Bank Of America Says Quadrupled “permanent” HAMP Mortgage Modifications.

Of course, it is easier to get big percentage gains when you start with small numbers.

3,200 permanent HAMP mortgage modifications was the starting number here, as of the end of 2009.

No word on how many of these lowered the principal balance, or if the bank just agreed to rewrite how the homeowner was going to pay them back.

“Permanent” HAMP mortgage modifications can change after five years.

As Bank of America bought Countrywide, the #1 offender, I am not sure how many millions of mortgages they hold, or how many tens of thousands of foreclosures they have started.

Some experts are predicting foreclosures to double in 2010.

Estimates of the “shadow inventory”, foreclosed homes banks have taken back, but not yet put up for sale, range from 1.7 to 7 million.

Standard & Poors estimates, conservatively, it says, that it will take 33 months at current rates to get rid of all the shadow inventory.

Which means, more downward pressure on home prices.

HAMP Mortgage Modifications Quadrupled, Says Bank Of America

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This plan (40 pages long) assists the mortgage companies in getting you out of your house, by short sale, or deed in lieu of foreclosure, which is signing a deed to give your house to the mortgage company, instead of making them go through the foreclosure process, which takes time and money.

There will be more foreclosures on houses like the Detroit Ice House in the picture.

Same old same old on this site, more foreclosures, more homes for sale, further depressing home prices.

First HAMP, Now HAFA!

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but, maybe false:

>From the FDIC: FDIC Provides Additional Information on its Loss Share Agreement With OneWest Bank
FDIC Director of Public Affairs Andrew Gray said, “It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP).

The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.

This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It’s too bad that the creators of this video opted to premise it on falsehoods.”
Supplemental Facts about the Sale of Indymac F.S.B. to OneWest Bank

Your Tax Dollars At Work

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Well, the FTC has proposed a rule that third parties could not collect anything from you until they “obtain a documented offer from a lender.”

A rule designed to derail foreclosure scam outfits.

Foreclosure Scam Prevention Rule Proposed

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I believe, if you can afford the payments, you keep your obligation.  You signed a contract to pay the money back.

I do not think anyone whose home value went up went back to the mortgage company five years later and gave them more money.

Most of the homes in Michigan with a mortgage are worth less than what is owed on them.

Hey, I am no fan of the banks, as readers of this blog are well aware.

It is tough, when the house next door is for sale for half of what you paid for your house.

If you bought in 2005-2007, at the peak, chances are, your home value is down big time.

By all means, ask the mortgage company for a break; you have nothing to lose.

But, realize they have hundreds of thousands of homeowners in default, who cannot afford payments that went up, or payments that stayed the same, but their income went down.

Those people are going to get their attention, such as it is, first.

As always, keep track of your finances, have an up to date budget of income and living expenses.

Things may change in the future, if you have two, or more, mortgages,  you may be able to file a Chapter 13 bankruptcy and strip off that second mortgage.

Should I Stop Paying My Mortgage?

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If the mortgage company bids the amount you owe at the foreclosure auction, you owe them nothing, no matter what they may get for selling the house later.

However, if the mortgage company bids less than what you owe, and it is a reasonable market price, you can be sued for the difference between what they bid and what you owe, also called the deficiency.

If the first mortgage holder forecloses in Michigan, and gets the house back, the second mortgage company gets nothing.

Any second mortgage company has to pay off the first mortgage to get ahead of them in line for rights to the house.

Theoretically, a foreclosure auction could bring more than the balance owed on the first mortgage, which would go to the second mortgage holder.

But that does not happen any more in Michigan.

The second mortgage company can sue for whatever amount of money is owed.

In judicial foreclosure, the mortgage company sues in court to get the house back.

Of course, any suit for money by a mortgage company can be stopped by filing bankruptcy.

What if you have two mortgages, and do a short sale?

Well, as a lawyer, what can I say?   It depends.

The second mortgage company has to sign off for title to the real estate for you to transfer, that is, to sell your house.

But signing off their lien on the house does not mean you do not owe them any money, it just means they do not have your house as security for the loan any more.  You still owe on the note, and they may forgive the loan, or not.

Same with the first mortgage.  They can sign off their lien on the house so the short sale takes place, but that does not automatically mean that you do not owe them any more money.

In some states, once bank forecloses and gets your house back, you do not owe them any money.

But not everywhere.

Check with an attorney in your state.

In Michigan, we have foreclosure by publication, an auction process, or through a court.

If the mortgage company bids the amount you owe at the foreclosure auction, you owe them nothing.

However, if they bid less, and it is a reasonable market price, you can be sued for the deficiency, that is, the difference between what they bid and what you owe.

Florida is another state that allows mortgage companies to sue after foreclosing.

