Finally, Banks Walk the Walk; Outrun Gov't Talk

The reality of loan modifications is finally coming to be. A great friend successfully renegotiated a large reduction in his mortgage after staying on top of the bank's modification dept. for several months - - unrelentingly! Now, banks appear to finally be catching their stride of preventing much more costly foreclosures by enabling modifications of their own - - even when the reach of our gov't's programs exceed their grasp. More: Surprise! Banks offer more modifications than Obama plan - Aug. 30, 2010 - David

Short sale vs. loan modification

Your home value is underwater.  Not like in the Nashville flooding disaster, but as in home value less than mortgage debt.  Should you consider a short sale, loan modification, or another option?  Tara-Nicholle Nelson offers a smart perspective in her article 3 tips for a successful short sale | Inman News.

Because each of these options is somwhat hit or miss, the answer may be "all of the above." - David

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Try forbearance to fix late mortgage

Try forbearance to fix late mortgage.  This is a lesser-known term than "loan modification," but in some cases it can give a homeowner time to get back on his/her feet.  Definitely worth a try if you are in need of mortgage relief. -David

BofA to start reducing mortgage principal - Yahoo! News

Despite the legal motivation, B of A is beginning a very important process.

Quoting from the Yahoo News article, "The bank, the largest mortgage servicer in the country, said Wednesday it will forgive up to 30 percent of some customers' total mortgage balances. The homeowners must have missed at least two months of mortgage payments and owe at least 20 percent more than their home is currently worth."

This should put pressure on other lending institutions to follow suit, preventing a slew of foreclosures and short sales. Good news indeed! - David

Southern California Home Buyer's Fair - The Presentations

Miss the recent Southern California Homebuyer's Fair?  Well, not completely.  Here are the presentation materials from the many seminars at the Homebuyers Fair!  Topics included the California housing market outlook, finding the right investment properties, and negotiating a loan modification. - David

IRS tells homeowners how to get tax relief if a lender forgives part of their debt - latimes.com

Here's how to get tax relief if a lender forgives part of your debt.  This is an important point, as debt forgiveness is typically a taxable event (should you be fortunate enough to successfully negotiate a principal reduction or short sale, assuming you're unfortunate enough to need one). 

Early in the housing crisis, the Bush II administration initiated a policy, which remains today, exempting mortgage debt forgiveness from being taxable. - David

HAMP: Permanent loan mods up 45% | Inman News

Loan modifications are on the rise! This is good news for homeowners and the real estate market as a whole, because it means greater market stability and less foreclosures ahead.

Quoting from the Inman News article, "Borrowers who make their monthy payments on time for a year are eligible to earn up to $1,000 applied to their outstanding mortgage balance." - David

ROI: When It's OK to Walk Away From Your Home - WSJ.com

Do you agree with this statement?  "Walking away from debts is as American as apple pie."  How about this one? "The economy is fundamentally amoral."

To me, the first statement is offensive, the second represents a real quandary in a system based upon honesty and fair dealing, and both define the dark side of the moral dilemma

How lenders decide whether to modify a mortgage - MarketWatch

Ever wonder how lenders decide whether to modify a mortgage?  Sit down, relax, take a deep breath, and read this (partial) answer. - David

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FT.com - Cleaning up toxic mortgage assets a slow task

Nearly all new mortgage lending is coming through government-sponsored entities (GSE's) like Freddie Mac and Fannie Mae.  These entities cap the level of individual mortgages, such that the low end of the market is supported.  But what about the higher end - - homes requiring larger "jumbo" mortgages?  That money comes from private investors, and those sources dried up when the mortgage crisis hit.  Why haven't private sources re-entered the marketplace?  Because they haven't figured out what to do with their existing portfolios yet!  One factor in particular is the struggle from the holders of first and second mortgages.  As this Financial Times article explains, second mortgage holders are no longer willing to allow first mortgage holders to exercise their "first in line" rghts when it comes to loan modifications and collections, slowing the process for all. - David

What Mortgage Modifications Say About the Housing Market - CNBC

B of A, a huge mortgage lender, has staffed up its troubled loan team and signalled a greater willingness to grant loan modifications.  But this is off a tiny base, so a relatively small proportion of homeowners needing help have actually received it. Still, it's moving in the right direction.  - David

Mortgage Mess Breeds Unlikely Allies - WSJ.com

Jim Hagerty gives some valuable insights on the pros and cons of principal reductions in the minds of key lenders and investors.  Though the government seems to prefer extending due dates and lowering interest rates, the number of homes that are presently underwater tell us intuitively that this is an insufficient and unrealistic solution.  Political and fairness issues?  Sure, but do we want to help homeowners and the real estate economy or don't we? - David

Is Treasury Admitting Mod Defeat? - CNBC

HAMP, the government's Home Affordability Modification Program, was introduced with great fanfare but has benefitted relatively few borrowers. That's a shame, because a properly designed and adminstered program could have helped a lot of people keep their homes. Now there's a new program, HAFA, the Home Affordable Foreclosure Alternatives program. It's emergence, and recent comments from Treasury advisors, suggest that the Treasury Dept may be admitting the failure of HAMP, instead endorsing short sales and deeds in lieu of foreclosure. - David

Treasury seeks to speed up mortgage modifications - MarketWatch

This program is yet to be seen, but the Feds have finally incorporated what's been needed all along: an incentive for loan servicers to be receptive, responsive, and participative when homeowners come calling for mortgage modifications.

Treasury seeks to speed up mortgage modifications - MarketWatch

So pleased to see the Federal Government show even the slightest faith in incentives, which in the business world we know can work wonders! - David

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Rewards for responsible homeowners | Inman News

A really smart idea by Tom Kelly, columnist for Inman News: Let's reward those who have HONORED their mortgages!  Proposed to Congress by the National Assn of Realtors, but they haven't gotten it...yet. - David

Rewards for responsible homeowners | Real Estate and Technology News for Agents, Brokers and Investors | Inman News

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Loan-Mod Program Helps Housing Market - WSJ.com

The program has been a failure, but it has slowed foreclosures nonetheless. - David

Loan-Mod Program Helps Housing Market - WSJ.com

Paperwork Woes Plague Mortgage Plan - WSJ.com

Watch the deadline if you're looking for a loan modification. Like so many programs, participants often wait till the last minute and then find they're last in line (or worse, too late). - David

Paperwork Woes Plague Mortgage Plan - WSJ.com

Re-defaults declining. Maybe we're starting to get it right?? - WSJ

Re-defauls on modified loans have been enormous, but are seeing some improvement. - David

http://online.wsj.com/article/SB126144913572001111.html

Help for Homeowners update

Latest on the Help for Homeowners loan modification assistance program. - David

BofA lagging in loan mods - Inman News

BofA is bringing up the rear in loan modifications as we learn in this Inman News article.

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