Banks Need to stop hitting
Snooze
Plenty of news coming out concerning loan modifications by banks and this probably has more to do with real estate values tanking (and the attempts to keep them from falling further) then being nice. If you want to keep real estate values up, the best way is to keep people from being foreclosed on in the first place.
So.. modify the loans to make the payments affordable. The problem is… Las Vegas real estate values have already decreased significantly and it does not address the problem of people who paid too much to begin with due to the availability of these loans driving up the demand for real estate – resulting in inflated home prices. (In other words, if these loans were not made in the first place, home values would probably not have gone where they did in the first place.)
Countywide Settles $8.7 Billion Lawsuit - Mandatory Loan Modification Program to assist 400,000 homeowners.
“Illinois Attorney General Lisa Madigan today announced a ground-breaking $8.7 billion settlement in her predatory lending lawsuit against Countrywide, the nation’s largest mortgage lender and servicer. Madigan led the national settlement with California Attorney General Jerry Brown. Nine other states joined the settlement.”
Illinois Attorney General Lisa Madigan announces Settlement with Countrywide
Bank of America purchased Countrywide earlier this year and 11 states were involved in the lawsuit. Bank of Amierica has agreed to modify loans for nearly 400,000 customers in Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington.
The mortgage aid includes revising customers’ payments so they don’t exceed 34 percent of income. Other options include reducing interest rates and adjusting principal so that borrowers don’t wind up actually losing equity under some payment plans.
Hope for Homeowners Launches
Hope for Homeowners Launches - The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD’s Federal Housing Administration (FHA). For more information on consumer facts and who is eligible, Click Here to Read More.
This is a volountary program for lenders to participate in and includes these key provisions:
- The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
- The existing first mortgage must accept the proceeds of the H4H loan as full settlement of all outstanding indebtedness.
- Existing subordinate lenders must release their outstanding mortgage liens.
You can Call 1 (800) 225-5342 for more information.
When all else fails and you need to do a Short Sale
If the above solution does not work for you and you have tried working with your lender for a loan modification due to a hardship and need to sell your Las Vegas real estate, you may have to do a short sale. Much like banks and the investment firms of Wall Street wanting somebody to come along (aka Taxpayers) to buy their non-performing assets so they can move on, you need somebody to come along and help you get out of your home. You owe more then it’s worth and you need the banks to agree to what we call a short sale to allow somebody else to buy the home at today’s market value.
So – with all of this money being supplied for all of this Hope, have the banks been helping themselves and Las Vegas Short Sellers who have found themselves in a current hardship and need out? As of right now, no.
For October, only 273 Las Vegas Short Sales closed escrow. There are currently 2,320 Las Vegas short sales in contract and 6,483 Las Vegas Homes (includes condominiums and townhomes) currently available for sale that are classified as a Las Vegas Short Sale.
There seems to be a lot of money being pumped into Hope and hopefully it helps people out for those that it applies to. However, banks need to do a little helping out of their own by streamlining the short sale process and being a little more receptive to people who have had a hardship in their lives and can’t afford any loan modification program.
In other words… let homeowners that have to sell their homes due to a harship or job transfer sell their homes before they go into foreclosure in the first place. There are plenty of people trying to do the right thing in the first place… Banks need to help them out too because it eventually ends up helping themselves.
February 19, 2009 at 6:36 pm
[...] Hope for Homeowners? Too late.. [...]
July 3, 2010 at 6:50 am
It is incredible to see just how out of touch our main stream media is.
I have been researching the Mortgage predatory lending market for some time now, gathering a whole bunch of dirt on Angelo Mozilo, David Sambol, Kurland and others at Countrywide Home Loans. I uncovered more than a little dirt on Bank of America and its CEO Kenneth Lewis. But what moved me the most was coming across this Lone Ranger like character named David Merritt.
This is a guy who got suckered into one of those Countrywide Predatory loans. He and his wife are first time home buyers who wanted to put 5 to 10 % down on their $729,000 home in Silicon Valley California – 2 miles from Yahoo headquarters, 4 from google and 5 from Apple.
With just 2 days to remove their loan contingency, and with at least two other lenders ready to sell them a relatively decent mortgage, Countrywide talked them out of going with the competition by presenting a 1 to 3 percent, FHA Good Faith Estimate and declared: “if you can find someone to beat this loan, then go with them and we’ll pay the closing costs.”
Countrywide staff were trained on how to determine how much knowledge a home buyer had, and they knew that the Merritts were suckers to be taken. Once they fired the other lenders and committed themselves to Countrywide, the Merritts found themselves locked into a 100% financing Pay Option ARM and HELOC which was destined to charged them over 2 million dollars. Countrywide had a policy of talking buyers out of putting down payments, and convincing them that they would give them a loan that was better. In fact, they would always tell home buyers that No One Could beat them and the truth was that they did beat everyone at the application stage in order to remove all the competition, but they left out that by the time the home buyer was closing escrow, most competitors would have done better.
The Merritts signed a loan that was charging twice as much as the average lender. What is more is that they signed a loan which Countrywide assigned Mortgage Electronic Registration System as a lender. As it turns out, MERS was designed to be a front company which allows: 1) Note holders to hide from public scrutiny; 2) the duplication of one loan note that could be sold off to 2 or more investors or mortgage backed security pools: 3) evasion of paying local recorder fees; 4) Overriding state legislatures recording the laws on recording liens, beneficiaries and holders in due course; 5) attacking Public Policy in regards to its goals of protecting consumers and lenders from fraud via recording laws; and last, but not least, 6) being a conduit for billions of dollars to pass right by Uncle Sam and into Cayman or Canadian banks where no federal taxes can touch it.
This is how Countrywide rose to the top. And they intentionally targeted elderly, minorities and unsophisticated first time buyers.
Now in July 2008 Bank of America bought Countrywide out for 2 billion dollars. A company with assets that exceeded 20 billion, and servicing machine that churned out billions more.
Bank of America went to all the states Attorneys Generals and asked them to bring lawsuits on behalf of their state citizens against Countrywide and to already agree to cut a sweet settlement deal with Bank of America. This was a strategy to persuade that Public that BofA was sincere about cleaning up the mess Mozilo and cronies created. But what is left out is that they are also trying to cut off home buyers ability to charge BofA with the predatory loans of Countrywide.
Behind the scenes, BofA has been supporting Countrywide since 1969. It has always been in the predatory loan business, but through other front companies. For the longest, evidence shows, Kenneth Lewis was very close allies with Mozilo and planned with him to defraud Americans out of their home equity.
It is so strange to see so many Americans enslaved to the Banking and Finance gangsters and not even know it, or if they do, just accept it.
David Merritt is literally one of the 21st Century modern epics “David versus Goliath.” And all the has is a little sling and a rock against Goliaths billion dollar war armor. Check out some of his thoughts on many issues at wordpress.com/insightbeyondsight, but the 9th Circuit Court of Appeals has before it Merritt v. Countrywide, BofA, Wells Fargo et al, Docket No 09-17678 where he has charged straight at these Greedsters with RICO and other federal violation. And in Santa Clara Superior Court Merritt v. Mozilo et al No. 109CV159993.
He is actually looking for other victims who have deeds of trust assigned to MERS and he wishes to help in anyway possible to fight these folks offensively , he prefers, but he has enough information to help defensively as well. Lawyers from around the country taps into this Big David. So circulate the word.
Mark Doyle