The two largest owners of mortgages will not lower the principal on the loans they back – that’s a clear message for all those troubled homeowners. Fannie Mae and Freddie Mac, which are controlled by the federal government, will not lower the principal on the loans they back, instead opting for interest rate reductions and term extensions when modifying loans. But their stance is out of synch with the Obama administration, which is seeking to expand the use of principal writedowns. In late March, it announced servicers will be required to consider lowering balances in loan modifications. Asked whether they will implement balance reductions, the companies and their regulator declined to comment.
The Treasury Department also declined to comment. What’s holding them back is the companies’ mandate to conserve their assets and limit their need for taxpayer-funded cash infusions, experts said. If Fannie and Freddie lower homeowners’ loan balances, they are locking in losses because they have to write down the value of those mortgages. Essentially, that means using tax dollars to pay people’s mortgages. Between them, they have received $127 billion — and recently requested another $19 billion — from the Treasury Department since they were placed into conservatorship in September 2008, at the height of the financial crisis. Treasury and the companies have already set aside $75 billion for foreclosure prevention, which can be spent on interest-rate reductions or principal write downs. Meanwhile, a growing number of loans backed by Fannie and Freddie are falling into default.
PLUS: Look what Diana Olick said:
Diana Olick – Banks Ignore Delinquent Borrowers
“Some encouraging signs on the foreclosure front may not be as rosy as some are reporting. RealtyTrac, the online foreclosure sale site, shows a 9 percent dip in the number of properties with foreclosure filings in April, month-to-month. The driver of that dip is a big drop in new notices of default. The final stage of foreclosure is bank repossessions (REO) shot up to a new record high, up 45 percent from a year ago. When I first read the report I thought, okay, we knew there was a big pipeline of loans that would not get modified and would have to come out the end at some point; now is that point. The fact that fewer loans are going into the pipeline should be our focus, and that’s a positive. That’s what I thought until I interviewed RealtyTrac’s Rick Sharga. “People are sitting in their houses not paying their mortgages, and the banks are letting those delinquencies extend longer and longer periods of time before they put them in foreclosure,” Sharga told me. That, he adds, is the main reason we’re seeing lower numbers of new defaults. The borrowers are in default, but the banks aren’t paying attention, so they don’t show up in the numbers.
“The fact that we have six to six and a half million loans that are either seriously delinquent or in foreclosure also suggests we are not nearly out of the woods. If we just started to absorb that inventory at the pace we’re currently seeing new foreclosure proceedings we have about a 50 to 55 month supply of loans that yet have yet to be processed, so we have a way to go before we are out of the mess,” he added. Sharga makes a compelling point. A lot of folks are either falling out of the trial modification period or not qualifying in the first place, and those loans are moving quickly to bank repossession. California-based mortgage analyst Mark Hanson adds perspective with a look at “cancelled foreclosures.” These are not tracked by RealtyTrac, but they “bite right out of Notices of Default and foreclosures, so to get a real idea of how ‘credit’ is doing, you have to add a certain percentage back.” That’s because Hanson believes the redefault rate on these modifications will be at the very least 50 percent 6-19 months out. “
What are your thoughts about this?
Mike Warren Interviews Jeff Kaller & Mr. X on Commercial Short Sales
On our weekly training we are going to be teaching about commercial property short sales and how anyone can get in on the ground floor opportunity. We all know commercial property lags behind the residential market about 18 months. Well guess what? Here come the commercial property foreclosures. I made a short video about the call. Check it out.
Get on the call: http://misuniversity.com/webinar
To multiple income streams.
Mike Warren
Mike Warren interviews Rick Dawson on how you can make money by giving people money that is owed to them by the county.
Ingenious niche method that helps people get the money they are owed and puts $5k in you pocket in 30 days.
Watch the video below to see what Rick will be teaching on the webinar. Rick will even be going over actually websites he uses and how simple it is for you to duplicate.
