The Good & Bad on Loan Modifications

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!

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!