Loan modifications walk the plank, California homeowners don’t have to follow
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Do you personally know any homeowners who received a permanent mortgage loan modification this year?
- No (74%, 161 Votes)
- Yes (26%, 57 Votes)
Total Voters: 218
Nationally, banks modified 558,000 mortgage loans in the first half of 2011 – a 42% decrease from the 968,000 modifications made in the first half of 2010, says a report by a private-sector trade group of mortgage industry professionals.
A drop in delinquencies also accompanies this staggering nosedive in modifications. Nationally, 2.7 million loans were delinquent for 60 days or more in the first six months of 2011 – 27% down from the 3.7 million delinquent loans in the first six months of 2010. This comes out to about one million fewer delinquent borrowers in 2011 from the previous year.
first tuesday: For the nation, this report affirms a speedy real estate recovery is pure naivety. But this is national. The numbers are even worse for us in California where 2,500,000 negative equity homes (and growing) remain an eyesore on the Golden state landscape.
The huge decline in loan modifications, in addition to a drop off in Notice of Default (NOD) recordings, demonstrates lenders are dilatory and possibly disorganized, a trend we have noted this past year. And as for the drop in delinquencies nationally, assuming those one million fewer delinquent borrowers signal improving conditions in the California real estate market before 2015 or 2016 is wishful thinking. (Sporadic buyer demand for some condominium project or horizontal subdivision does not make a market.)
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About The Author
ft Editorial Staff
is the writing staff comprised of legal editor Fred Crane, In-House Broker Consultant Fernando Nunez and writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Jeffery Marino, Carrie B. Reyes, Sarah Cantino, Matthew Taylor and Matthew Shade.
Realtors Missed $500,000 check given to every SSI holder/ Money is printed.and availiabe soon the DIAMOND political Party will reveal this yeah
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What in the world are you talking about?
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Keep up the good work. I really believe that you guys know what you are doing and I appreciate
the articles that you write.
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I got admit I am a bit shocked that you would encourage strategic default. The problem with it is that it does not guarantee a modification and to save up to purchase at trustee sale, seems pretty risky, especially because its unlikely that you will have enough cash to purchase by the time of the sale. Perhaps I am missing your exact point.
Nonetheless, we have been in the loan modification business since 2008 and I am now discouraging homeowners from loan modifications if they can’t afford an increased payment and/or their primary goal is principal reduction because the former happens often and the latter is rare.
That being said we have a unique program that if successful the homeowner can eliminate their mortgage entirely and net as much as an 80% principal reduction. Sound too good to be true, well its not, there are judges ruling in favor of this nationwide, but there is no room for error so we are very selective of the files that we take on.
Contact me to further discuss. 781.REDUCE.8 (781.733.8238).
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Given the “credit hit” that homeowners get from a strategic default, and the potential future difficulty in buying not only homes, but other items on credit as well, I think a short sale is often in the best interests of the client. I agree that strategic default has the ability to “push the bank’s buttons,” but unless MILLIONS of homeowners do so all at once, the banks will simply ignore the homeowners, and go on with business as usual. They don’t have any real “stake” in the homeowners’ success or failure, unless the pressure becomes either financially or politically so great they can’t ignore it.
I am not suggesting short sales because brokers and agents make money from them (it would be much better for us if all sales were traditional sales), but because I believe that the strategic default scenario makes much more sense done “en masse,” where it has a chance of altering the future.
Another thing: The lenders, politicians, and realtors are all crowing about the drop in foreclosures and NOD’s. However, according to Lender Processing Services, DELINQUENCIES are up. See DSnews.com for the story:
http://www.dsnews.com/articles/industrys-past-due-mortgages-climb-above-65-million-2011-08-16
AND
http://www.dsnews.com/articles/lps-finds-serious-delinquencies-outnumber-foreclosure-sales-501-2011-06-29
DSNews.com is an excellent resource for all things about delinquency and default.
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There’s a lot of good stuff in this article, information that I’ve long been espousing to underwater property owners.
Many have come to realize they’ll be paying for many years while waiting for that asset to eventually recover its value.
Many savvy homeowners are milking their mortgage and property tax free stay for as long as possible, all the while saving a bunch of $$. And then, when the trustee sale finally occurs, moving into a rental home and enjoying better housing value.
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“Save enough for a down payment on a replacement home.”
What??
I often wonder where you guys get your info on mortgages in today’s marketplace, since it’s not at all with the times.
There’s no buying a replacement home — at least not with conventional financing — immediately following a foreclosure. The current lockout is 7 years for Fannie Mae, absent a lender exception for “extenuating circumstances”, in which case it can be 3 years with certain restrictions.
Deed In Lieu of Foreclosure has 2 – 7 year lockout and down payment requirements.
FHA lockout is 3 years following a foreclosure or Deed In Lieu.
There’s also no safe haven in the rental market folks. When you don’t own the home you rent you’re susceptible to your landlord losing the property to foreclosure too and being relocated.
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A friend of mine just lost his home, the lender strung him along for
over a year and half trying this so called loan modification program.
Thank the powers to be for that.
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Whatever happenned to people abiding by the contract they signed? All this discussion seems to say “it’s okay to default if your house value has decreased”. Where does it say that in the contract? The banks loaned people hundreds of thousands and you espouse the view that defaulting is okay. If you loaned your own money and the property value declined, you wouldn’t be okay with a strategic default.
Why is the bank the villan? Where is it written that the agreement to pay back borrowed money goes away when property value shifts downward? Would everyone agree to pay the bank more if the values go the other way and increases?
Get your values squared away and quit finding excuses. If you have to default then do so. But don’t give people an excuse.
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I had my loan modify more than a year with lower interest with lower monthly payment. It did not reduce my principal.Since my Bank was bought out byChase. They want me submitt another loan modification. At present I am unemployed and i would not qualify any more. But I am still payin on time. My property had decline 50% below which my property is underwater. I have call several time Chase to find out my previous status of my current modification that was approve and accept a year ago by WAMU. They cannot not get me a definite answer of this. They said i have to submit another loan application for a modification. What for ??????????????????????????
This is very upsetting and depressing. I have no power to do anything. And I am afraid to consult with an atttorney or any company. They might just want your money. Anyway I don’t have. Is there anyone that is in a similar situation I am. And was able to get help. I want to keep my property. But my bank is screwing us and making us confused and complicated. I hope the Government will stepin and penalize these Banks who are making homeowners life miserable. I hope and pray we get some real help out there.
wamu
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@ Steve Allen.
Thanks for saying what no one else wants to. You’d think that there’s an entitlement for a loan mod built into every Note these days, given what people’s expectations are.
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1st time homebuyers who in a good market would be renters are taking advantage of the bank owned properties at 50% on the dollar. The middle class buyer how struggled to get that house will not recapture thier loss in the next few years. The only alternative is to walk on the loan.
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