Can I Borrow 6 Billion Dollars Please

Home prices are at their most affordable in many years, which has opened up homeownership to many who had been locked out during the housing boom. And now, the federal government -- and many states - are launching plans to hook up buyers of repossessed properties with very attractive terms.

The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which intends to combat blight by reducing the number of foreclosed homes on the market.

The money, which has only started to flow during the past few weeks despite much of it being authorized last summer, will go to state and local housing authorities and non-profit organizations involved in providing housing for middle- and low-income families.

"The NSP was designed to help deal with all the properties in foreclosure around the nation," said Antonio Reilly, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which will administrate the program in several counties in the state. Respectively (I Guess)

The bulk of the NSP funds will come from the $3.92 billion that was approved as part of the Housing and Economic Recovery Act of 2008 passed in August.

By regulation, these funds must be spent in communities with the highest incidences of foreclosures and subprime loans. They'll go to helping households earning no more than 120% of the median income of the local area, with 25% of the money going to families earning less than half the median

So we have already identified the fact that lenders made loans available called:
SIVA, SISA, NINA. Why were those loans made? Because they didn't qualify for a loan that's why! My point is this, once again it seems like there's a lot of talk and
not enough action to stop the crisis to those that need it most. I promise you the
105% FHA Refinance product is worthless in markets where the loss is well over 50%
of the loan to value.

-Christopher Rockey

Tired of a Cold Market / Move to Seattle

I spent the first half of this week in LA and the second half in Seattle. While in Seattle I had the unique opportunity to speak to the Hispanic Chamber of Commerce on the subject of 'The Demand for market Stabilization and the importance of Short Sale vs. Foreclosure.' I am going to be honest I was really impressed with the speaker. Usually I get off track or rant on about a superfluous subject but for whatever reason in Seattle I just felt at peace. I did have one small hick-up that I need to apologize for. Often I forget the vast cultural and market differences between major market places outside of California. Yesterday at the Chamber although I fully announced that home owners should always seek a Loan Modification, I was more down on Loan Modification companies than up. One gentlemen really had to set me straight that there are in fact people of integrity and professional morals doing Loan Modifications. He is right, now if i was in California I would even say he was right! But here's the big problem:
The California Real Estate Commissioner, Jeff Davi, announced the issuance of a Consumer Alert by the California Department of Real Estate (DRE) warning consumers about loan modification scams and informing consumers of what they can do to protect themselves. If your not sure what Jeff davi looks like read my April article that's just before my camera got stolen in Las Vegas.

“With so many people struggling to stay in their homes, foreclosure rescue scams have risen dramatically,” DRE Commissioner Jeff Davi said. “The Consumer Alert will educate consumers and help homeowners avoid becoming victims to loan modification scams.”

With new state and federal programs, as well as new laws and regulations in place, more and more loans are being successfully modified to keep homeowners in their homes. Earlier this week, the California Department of Corporations released the results of its first quarter survey of mortgage servicers, which showed that there have been more modifications during the first three months of 2009 than there were at the same time last year. While it is welcome news that more Californians are remaining in their homes, it is also important for consumers to make sure they understand their options in regards to loan modifications. The Consumer Alert can be a valuable resource, especially since unscrupulous operators are looking to take advantage of vulnerable consumers.

Loan modification scams are worrisome and widespread. Last July, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October the DRE has filed over 200 Desist and Refrain Orders and Accusations involving loan modification scams and the list of offenders continues to grow. A list of the companies and persons the Department has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.

Enforcement efforts are not enough; consumer education is the key to preventing any further fraud. The Consumer Alert contains important information on how consumers can protect themselves against unscrupulous providers who collect advance fees promising financially stressed borrower’s relief, but instead, do little or nothing. The alert also provides information on where to report fraud and what resources may be available to victims of fraud to recover losses suffered at the hands of illegal or incompetent operators.

It is worth noting that not all firms who collect advance fees for loan modification services do so illegally. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with the Real Estate Law.

