Re-Negotiating Loan Activity Strengthens

The Treasury’s latest report on the administration’s Home Affordable Modification Program (HAMP) showed a 16 percent drop-off in permanent modifications completed during September, with over half of the 1.36 million trial plans started already canceled from the program, and 11 percent of borrowers re-defaulting on their new loan. The special inspector general for the Troubled Asset Relief Program (SIGTARP) issued a new report to Congress, which shines a very negative light on HAMP’s progress so far. In it, he points out that the 467,000 homeowners who’ve received permanent modifications under the program “stands in stark contrast” to the 5.5 million homes receiving foreclosure filings and more than 1.7 million homes that have been lost to foreclosure since January 2009.

Special Inspector General Neil Barofsky said in the report “Treasury…now finds itself defending a program that is failing to meet TARP’s goal of preserving homeownership. As a result, a program that began with much promise now must be counted among those that risk generating public anger and mistrust.”

Barofsky says the problems that HAMP and its companion programs are meant to address, unfortunately, remain painfully clear as the housing crisis continues. HAMP offers monetary incentives to lenders and servicers, investors, and the homeowners themselves to encourage a mortgage modification over foreclosure, but several top officials say the fiscal perks aren’t enough.

“The lenders foreclosed on borrowers because it’s in their financial interest to do it,” said Paul Willen, a senior economist and policy adviser for the Federal Reserve Bank of Boston, at a mortgage and housing finance summit hosted by the Federal Reserve and the FDIC in Virginia this week. Willen went so far as to say the administration’s flagship foreclosure-prevention program is a reflection on three years of failed policies. “We can’t prevent millions of foreclosures using the tools people are currently using,” Willen said.

To stem the still-raging foreclosure crisis in America, Willen says the government has to be prepared to spend more money. “To prevent foreclosures we must pay lenders or borrowers a lot of money or force lenders to modify loans even when they don’t want to,” Willen said. Speaking at the housing conference in Virginia, FDICChairman Shelia Bair said, “We know from experience that reducing the monthly payment through modification raises the chance that the borrower will make good on the loan. We also know that in too many instances, servicers have not made meaningful efforts to restructure loans for borrowers who have documented that they are in economic distress.”

Bair noted that the FDIC’s work on IndyMac loans provides evidence that raising the size of the payment reduction from 10 percent to 40 percent or more can cut re-default rates by as much as half. She floated the idea of advancing more sustainable mortgage modifications by offering lenders a legal “safe harbor.”

For occupied properties, Bair said as long as lenders offered a delinquent borrower a “meaningful payment reduction – say a minimum of 25 percent,” if the borrower still could not keep up with payments on the new loan, the lender would earn safe-harbor protection to move forward more easily with what she said has become a “necessary and justified” foreclosure.

360 Group helps homeowners mitigate Foreclosure by re-negotiating mortgages through a systematic Pre Qualification process. You’ll never pay up front fees and we’ll spend whatever time necessary to educate you about your options. Call us today 623-688-0805.

Foreclosure freezes explained

Why are lenders nationwide sitting on hundreds of thousands of foreclosed homes? An estimated 80,000 of these foreclosed homes are in California while another 28,000 Arizona. Some suggest it is because they are holding on to these properties until prices appreciate in order to recoup some of their losses. Others suggest that the lenders are releasing properties slowly to avoid flooding the market and creating more depreciation in prices. Still others believe that lenders just move that slowly. For example, homeowners are typically able to stay in their home for almost a year after they stop making payments. An efficient process could reduce this time period by more than 50%. Instead, Bank of America recently made headlines by announcing that they are freezing all foreclosures. Lenders in 23 other states have done the same with others likely to follow soon. This is in response to recent findings that questioned if some lenders and/or loan services were following the correct foreclosure protocol. I wrote about this previously and made reference to the fact that law makers are now pointing fingers at the lenders. But it is the law makers who gave the bailout money and power to the banks. It reminds me of 2005 when “no one” was watching the store as lenders took consumers to the mat, charging excessive fees and giving loans to anyone who had a pulse and good fico with no proof of income. Now they are a run-away freight train just trampling the struggling homeowners.

New laws required lenders to make contact with at-risk borrowers to discuss options for avoiding foreclosure at least 30 days before starting the foreclosure process. But remember; these pro-active letters telling you “we’re here to help you” is masked with a ploy to get your financial information. Once they have your information in the system as a decline, it is more difficult to modify in the future. Many of our past success stories had no success doing it themselves. It is estimated that internal reviews at most lenders can be completed within 30 days. Then the foreclosures process will be able to resume once again. So how much help is that? It is challenging at best to fully understand all that is going on within the lending industry.

One thing you can be sure of is that the banks are under no watchful eye to protect you. If you are sending ANY information to the bank in consideration of a modification or short sale, please let us help you determine if that information will actually help you or guarantee a decline. The banks paint a rosy picture until you send them all your personal financial information and they then use it to decline you. Without knowing the guidelines, why send anything? 360 Group uses a comprehensive Pre Qualification process to show you whether you have a chance at success or not. We’re here to help you at no cost and work 100% on referrals from satisfied clients.

Democrats seek probe, citing irregularities in foreclosures

A Group of Democrats lead by Nancy Pelosi seeks a federal probe, citing irregularities in processing foreclosures of thousands of homes at some U.S. mortgage firms. The news has hit the mainstream media exciting homeowners nationwide in hopes that the nonsense will stop.

Even though I’m an optimist, I have to shout this to the masses….Wake Up People! This is the same group of law makers that have “enabled” the banks to receive huge bailouts, and back end incentives that is the actual “reason” they have been rubber stamping the Foreclosures. It’s about money. What in this country isn’t? There is great heroism all around us from millions of people who do amazing things each day. But it’s not coming from the banks pharmaceutical or oil companies.

Here at 360 Group, we’ve been seeing the banks trample people for over 14 months. We see the banks foreclosing while good solid offers are submitted and in final review. We’ve seen offers for $190k rejected only to repeat the entire short sale process again for 3-5 months as they approve and accept an offer for $30,000 lower? How is this a benefit to the shareholders? It’s not because it depends who owns the Note whether they want to lose $30k or $60k on the deal. The back-end deals drive everything.