The FDIC covers some of the losses incurred by failed banks, so to help homeowners avoid foreclosure, they are encouraging banks to reduce mortgage payments for the unemployed struggling to pay their notes. This is basically a 3-6 month forbearance, with the balance payable over the life of the loan. The FDIC will cover the difference for the lenders, if any lenders agree to cooperate. http://money.cnn.com/2009/09/11/news/economy/forbearance_unemployment/index.htm?postversion=2009091118
The government and it's related agencies can implement 100 programs to help Americans, but if they can't deliver on these programs effectively, it's nothing but hyperbole. Let's keep these plans simple and effective. These programs need to be easy to understand for everyone, loss mitigators and homeowners alike, so that we can get loan mod approvals up from 12%. Yesterday, I met with an attorney who had no idea about a new law here in Oregon: HB 3004. Simply, if the 1st and 2nd purchase money mortgages on a home are with the same lender, the 2nd can no longer seek a deficiency judgment against the homeowner if they fail to perform. In this case, the client had US Bank holding both mortgages, and he literally skipped out of the restaurant with a big smile on his face.
Wednesday, September 16, 2009
Friday, September 11, 2009
Is the Obama Plan Working?
Maybe. Personally, we have seen a better response time from the lenders on short sales and loan modifications just recently, the approval time has decreased by about 12 days on average. Their cooperation with us has improved and that's a step in the right direction, but this is still an arduous process. Loan modifications are up 3% in the last 2 months to an average of 12% of eligible homeowner receiving approvals. That's still pretty rough, but any improvement is welcome. Here's a good example of a success story: A client just received an approved loan modification on a $1 million balance from 6.37% to 2.5% for 5 years! That's what is needed, since we all know these lenders really don't want to foreclose on these high end homes. Contact us anytime for answers to your Portland real estate questions in this unique market.
Friday, September 4, 2009
I was approved for a short sale! I am off the hook!
Not so fast. In all reality, that is where the negotiations start. Are the banks releasing you from the debt as well, or are they just releasing the lien and expecting you to pay the remaining balance? For example: We are helping a local attorney with the short sale on his home. He only had one loan and the bank verbally told him they would not seek a deficiency. I explained that the wording in the approval letter did not state that, and that he should not close until they included the appropriate verbiage in the approval letter. He decided to close the transaction. (Remember - This is an attorney). 3 weeks later he called me up explaining that his credit report showed a balance owing. Hate to say I told you so! First - Understand the laws of your state. Is it a non-deficiency state or a recourse state. That knowledge will give your negotiating strength over the bank. Second - Always have things in writing, verbal agreements do not work. Third - Make sure you are working with someone that has extensive experience in these type of transactions. In the real estate field, the new term is Certified Short Sale Specialist. This is important, because at least you have the fundamentals, but if that person has not closed at least 50 short sale transactions they are a rookie!
We have closed hundreds of short sales and would be pleased to discuss your unique situation to show how we can help out. Give us a ring at 503-594-0805 or email me at nick@oregonhomesaver.com
Written by Nick Shivers
We have closed hundreds of short sales and would be pleased to discuss your unique situation to show how we can help out. Give us a ring at 503-594-0805 or email me at nick@oregonhomesaver.com
Written by Nick Shivers
Thursday, August 13, 2009
The Good, Bad, and Ugly
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
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
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
Friday, July 31, 2009
The upside of the Portland market compared to the West
The upside of the Portland market compared to the West
Nationwide, we have finally seen a raise in median sales price in June which is very encouraging. And locally, we have reasonably good news as well. Our inventory of homes in the Portland Metro area has dropped to 8.2 months, which is the lowest level since August 2007. A comfortable inventory is around 4-5 months, which is the amount of time it would take for the current active listings to be sold. As well, according to DataQuick, foreclosed properties have only accounted for 17.2% of our total home sales in the last 12 months, whereas in the Western states, foreclosures have been HALF OR MORE of all resale activity!
Combined with the data that our median price drop in May has only been 12.7%, compared to vastly higher numbers in AZ, NV, and CA, we are in relatively good shape.
Nationwide, we have finally seen a raise in median sales price in June which is very encouraging. And locally, we have reasonably good news as well. Our inventory of homes in the Portland Metro area has dropped to 8.2 months, which is the lowest level since August 2007. A comfortable inventory is around 4-5 months, which is the amount of time it would take for the current active listings to be sold. As well, according to DataQuick, foreclosed properties have only accounted for 17.2% of our total home sales in the last 12 months, whereas in the Western states, foreclosures have been HALF OR MORE of all resale activity!
Combined with the data that our median price drop in May has only been 12.7%, compared to vastly higher numbers in AZ, NV, and CA, we are in relatively good shape.
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