The Commissioner encourages all consumers to log on to DRE’s website at http://www.dre.ca.gov/mlb_adv_fees.html to check out any real estate broker wanting an up-front fee in exchange for loan modification help. Be aware, even real estate brokers with compliant advance fee agreements are prohibited from collecting advance fees for loan modification services involving a property against which a Notice of Default has been recorded.

No person is required to pay a third party for a loan modification. A consumer can simply call his or her lender or use the services of a nonprofit housing counselor. Commissioner Davi encourages consumers to visit the DRE’s website for information on loan modifications. “Log on, look ‘em up and check ‘em out” to ensure that a company wanting an advance fee is properly licensed and can legally collect an advance fee before they sign on the dotted line.

Now back to the positive note about Seattle. Not only is it absolutely beautiful, great skiing, trails, green forests (A Little Rain) but it is by area the most and highest educated population amongst any other City in the United States.

Thank you for setting me straight on Loan Modifications.

I am certainly anxious to return to Seattle!

-Christopher Rockey

Is Your Money Safe?

Below is a list of all the US banks that have closed this year, with the most recent ones first.

A total of 40 banks have failed so far in 2009, versus 25 for all of 2008.

Failed Banks 2009
Bank Location Date Closed Assets Cost to FDIC
First National Bank of Anthony Anthony, Kan. 6/19/09 $156.9 mil. $32.2 mil.
Cooperative Bank Wilmington, N.C. 6/19/09 $970 mil. $217 mil.
Southern Community Bank Fayetteville, Ga. 6/19/09 $377 mil. $114 mil.
Bank of Lincolnwood Lincolnwood, Ill. 6/5/09 $214 mil. $83 mil.
Citizens National Bank Macomb, Ill. 5/22/09 $437 mil. $106 mil.
Strategic Capital Bank Champaign, Ill. 5/22/09 $537 mil. $173 mil.
BankUnited, FSB Coral Gables, Fla. 5/21/09 $12.80 bil. $4.9 bil.
Westsound Bank Bremerton, Wash. 5/8/09 $334.6 mil. $108 mil.
America West Bank Layton, Utah 5/1/09 $299.4 mil. $119.4 mil.
Citizens Community Bank Ridgewood, N.J. 5/1/09 $45.1 mil. $18.1 mil.
Silverton Bank, N.A. Atlanta, Ga. 5/1/09 $4.1 bil. $1.3 bil.
First Bank of Idaho Ketchum, Idaho 4/24/09 $488.9 mil. $191.2 mil.
First Bank of Beverly Hills Calabasas, Calif. 4/24/09 $1.5 bil. $394 mil.
Michigan Heritage Bank Farmington Hills, Mich. 4/24/09 $184.6 mil. $71.3 mil.
American Southern Bank Kennesaw, Ga. 4/24/09 $112.3 mil. $41.9 mil.
Great Basin Bank of Nevada Elko, Nev. 4/17/09 $270.9 mil. $42 mil.
American Sterling Bank Sugar Creek, Mo. 4/17/09 $181 mil. $42 mil.
New Frontier Bank Greeley, Colo. 4/10/09 $2.0 bil. $670 mil.
Cape Fear Bank Wilmington, N.C. 4/10/09 $492 mil. $131 mil.
Omni National Bank Atlanta, Ga. 3/27/09 $956 mil. $290 mil.
TeamBank, National Association Paola, Kan. 3/20/09 $669.8 mil. $98 mil.
Colorado National Bank Colorado Springs, Colo. 3/20/09 $123.5 mil. $9 mil.
FirstCity Bank Stockbridge, Ga. 3/20/09 $297 mil. $100 mil.
Freedom Bank of Georgia Commerce, Ga. 3/6/09 $173 mil. $36.2 mil.
Security Savings Bank Henderson, Nev. 2/27/09 $238.3 mil. $59.1 mil.
Heritage Community Bank Glenwood, Ill. 2/27/09 $232.9 mil. $41.6 mil.
Silver Falls Bank Silverton, Ore. 2/20/09 $131.4 mil. $50 mil.
Pinnacle Bank of Oregon Beaverton, Ore. 2/13/09 $73 mil. $12.1 mil.
Corn Belt Bank and Trust Company Pittsfield, Ill. 2/13/09 $271.8 mil. $100 mil.
Riverside Bank of the Gulf Coast Cape Coral, Fla. 2/13/09 $539 mil. $201.5 mil.
Sherman County Bank Loup City, Neb. 2/13/09 $129.8 mil. $28.0 mil.
County Bank Merced, Calif. 2/6/09 $1.7 bil. $135 mil.
Alliance Bank Culver City, Calif. 2/6/09 $1.14 bil. $206.0 mil.
FirstBank Financial Services McDonough, Ga. 2/6/09 $337 mil. $111 mil.
Ocala National Bank Ocala, Fla. 1/30/09 $223.5 mil. $99.6 mil.
Suburban Federal Savings Bank Crofton, Md. 1/30/09 $360 mil. $126 mil.
MagnetBank Salt Lake City, Utah 1/30/09 $292.9 mil. $119.4 mil.
1st Centennial Bank Redlands, Calif. 1/23/09 $803.3 mil. $227 mil.
Bank of Clark County Vancouver, Wash. 1/16/09 $446.5 mil. $120-$145 mil.
National Bank of Commerce Berkeley, Ill. 1/16/09 $430.9 mil. $97.1 mil.


