Under the blueprint, banks would be prohibited from starting foreclosure proceedings while a borrower was actively trying to lower the interest rate or ease other terms of the home loan, a process known as a mortgage modification.
Any borrower who successfully made three payments in a trial modification would be given a permanent modification. When a modification was denied, it would be automatically reviewed by an ombudsman or independent review panel.
The proposed changes, which will be discussed by the attorneys general when they meet in Washington early next week, would compel the banks to treat each borrower in default individually.
.................I don't see how they can force the lenders to do this but who knows anymore. It will certainly get a lot of borrowers excited about the prospect of finally getting a loan mod.
6 comments:
Loan mods need some sort of regulation. Banks outright lie to borrowers about these and their availability. They string out the process forever instead of streamlining it. Their own departments do not communicate with each other. Instead of working to a solution that benefits both parties, they want to waste time and money while they eventually foreclose anyway. If you have made your payments in a timely manner, never been late and never missed a payment, you can still expect to get never-ending "collection" calls.
Or, most borrowers, do the honorable thing and stop chasing rainbows. They borrowed to much from banks who to loaned to easily and everyone shares in the problem. Everyone seems to forget about the fact that the borrowers agreed to borrow. The banks are loosing money one way or the other yet the borrowers expect/demand preferential treatment as if someone stuck a gun to their heads and forced them to sign a promissory note and deed of trust.
It is called the stupid tax and soon or later everyone who signed a promissory note will have to pay it.
Chasing rainbows is right. It's still amazing how many people think that prices are gonna come back. They feel if they can hold on for another few years everything will be just fine. And on the other side of the fence are the new buyers that nearly all say "I got it at 50% off". Really, 50% off what? Some ridiculous pie in the sky value from 2006 that had no basis in reality.
The other thing that really amazes me about all these borrowers who are chasing loan mods is their utter lack of reality. First off the success rate of a loan mod is under 25% approval rate. Second, there are no meaningful principal reductions happening. That means the borrower wastes many many months, probably won't get an approval or if they do get an approval they are now making a "affordable" payment however the house is still crazy underwater and the likely default in the future is darn near 100%. Had these folks swallowed their foolish pride, declared BK in 2009 when the writing was on the wall, got out from underneath the bad mortgage cleanly in 2012 they would be able to purchase a new home with FHA 3.5% down at the bottom of the market and been much better off. Instead they stupidly held onto a worthless piece of wood and stucco, still owe more than it is worth, are not done yet and it is going to now be five years or more before they can purchase a home. But hey, the bank screwed them, they are the victims here and by gosh they are going to stay......
Agreed, those sticking it out are shooting themselves in the foot and when they do want or need to sell down the road will be royally screwed. Especially after the forgiven debt releif expires. These fools will be on the hook for the taxes on the loss.
Brian, take a look at this listing and let me know what the hell is going on with this place (I tried to buy it about a year ago). I'm not interested in buying it just curious as to what the hell is going on with it. They were definitely pulling some monkey biz last year with this house. MLS#: 11-511965
Feel free to email me off line with an address and I will see what is going on.
B
Post a Comment