The Mortgage Forgiveness Debt Relief Act of 2007 is Expiring

So what are other homeowners doing? Many homeowners that are considering a short sale or a loan modification have decided that instead of waiting for the market to come back they are opting to sell their house now and get out while the getting is good!  If you owe more than your house is worth, it will take years to break even. If you decide to sell your house BEFORE you break even, there will be debt that is settled by the lender. Pursuit of a short sale AFTER this deadline expires will be subject to additional tax liability.

"How's that Loan Mod Going?"  More Than 520,000 Trial Loan Modifications Cancelled

Over 520,000 trial loan modifications have been cancelled, including the 90,000 this month of June 2010. Only 364,000 borrowers remain in active trial modifications.

More than 40 percent of the trial loan modifications started under HAMP, Home Affordable Modification Program, were cancelled as of the end of last month, but permanent modifications totaled nearly 400,000, according to the latest Treasury report.

Of the 1,282,912 trials started, 520,814 have been cancelled, 364,077 are active, 389,198 are permanent, and the remaining 8,823 were permanent but subsequently cancelled.

The most common causes of trial cancellations included missing documentation, trial plan default, and ineligibility due to debt-to-income ratios already being below 31 percent.

Most who were cancelled were put in an alternative modification.

Bank of America now leads all servicers with 72,232 permanent modifications, followed by Chase with 54,722 and Wells Fargo with 44,628.

However, smaller loan servicers have been converting a larger share of their eligible 60+ day delinquent borrowers, thanks in part to the use of verified documentation.

Performance of Permanent Modifications

Delinquency data included in the latest report revealed that 4.1 percent of the 126,527 loan modifications made permanent in the first quarter of 2010 were already 60+ days late.

Another 1.3 percent are 90+ days late.

The numbers are 5.4 percent and 1.5 percent for modifications completed in the fourth quarter of 2009, and 10.5 percent and 4.4 percent for the third quarter of 2009, respectively.

While it's too early to really tell, the re-default numbers look lower than those tied to other modification programs.

truthaboutmortgage.com

Coming to a neigborhood near you soon "loan-modification scams"-Forensic Loan Auditing is a Scam

"Forensic loan audits are yet another phony foreclosure-relief service hawked by loan-modification consultants

Los Angeles Attorney General Edmund G. Brown Jr. warned Californians today to avoid "forensic loan audits," referring to them as the latest "phony foreclosure-relief service."

Across the country, homeowners are paying upfront fees for a review of their lender's practices, only to be provided nothing in the way of foreclosure prevention. The service essentially audits a borrower's loan file to determine if the original lender complied with state and federal mortgage lending laws. If flaws are found, homeowners are told they can use them against the bank to speed up a loan modification or gain leverage to set up some kind of deal.

Ironically enough, some of these loan auditors may have been the same loan originators that broke the rules in the first place.

"Forensic loan audits are yet another phony foreclosure-relief service hawked by loan-modification consultants trying to cash in on the desperation of homeowners facing foreclosure," Brown said in a release. "The foreclosure-relief industry continues to be long on promises, but short on results."

Brown has sought court orders to shut down more than 30 fraudulent foreclosure relief companies, resulting in criminal charges and prison sentences for dozens of consultants.

Last year, the California Department of Real Estate (DRE) investigated more than 2,000 complaints involving loan-modification scams, with nearly 350 individuals and companies receiving a Desist and Refrain Order to stop illegal activity. Upfront fees on loan modifications, which are already illegal in California, are set to be banned nationwide, according to a proposed rule by the FTC.

Never, ever pay any Money to anybody for any type of mortgage relief, loan modification, foreclosure prevention.  Please fill out the form below and we will be more than happy to work on your behalf and verify that the program you are considering is valid or not.

photo credit: dougww

In January of this year, the government was considering buying up all Fannie Mae, Freddie Mac, and the FHA's distressed properties on the market and subsequently renting them out. They would then hold the properties for five to seven years until the housing market rights itself once more and they can sell them. An analyst at Goldman Sachs estimated that this program "would boost housing prices 0.5 percent over the first year and one percent the second year. But Loren Berlin of the Huffington Post has brought up three impediments Goldman Sachs sees to this rental program's success:

• Some of the properties in question would simply remain vacant. Why? Because no one would want to rent them.
  
• If these distressed properties were in fact turned into rentals, it wouldn't cut the number of homes on the market because lenders would just replace these houses with others from their inventory.
• Almost half of Fannie Mae and Freddie Mac's properties are, matter-of-factly, unsuitable for rental.

This idea brings up a somewhat obvious question, though -- if these properties would make good rentals, why haven't they already been sold to investors? Clearly, the government still has much work ahead if they still wish to move forward with this REO-to-rental idea.

Read the complete article.

photo credit: Bea Ackles

At the beginning of February, there was some dissension among Wall Street professionals regarding the upcoming proposed bank settlement. The Securities Industry and Financial Markets Association's Asset Management Group had planned to release a statement that "urged government negotiators to protect innocent investors, amid reports that banks will get credit for lowering the balances of mortgages packaged into bonds." But spokesperson Cheryl Crispen explained that SIFMA decided to not issue the statement "because the settlement surrounds potential legal issues involving the commercial interests of many of our members. SIFMA generally does not intervene in such matters and remains focused on matters of policy and advocacy."

The press release would have made it clear that the panel represents the asset-management group's views and would've also said that "bondholders oppose any agreement that makes investors, including pensions and Main Street mutual funds, pay for banks' wrongdoing." Joshua Rosner, research firm Graham Fisher & Co analyst argues that their failure to release said statement "demonstrates, as many of us have been saying for a very long time, that SIFMA is ultimately a sell-side organization that claims to be representative of both. It's why there has been so little done to fix the underlying problems."

Investors are typically pleased by modifications that reduce losses, but they are very concerned that lenders are going to be tempted to doctor calculations in order to "expand the pool of eligible debts and avoid the costs themselves."

Read the complete article.