So now that I can do the research and find out who's closed, would you like to know who's staying open?

Remember this is just me talking (Writing) out loud:
Bank of America
Chase
Wells Fargo
Citibank / Citigroup
Goldman Sachs (international/National Banking and Asset management)


Beyond those, nothing shocks me. Even B of A has had major exposure issues.

-Christopher Rockey

Chase Away Customer Service

In the Short Sale and Loan Modification world there is a huge lack of responsibility. Lenders are overworked and underpaid in their Loss Mitigation department. I will give them that. But that does not give them the right to behave poorly and not be part of the solution.

The Obama administration's $75 billion program to reduce foreclosures has been beset by backlogs and delays, leading many overstretched homeowners to complain about unreturned phone calls and inaccurate information from lenders, while others say they were denied help for reasons that weren't clear.
Details of the plan were unveiled in early March. The goal is to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments.

Since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to the Treasury Department. During that time, lenders either have started or advanced foreclosure proceedings against more than 1 million homes, according to RealtyTrac. About 20% of those were foreclosed upon and repossessed. The Center for Responsible Lending says 2.4 million Americans are at risk of foreclosure in 2009, and 8.1 million could be over the next four years.

Homeowners who apply for mortgage modifications are finding that banks typically are taking 45 to 60 days to respond to inquiries, according to a report this month by NeighborWorks America, a provider of foreclosure-prevention counseling.

Some homeowners who applied for mortgage modifications five months ago still have no answer on whether they will be able to arrange smaller monthly payments, leaving them uncertain whether they'll keep their homes or lose them shortly.

"Some lenders may not be turning (homeowners) down right away because it might be politically easier to push them off and delay," said Joel Naroff at Naroff Economic Advisors. "No one will admit they're doing this."

Naroff also says banks today are dealing with even more demand for mortgages, including refinancings, than during the peak of the housing bubble in 2006, and the backlog is likely to get worse as more homeowners lose their jobs. Mortgage delinquencies have been growing in areas where unemployment has been rising fast, and even homeowners who successfully get modified mortgages could face trouble later if their incomes or home values fall.

Lenders say they're doing the best they can with a tsunami of requests, but some industry officials say delays are hampering efforts to revive the housing market.
It doesn't take an industry official or a rocket scientist to figure that out!!

