification.
So far, most criticism on the Home Affordable Mortgage Program, i.e., HAMP, has centered on why so few borrowers with trial modifications are converting into permanent modifications. The common refrain from loan servicers is that they haven’t been able to get paperwork from borrowers to help finalize the loan modification — important because servicers get paid for each mod, and need to prove that borrowers actually face hardship.
But at ForeclosureRadar’s blog, Sean O’Toole raises a different, potentially more problematic issue: “Permanent” loan modifications last for only five years. He posits that reason for the low uptake of the loan modification program:
Maybe borrowers have figured out that this program is really only another exotic mortgage like one they fell prey to when they bought or refinanced the house that resulted in their current predicament. HAMP and the administration’s newly announced campaign isn’t digging borrowers out of a hole. It’s only digging them a new one, and delaying the inevitable.
To be sure, the five-year period tries to give borrowers a lifeline—a chance to get their life back on track. In five years, the thinking behind the plan goes, more borrowers may be financially whole again, able to make their mortgage payments, or, if housing prices have stabilized, some may be able to refinance or sell their homes.
But what about those borrowers who have loans modified who aren’t ever going to be able to afford their higher payments, which is what they’ll have to pay after the five-year modification expires? Are loan mods just creating a new batch of loan resets and delaying the inevitable foreclosure for borrowers who bought too much home, or who were sold a loan that they didn’t understand and couldn’t afford? Mr. O’Toole is blunt in his criticism:
The new hole offered by HAMP is all the downside with none of the upside.
The downside: exotic re-financing, by which they make payments affordable today, but leave homeowners in the same boat down the road when payments ratchet back up after 5 years.
The bonus downside: there is no reasonable expectation that home values will appreciate anywhere near enough to get these loans above water before the 5 years is up, or before the homeowner runs into a real life event like job loss, divorce or job relocation — leaving them stuck in an upside down prison of debt.
The column in today’s NYT by Floyd Norris raises the same prospect, while offering a little more leeway to the administration. While he writes that it’s “conceivable that this process is doing more to drag out the foreclosure crisis than to alleviate it,” he adds:
“[P]erhaps we should not be too critical of anybody involved in the modification effort, either the administration or those trying to arrange modifications. The mess was made years ago, when bad loans were made and the ready availability of credit was driving house values to unsustainable levels. Cleaning it up is not going to be a pleasant experience for anyone.”
So far, most criticism on the Home Affordable Mortgage Program, i.e., HAMP, has centered on why so few borrowers with trial modifications are converting into permanent modifications. The common refrain from loan servicers is that they haven’t been able to get paperwork from borrowers to help finalize the loan modification — important because servicers get paid for each mod, and need to prove that borrowers actually face hardship.
But at ForeclosureRadar’s blog, Sean O’Toole raises a different, potentially more problematic issue: “Permanent” loan modifications last for only five years. He posits that reason for the low uptake of the loan modification program:
Maybe borrowers have figured out that this program is really only another exotic mortgage like one they fell prey to when they bought or refinanced the house that resulted in their current predicament. HAMP and the administration’s newly announced campaign isn’t digging borrowers out of a hole. It’s only digging them a new one, and delaying the inevitable.
To be sure, the five-year period tries to give borrowers a lifeline—a chance to get their life back on track. In five years, the thinking behind the plan goes, more borrowers may be financially whole again, able to make their mortgage payments, or, if housing prices have stabilized, some may be able to refinance or sell their homes.
But what about those borrowers who have loans modified who aren’t ever going to be able to afford their higher payments, which is what they’ll have to pay after the five-year modification expires? Are loan mods just creating a new batch of loan resets and delaying the inevitable foreclosure for borrowers who bought too much home, or who were sold a loan that they didn’t understand and couldn’t afford? Mr. O’Toole is blunt in his criticism:
The new hole offered by HAMP is all the downside with none of the upside.
The downside: exotic re-financing, by which they make payments affordable today, but leave homeowners in the same boat down the road when payments ratchet back up after 5 years.
The bonus downside: there is no reasonable expectation that home values will appreciate anywhere near enough to get these loans above water before the 5 years is up, or before the homeowner runs into a real life event like job loss, divorce or job relocation — leaving them stuck in an upside down prison of debt.
The column in today’s NYT by Floyd Norris raises the same prospect, while offering a little more leeway to the administration. While he writes that it’s “conceivable that this process is doing more to drag out the foreclosure crisis than to alleviate it,” he adds:
“[P]erhaps we should not be too critical of anybody involved in the modification effort, either the administration or those trying to arrange modifications. The mess was made years ago, when bad loans were made and the ready availability of credit was driving house values to unsustainable levels. Cleaning it up is not going to be a pleasant experience for anyone.”
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