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!

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

Attorney General and the Department of Justice cracking down on fraudulent negotiation companies!

Amen - When is the first indictment? Oh, I forgot the banking industry has great lobbyist and government backing so they won’t be targeted - This my issue with the whole crack down. If it wasn’t for the national lenders making it so difficult for people to do loan modifications and short sales, you would not have companies that provided this type of service. I agree 100% that no one should pay any upfront fees for having someone help modify their loan or do a short sale. Why? First, the success ratio for loan mods is less than 12%, so your chances are slim to none of getting approved at all. Secondly, if a company is effective at negotiating short sales, they should have the confidence to get their fees at the close of the transaction.

We the taxpayers are funding these banks through the government bailout, and I am appalled at the lack of ethics, standards and accountability that our government and politicians are making the banks follow. I deal with hundreds of distressed home owners in the Portland real estate area on a monthly basis and I deal with the lenders daily. You would be shocked at the callous and deceptive practices that they follow. I support a full crackdown of fraudulent companies, but start at the top.