Good news on the loan modification front! Loan modification approvals are up 69% in the 3rd quarter of 2009. Why are banks increasing the approval rate?
a) they have the Christmas spirit
b) they have so much money they are giving it away for the holidays
c) they are getting heat from the government and media
I think we all know what the answer is. There is also bad news. All approved loan modifications have had a 40% default rate. Why? Well, because a lot of the loan mods have the same or higher payment amounts than the original payment that was defaulted on! It's all about manipulating the numbers to make it look good when the government regulators start asking questions. My advice, keep up the pressure and write to your local Governor, Senator, and Representatives, and pull your money out of from the likes of B of A and Wells Fargo!
Tuesday, December 22, 2009
Tuesday, December 15, 2009
Upon further review... New short sale program lacks teeth!
I posted a couple of weeks ago about the government passing a new streamlined short sale program. I'd like to go over my thoughts on the program now that I have had some more time to evaluate it.
The key aspects of the program are:
1. The banks participating in this program have 10 days from a submitted offer to accept or deny the offer. Currently this time frame ranges from 30 days on the good side to 2 yrs if its Bank of America.
2. The banks would have no recourse after the acceptance of the short sale. Currently, if the short sale approval does not have the correct "verbiage" the bank can and will on occasion sell the deficiency to a collection agency.
This is a start and I have been preaching about reform for 3 yrs. The problem with this program however, is it does not address secondary lien holders which are in many cases the banks themselves, that usually hold up the transaction. The program allows secondary lien holders to receive a maximum of $3k. Right now secondary lien holders are asking much more than $3k. This is also a voluntary program, how realistic is it to think that the banks are going to be nice and agree to $3k when they are owed $100k and they know they can hijack the deal unless someone gets them some additional money? That will never happen. I applaud the government for trying but this program lacks the teeth that is needed when dealing with the likes of Bank Of America!
The key aspects of the program are:
1. The banks participating in this program have 10 days from a submitted offer to accept or deny the offer. Currently this time frame ranges from 30 days on the good side to 2 yrs if its Bank of America.
2. The banks would have no recourse after the acceptance of the short sale. Currently, if the short sale approval does not have the correct "verbiage" the bank can and will on occasion sell the deficiency to a collection agency.
This is a start and I have been preaching about reform for 3 yrs. The problem with this program however, is it does not address secondary lien holders which are in many cases the banks themselves, that usually hold up the transaction. The program allows secondary lien holders to receive a maximum of $3k. Right now secondary lien holders are asking much more than $3k. This is also a voluntary program, how realistic is it to think that the banks are going to be nice and agree to $3k when they are owed $100k and they know they can hijack the deal unless someone gets them some additional money? That will never happen. I applaud the government for trying but this program lacks the teeth that is needed when dealing with the likes of Bank Of America!
Thursday, December 3, 2009
New guidelines for banks for carrying out short sales
I have been preaching for 3 years now about the callous and deceptive practices of banks. In the last 2 days, we see the Government finally setting rules for banks to follow regarding loan modifications and short sales. Tuesday, I posted an article about loan modifications and today here is the article for short sales.
http://www.dsnews.com/articles/treasury-releases-guidance-for-making-home-affordable-short-sales-2009-12-01
I am hopeful that this will help quicken the response time for banks regarding short sales decisions but I can already see quite a few things regarding the guidelines that concern me. I'd like to go deeper into the possible problems in a future post but I'm still glad to see at least they seem to recognize that the problem exists. Let's hope we see some positives from the new guidelines!
http://www.dsnews.com/articles/treasury-releases-guidance-for-making-home-affordable-short-sales-2009-12-01
I am hopeful that this will help quicken the response time for banks regarding short sales decisions but I can already see quite a few things regarding the guidelines that concern me. I'd like to go deeper into the possible problems in a future post but I'm still glad to see at least they seem to recognize that the problem exists. Let's hope we see some positives from the new guidelines!
Tuesday, December 1, 2009
Stricter regulations for banks, finally!
So I got a call from a local politician asking me if my bozo bank videos were based on real stories. I told him absolutely and after about a 2 hour conversation, where he was amazed that such practices were happening even here in Portland, he thanked me and told me to keep up the good work. Honestly, it was a satisfying feeling for me to know that maybe the message is starting to get heard by the higher ups.
I came across this article yesterday and it seems the white house is going to be cracking down on banks to push forth more loan modifications with stricter regualtions. Now obviously there is no connection regarding my phone call with my local government official, but I thought the timing was pretty intriguing. Let's hope they are starting to listen to the masses and we will see if this is just political hyperbole or the start of real change.
Here is the full article: http://www.dsnews.com/articles/servicers-face-penalties-ill-repute-as-administration-rallies-for-more-modifications-2009-11-30
I came across this article yesterday and it seems the white house is going to be cracking down on banks to push forth more loan modifications with stricter regualtions. Now obviously there is no connection regarding my phone call with my local government official, but I thought the timing was pretty intriguing. Let's hope they are starting to listen to the masses and we will see if this is just political hyperbole or the start of real change.
Here is the full article: http://www.dsnews.com/articles/servicers-face-penalties-ill-repute-as-administration-rallies-for-more-modifications-2009-11-30
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