WE HAVE been getting a lot of calls in regards to the new Obama Refinancing Programs and the supposedly more aggressive “Loan Modification Programs” that is geared more towards “Responsible Homeowners.” I went thru websites after websites and seems to find lesser issues about loan modification specially involving Loan Balance Reductions. I noticed a huge increase in Loan Modification Assistance from websites offering Loan Mods and all kinds of help towards Homeowners. Some very well written sites that I thought might be sort of catchy, were too good to be true.
I am sorry to say that the calls I am getting towards the new Harp 2 Obama Refinancing might not be helping that many homeowners due to the restrictions and stringent guidelines that are tied to Fannie Mae and Freddie Mac. But still suggest for you all to try and research about it and see if it fits you. These are all tailored towards a certain type of home owners. Unfortunately this type of homeowners might actually not be needing this kind of help.
For loan modification, I have been seeing more Trial Period Payments being rolled out which might be a brightening light towards the end of the tunnel. Whether this will become permanent or not has yet to be seen. I have had some Short Sale Cancellations due to Loan Modifications being approved and I have seen banks aggressively trying to hold nationwide seminars with onsite negotiators helping homeowners deal with this issue.
But before you begin fluffing up your recession-depleted net worth statement, be aware that you will have to show much more than being upside down before your bank waives all the penalties and start approving loan mods. And all of them require homeowners to document their finances in detail, including any temporary hardships and documentation that you have enough income to pay your modified payment. Plus, you don’t necessarily get to choose which loan modification solution you get from your bank; while it makes sense to ask for a principal reduction in your loan mod hardship letter, chances are good that you’ll be offered a reduced interest rate or payment, reinstatement (where a loan in default is brought current — with or without all the back payments being made) or deferred loan balance (where payments are waived on a portion of the mortgage debt for a period of time) over a principal reducing loan mod. But they will attach a balloon payment rider stating when you sell, refinance or pay off the mortgage balance; your deferred balance now is “DUE”.
Have you heard of the term “BankLords?” Banks becoming Landlords!
Across the country, big banks and other large investors are buying up tens of thousands of foreclosed rental properties. They’re not always model landlords, according to tenants and regulators. Some banks are failing to follow local and state housing codes, leaving tenants to live in squalor — without even a number to call in the most dire situations.
There is a pilot program from some major banks to try to work out a Landlord/Tenant situation, with a small number of homeowners going into foreclosure. This program will allow the homeowners being foreclosed on, to become tenants of their previously owned home. I don’t have the full details, as I imagine every property and situation varies.
Here are some of the existing problems that I foresee will be happening to each side.
Here is a sample complaint from a tenant:
Tenant doesn’t know which Bank actually is his landlord. It’s the trustee representing a pool of investor-owners. JPMorgan Chase, the loan servicer, handles maintenance and tenants. Tenant has never spoken with bank employees. He and JPMorgan Chase disagree about why repairs haven’t happened, and why rent payments stopped last year.
I think the banks will be very selective and this program will be short-lived.
“Banks don’t want to take your home and own it,” an analyst says. They’re stuck with plumbing and electrical maintenance that is well beyond their mission, he adds. “They have to hire a property manager to take care of the property.”
Banks biggest problem: In many cases it’s difficult to find a real, live human being that’s going to take responsibility for that property,
Depending on which state you are in, I feel that the banks and tenants will have a lot of problems and lawsuits will be flying everywhere. But again, banks have the biggest guns in town — do you dare fight them or do you have the money and energy to do so?
As I have mentioned before that my believe is that more aggressive Loan Modification program will come towards the tail end of a housing bust, meaning the actual help towards homeowners will come at the latest time and if you are there, still have your house and mortgage in place. You might be able to take advantage. So far, I see the market showing signs of moving forward but some areas still very gloomy. So, I suggest to always have a backup plan, manage your finances properly and save for the future.
Thanks for your support. I am entertaining assistance towards the new Obama and the regular Refinancing, the FHA purchases from first time buyers with minimal down, the Short Sale listings for homeowners that have used up all options to keep their homes and advising homeowners on how to process their loan modifications.
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Please call Ken Go of 1st Innovative Finance Group at (562)508-7048 or write to [email protected]