The Good, Bad, and Ugly
We have written recently about loan modification, and the lenders' ineffectiveness and disinterest in getting them done. Who holds your loan greatly affects your ability to get your loan modified. Here's our ranking of the major servicers and their overall percentages of approving loan mods for eligible loans since the government program was instituted:
The Good
Aurora: 21%
Chase: 20%
GMAC: 20%
Saxon: 25%
The Bad
CitiMortgage: 15%
The UGLY
Bank of America: 4%
National City: 4%
Ocwen: 5%
SLS: 3%
Wachovia: 2%
Wells Fargo: 6%
Wilshire: 1%
Written By Nick Shivers
Thursday, August 13, 2009
Monday, August 10, 2009
My House is upside down. I am walking
Strategic Defaults
Deutsche Bank is estimating that 48% of all Americans with mortgages will owe more than their home is worth. That is 25 million people! Zillow reports that 20 million were already underwater at the end of first quarter 2009.
Who's suffering the worst?
Option-ARM Borrowers. Also known as negative amortization loans: 77% are underwater.
Subprime Borrowers with bad credit: 50% are underwater.
No-documentation loans, which did not require proof of income: 49% are underwater.
Prime Jumbo Loans for that large purchase: 26% are underwater.
Basic Conforming Loans requiring money down: 16% are underwater.
In light of these devastating reports, is it clear that not every homeowner will choose to keep their home. Expectations have always been that real estate is a great way to build wealth slowly over time, but with the recent accelerated run up and decline in home prices, people are scared. If half of homewners have no equity in their homes, many are looking for a way out of what they see as a bad investment. Voluntarily walking away from your mortgage, but not immediately from the home, is going to be a very popular choice. As we have discussed in earlier blogs, foreclosure is a time consuming process and many homeowners are staying in the home without making payments for 8+ months. Regardless of being able to pay their note, some feel that there is no promise that their house deed will be worth anything of value to them in the near future. If you don't know which way to turn in this uncertain time for real estate, our best advise is to consult with professionals like us who fight for you on the front lines everyday.
Written by Nick Shivers
Deutsche Bank is estimating that 48% of all Americans with mortgages will owe more than their home is worth. That is 25 million people! Zillow reports that 20 million were already underwater at the end of first quarter 2009.
Who's suffering the worst?
Option-ARM Borrowers. Also known as negative amortization loans: 77% are underwater.
Subprime Borrowers with bad credit: 50% are underwater.
No-documentation loans, which did not require proof of income: 49% are underwater.
Prime Jumbo Loans for that large purchase: 26% are underwater.
Basic Conforming Loans requiring money down: 16% are underwater.
In light of these devastating reports, is it clear that not every homeowner will choose to keep their home. Expectations have always been that real estate is a great way to build wealth slowly over time, but with the recent accelerated run up and decline in home prices, people are scared. If half of homewners have no equity in their homes, many are looking for a way out of what they see as a bad investment. Voluntarily walking away from your mortgage, but not immediately from the home, is going to be a very popular choice. As we have discussed in earlier blogs, foreclosure is a time consuming process and many homeowners are staying in the home without making payments for 8+ months. Regardless of being able to pay their note, some feel that there is no promise that their house deed will be worth anything of value to them in the near future. If you don't know which way to turn in this uncertain time for real estate, our best advise is to consult with professionals like us who fight for you on the front lines everyday.
Written by Nick Shivers
Thursday, August 6, 2009
Where's our $75 Billion?
Where's our $75 Billion?
Apparently not in loan modifications yet, since the numbers are lousy so far. Only 9% of homeowners who are delinquent on their mortgages have been assisted with trial loan modifications so far. 15% of borrowers have been offered modifications, which only translates to just over 400,000 homeowners. Who holds your mortgage can GREATLY influence whether or not you are getting this offer. Saxon has 25% of delinquent borrowers in modification, whereas Wells Fargo and B of A only have 5-6% in modification. Yuck. So the first four months of this program have been rough, and Washington D.C. wants to see 500,000 loan modifications by November 1st.
On a lighter note - Without proper staffing at the lenders, they simply cannot handle the deluge of requests. Here's a suggestion for the Obama Administration if they want to get serious about solving this problem: The banks have had ample time this year to take action and keep people in their homes, and they are fumbling around and not getting it done. If the government wants to create jobs, let them hire thousands of people to be loss mitigators outside of the lenders. The positive result is twofold: New jobs created and more people getting their loans modified!
We encourage you to call these loss mitigators at the lenders yourself if you need help making your payment. Our specialists can coach you and give you some good information to help you help yourself, but most companies just want to take your money and run. Don't pay someone to do it for you, they will get you similar results! Even if they don't modify your loan, the worst case scenario is that it slows down your foreclosure and keeps you in your home longer!
Written by Nick Shivers
Apparently not in loan modifications yet, since the numbers are lousy so far. Only 9% of homeowners who are delinquent on their mortgages have been assisted with trial loan modifications so far. 15% of borrowers have been offered modifications, which only translates to just over 400,000 homeowners. Who holds your mortgage can GREATLY influence whether or not you are getting this offer. Saxon has 25% of delinquent borrowers in modification, whereas Wells Fargo and B of A only have 5-6% in modification. Yuck. So the first four months of this program have been rough, and Washington D.C. wants to see 500,000 loan modifications by November 1st.
On a lighter note - Without proper staffing at the lenders, they simply cannot handle the deluge of requests. Here's a suggestion for the Obama Administration if they want to get serious about solving this problem: The banks have had ample time this year to take action and keep people in their homes, and they are fumbling around and not getting it done. If the government wants to create jobs, let them hire thousands of people to be loss mitigators outside of the lenders. The positive result is twofold: New jobs created and more people getting their loans modified!
We encourage you to call these loss mitigators at the lenders yourself if you need help making your payment. Our specialists can coach you and give you some good information to help you help yourself, but most companies just want to take your money and run. Don't pay someone to do it for you, they will get you similar results! Even if they don't modify your loan, the worst case scenario is that it slows down your foreclosure and keeps you in your home longer!
Written by Nick Shivers
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