If the first mortgage holder forecloses in Michigan, and gets the house back, the second mortgage company gets nothing.

The second mortgage company can sue for whatever amount of money is owed.

In judicial foreclosure, the mortgage company sues in court to get the house back.

And, the mortgage company can get

Of course, any suit for money by a mortgage company can be stopped by filing bankruptcy.

What if you have two mortgages, and do a short sale?

Well, as a lawyer, what can I say?   It depends.

The second mortgage company has to sign off for title to the real estate to transfer, that is, for you to sell your house.

But signing off their lien on the house does not mean you do not owe them any money, it just means they do not have your house as security for the loan any more.  You still owe on the note, and they may forgive the loan, or not.

Same with the first mortgage.  They can sign off their lien on the house so the short sale takes place, but that does not automatically mean that you do not owe them any more money.

Will I Still Owe Money To The Bank After Foreclosure?

Will I Still Owe Money To The Bank After Foreclosure?

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From page 1:

A significant program change is a requirement for full verification of borrower eligibility prior to offering a trial period plan. Effective for all HAMP trial period plans with effective dates on or after June 1, 2010, a servicer may only offer a borrower a trial period plan based on verified income documentation in accordance with this Supplemental Directive.

This Supplemental Directive also provides guidance to assist servicers in making HAMP eligibility determinations for borrowers currently in active trial period plans, including those borrowers subject to the temporary review period required by Supplemental Directive 09-10.

This Supplemental Directive provides guidance to servicers of first mortgage loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non-GSE Mortgages). Servicers of first mortgage loans that are owned or guaranteed by Fannie Mae or Freddie Mac should refer to the related HAMP guidelines issued by the applicable GSE.

***

Effective for all trial period plans with effective dates on or after June 1, 2010, a servicer may evaluate a borrower for HAMP only after the servicer receives the following documents, subsequently referred to as the “Initial Package”. The Initial Package includes:

Request for Modification and Affidavit (RMA) Form,

IRS Form 4506-T or 4506T-EZ, and

Evidence of Income

(The RMA and IRS forms are available at:  http://www.makinghomeaffordable.gov/requestmod.shtml)

Other changes announced in SD 10-01:

At page 4:

Continued Eligibility for HAMP

A borrower who has been evaluated for HAMP but does not meet the minimum eligibility criteria described in the “HAMP Eligibility” section of Supplemental Directive 09-01 or who meets the minimum eligibility criteria but is not qualified for HAMP by virtue of a negative NPV result, excessive forbearance or other financial reason, may request reconsideration for HAMP at a future time if they experience a change in circumstance.

At page 8:

Definition of “current” under trial plan is defined as the borrower having made each required trial period payment by the last day of the month in which it is due.

H.A.M.P. Program Changes Announced

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California is no the only state in a recession, in which lawyers, among others, are resorting to unethical scams to make money.

Watch out!

People guaranteeing results are lying!!

You can get free help from non-profit housing counselors, do not pay one of these outfits you hear on TV and the radio.
Mortgage Modification Scam

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Sounds low to me.

2.8 million properties foreclosed in 2009.

And the trend?  Bound to get even worse.  Record high default rate now, as over 13% of homeowners are behind on their mortgage payments.

Why?  More ARMs (Adjustable Rate Mortgages) resetting this year and next, with expiration of teaser rates, payments will go up, more mortgage defaults, more foreclosures.

Not to mention the interest only mortgages, which are not sub-prime, which switch over to an amortized payment, $47 billion in the next year, $80 billion in the next two years.

Mortgage payments will go up 15%, more if interest rates go higher.  And there is virtually no room for them to go lower.

And 61% of the modifications actually agreed to by our mortgage company friends since October 1, 2008, are in default.

Government’s solution?  Hey, if we pay the banks some of their losses, maybe they will finally start to write down principal balances.

Only 21,000 of the loans modified in the third quarter of 2009 included principal writedowns, or deferrals.

My guess, more deferrals than actual writedowns.  One reason, investors are suing when principal is written off.

What good does a deferral do for the homeowner?

My favorite quote in the linked to Business Week story;  ”Mark Zandi, the chief economist for Moody’s Economy.com, who has testified before Congress on housing issues, proposes that banks receive a federal match of $1 for every $2 in principal reductions they offer to homeowners who were victims of predatory lending practices.”

So, let’s get this straight, mortgage company breaks the law, lends money it should not, probably cheating the homeowner.

Homeowner now stuck in home worth less then is owed, with unaffordable payments.

Remedy?

Another bailout for the crooked mortgage companies.

Well, they did spend enough of their ill gotten gains to buy both political parties, as each has supported TARP and further bailouts that have insulated the mortgage and banking companies from the consequences of their own actions, at the expense of you and me, the taxpayer.

Foreclosure Crisis Deepening

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