Get on the WEBINAR –> http://misuniversity.com/webinar
RISMEDIA, October 27, 2009Agents involved in foreclosures and short sales may need to begin to disclose the possibility of serious property transfer defects associated with these types of lender controlled sales.
If recent court decisions are any indication, we could be…
Virtual Culture Vs. Brick and Mortar the Changing Technology Landscape
RISMEDIA, October 27, 2009Its amazing how much can change in just two short years. Two years ago I wrote an article titled Is the End in Sight for Brick and Mortar?
I just went back and read the article and it…
Point2 Technologies Wins Achievement in Business Excellence Award
RISMEDIA, October 28, 2009Point2 Technologies Inc. was recently recognized by the Saskatchewan Chamber of Commerce with the prestigious Achievement in Business Excellence (ABEX) Award. Nearly 700 government and business personalities attended this years high profile event, organized by the Saskatchewan…
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Whatever sympathies you had for yourself may not help when it comes to preventing foreclosure. So, you want to let them out of the window for now. The bets are off. Now the law of the jungle applies – it’s to kill or be killed. And you had better hope you do the killing, otherwise…
2 Important Ways to Avoid Foreclosure
Experiencing foreclosure is not only stressing, but it can have effects on your credit history and scores, thus, affect not only your present finance but your future as well. Although many people do not make attempts to avoid this, it is important that you know that there are ways in which foreclosure can be prevented.
Free List of Foreclosed Homes – Search All Available Foreclosures Absolutely Free of Cost!
Banks and lenders who are selling foreclosed homes do not aim for profits, they are simply trying to regain the amount owed to them for a defaulted mortgage. They are eager to dispose the property as quickly as possible, making foreclosed properties the place to look if you are on the lookout for that good bargain. Most foreclosed properties are priced far below their real market value, sometimes as much as 80%.
Trustee Sales and the Foreclosure Process
Trustee Sales are the final step in the foreclosure process. Trustee Sales represent a great way for investors to purchase properties well below fair market value and even below what similar properties are selling for as REOs.
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With a sound knowledge of foreclosed homes, you can enter the real estate market with a deal you will remember for the rest of your life! The reason foreclosures are causing such a buzz, is because when a particular house goes into foreclosure it usually sells for much less than the market price. Read on to learn more about foreclosures and how to find them 100% free of charge.
RISMEDIA, October 12, 2009Recently, theres been a fair bit of anecdotal discussion around the assertion that foreclosures, once a problem just for the sub-primesegment of mortgages, have been moving up-market. That is, people are suggesting that were seeing more foreclosures…
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The Obama Administration started with a lot of input on various issues, one being the issue of Home Ownership in the United States. They realize there are strains on this important aspect of American’s lives. They’ve reserved up to 75 billion dollars to financially assist American Homeowners.
Foreclosure – Your Road to Real Estate Wealth
Do you know you can get a house as cheap as a 50% discount of the actual amount? Do you know you can get comfort having your own home? Do you know you can put an end to tenancy?
Sell Your House Fast and Rent it Back
Home repossession causes families much trauma and in the UK, the repossession rates are as much as 50% higher than they were just one year ago. When you receive that notice that your home is being repossessed, it can be very scary and overwhelming, but there are ways to stop repossession and continue to live in your home. One of these ways is to sell and rent back your house.
How Do I Find 100% Free Home Foreclosure Listings?
This is a great question for many investors looking to buy properties on the foreclosed list. How do I find listings for free? Finding free listings is easier than ever online by doing a basic search. Searching online is easier, faster and brings up accurate results. The easiest way to find free foreclosure listings online is by searching for free sites. There are still a number of pay sites but free sites are becoming extremely popular with investors and fist time home buyers.
By thewealth
If you’ve missed a payment, you’re normally sent a letter documenting the missed payment and requesting immediate payment of the past-due amount. Once you’ve missed several payments, you’ll be sent a letter from the bank’s lawyer. Receiving a letter from the lawyer means you’re in trouble; you haven’t just committed an oversight the bank wants corrected but are now considered a serious “p….
