LOAN MODIFICATION - The government's failure to help home owners is an open invitation to scam artists to swindle home owners out of what little they have left.
George Souto posted an interesting article about mortgage modification spam by e-mail. Of course, that's not the only venue for companies offering mortgage modification services these days. These scam artists are crawling out of the woodwork.
There are about 15,000,000 home owners at risk of losing their home due to mortgage default. Fannie Mae will not assist a home owner whose mortgage balance is more than 105% of the market value of their home. Let's see. In many counties in many states, property values have dropped by 25-75%.
Case #1. Buyer financed their home purchase in 2005 with 80/20 conventional loan sold to Fannie Mae.
The purchase price was $350,000.
The first trust is about $280,000.
The market value of their home is now about $225,000.
Clearly, the mortgage balance (first trust) is more than 105% of market value. In fact, it's about 120% of market value. This home owner and millions of others are ineligible for loan modification help from Fannie Mae.
I've tried and tried to figure out or find the answer to why this requirement was included in the Fannie Mae Mortgage Modification Plan. It is completely nonsensical since it serves only to exclude millions of home owners in need of mortgage modification.
This isn't the first time Fannie Mae has failed the home buying consumer and home owners.
Case #2. Buyers financed their home in 2006 with an 5% down mortgage sold to Fannie Mae.
The purchase price was $400,000.
The mortgage is $360,000.
The market value of their home is now about $240,000.
Clearly, these buyers will have no relief from Fannie Mae.
ENTER THE MORTGAGE MODIFICATION COMPANY.
"STEP RIGHT UP FOLKS. GET YOUR MORTGAGE MODIFICATION HERE"
We'll talk to your mortgage company. You don't have to.
You don't need good credit!
No mortgage payments until your mortgage is modified!
We can stop foreclosure.
We can perform this magic for you with a modest up front fee of only $1,500 (often one months mortgage payment) to offset our expenses to set up your personal loan modification plan.
Method of payment: cash, cashiers check, check by phone, money order.
In some areas, the "mortgage modification companies" are conducting seminars with fees as high as $2,000 - $3,500 up front. Conducted by "motivational speakers" similar to "self improvement" gurus, the distressed home owners are persuaded that the presenters can solve all of their mortgage problems. These programs are highly organized, well presented and are praying on the naivete of the average home owner who is faced with the loss of their home.
$ $ $ $ TRILLIONS FOR BANKS but MEAGER RESOURCES FOR HOME OWNERS $ $ $ $
THE FEDS TO THE RESCUE?? While the FBI is aware of the problem, with about 2,000 cases under investigation, their report is that they do not have the resources to track, investigate and refer cases for prosecution due to a lack of resources and manpower.
In the mean time, the distressed home owners whose morgage balance is more than 105% of the market value of their home just wait for the money to run out, the registered letter from the mortgage company to arrive.
When they log on to check their e-mail tomorrow morning, they may receive a persuasive spam offering to solve all of their problems and save their home.
Tuesday, April 21, 2009
Friday, April 17, 2009
Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing
Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
Thursday, April 9, 2009
Using Technology to Your Advantage - Social Networking Connects Agents with Homebuyers
RISMEDIA, April 9, 2009-Facebook, Twitter and YouTube are among the social networking options used by the real estate industry to connect with consumers who are seeking a combination of technology and human touch. The national meeting of the Real Estate Services Providers Council (RESPRO), a national non-profit trade association of real estate broker-owners, real estate franchisers, mortgage lenders, title insurers and agencies, homebuilders, home service and settlement providers united to deliver cost efficient services to consumers through strategic alliances across the home-buying industry, found leaders sharing new strategies to reach “echo-boomers” heavily using computers to research home sales.
Sherry Chris, president and CEO of Better Homes and Gardens Real Estate, said 80% of consumers now use the Internet to research homes and a real estate agent to complete the transaction.
“Tomorrow’s consumer will want to visit sites with as much information as possible.” Chris said. “It will be a combination of the consumer and agent using technology. People are looking for the new opportunity, the new way and help from technology. ”
“[Real estate] companies who [also] have mortgage and title companies are going to be the survivors,” Champion Realty president and CEO Jon Coile said. “The ones who don’t are not.”
For more information, visit http://www.respro.org/.
Sherry Chris, president and CEO of Better Homes and Gardens Real Estate, said 80% of consumers now use the Internet to research homes and a real estate agent to complete the transaction.
“Tomorrow’s consumer will want to visit sites with as much information as possible.” Chris said. “It will be a combination of the consumer and agent using technology. People are looking for the new opportunity, the new way and help from technology. ”
“[Real estate] companies who [also] have mortgage and title companies are going to be the survivors,” Champion Realty president and CEO Jon Coile said. “The ones who don’t are not.”
For more information, visit http://www.respro.org/.
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