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.


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