"The loan-modification program is suffering. What we're doing right now isn't working as expected," says Richard A. Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby's International Realty and ERA. "The delays are horrible. Banks, unfortunately, just weren't geared up for this." I say put a sign out front that says "Now Hiring Friendly CEO's"

This month, Sen. Jack Reed, D-R.I., and 14 other senators wrote a letter to Housing and Urban Development (HUD) Secretary Shaun Donovan and called for a new strategy to get lenders to respond to homeowners faster.

"Of particular concern are homeowners who have been instructed by HUD-approved counselors to contact their (loan) servicers only to be rebuffed or, worse, never even reach their servicer," it said.

Robin and Craig Doyle of Woodland Hills, Calif., have been trying to get a loan modification through their lender, JPMorgan Chase, since February.

Robin, who does freelance writing from home, said she initially was told to send a letter describing her hardship, paycheck stubs, tax returns and other information.

She assembled a 200-page file and sent it along. A month later, she was told she had to redo the information because the file she'd sent had become outdated.

Another time, Robin says, she was told her file had been mistakenly closed altogether. On another occasion, she was told the request couldn't be processed because she hadn't included information about a homeowner association fee, even though her family doesn't belong to such an association.

"I've had to resend it four times," says Robin, 35. "It's making me sick. It's been five months. I've spent hours and hours on this and sleepless nights. It's foremost on my mind. I look at my beautiful home and wonder if I'll have it next month."

The Doyles pay $5,031 a month on a mortgage of $947,000. They have an interest-only loan at a 6.3% rate that will reset in about seven years. On interest-only loans, borrowers pay only interest for a specific period to temporarily reduce the payments. After that, they pay interest and principal.

Craig, a writer in the television and movie industry, is still finding work but not as much as before. This is the first month the family has failed to make its mortgage payment.

"I feel like Obama's plan has done absolutely nothing," says Craig, 38.

Jennifer Zuccarelli, a Chase spokeswoman, says there were miscommunications in the Doyles' case, and the bank is working to resolve the situation. It also has added about 950 loan counselors the past six months.

"We're hiring hundreds more every month," Zuccarelli says.

After USA TODAY contacted Chase for comment, the Doyles say the bank told them the next week to resubmit their application. They later were told they don't qualify for the Obama plan because their loan amount is too high.

Bonuses for mortgage collectors

Other major lenders say they are beefing up staffing to process modification requests. Some say it has taken time because details of the Obama administration's plan weren't outlined until March.

Under the plan, if the borrower's monthly payment is reduced by 6% or more but not below a 31% mortgage-debt-to-income ratio, the servicer can receive success payments of up to $1,000 for three years, provided the borrower stays current.

Once a three-month trial period is complete and loan documents are signed, the servicer is entitled to a one-time $1,000 incentive payment and the investor receives a $1,500 check.

The investor incentive is important because the program is targeted mainly at hard-to-modify loans in certain mortgage-backed securities.

Loan modifications can help borrowers by reducing mortgage principal, the interest rate or the term of the loan. The government also has set aside money to help up to 5 million families refinance into safer long-term mortgages from risky kinds of adjustable mortgages whose payments could soar to unaffordable levels.

Those who don't qualify for either refinancing help or loan modifications under the government's program are counseled on other alternatives to foreclosure, such as short sales where lenders agree to a home's sale for less than the mortgage balance.

Bank of America reports that it modified about 232,000 mortgages last year. During the first four months of this year, it has completed about 157,000 modifications — all before the Obama housing rescue plan went into effect.

To settle claims brought by attorneys general in 11 states, Bank of America last year agreed to modify loans for homeowners holding riskier loans that often balloon into larger monthly payments later. The claims involved mortgages that originated with Countrywide Financial, which Bank of America took over in 2008.

Bank of America expects to begin processing applications from homeowners who are current with their mortgage within a few weeks.

Treasury Department officials say 16 mortgage servicers — the companies that collect homeowners' monthly payments — have signed up to participate in the program. They say they are aware of servicer delays.

"Treasury continues to pursue strategies to help servicers reach more borrowers faster. Given the fragile state of housing markets, we will need to continue to do more to ensure loan modifications are occurring at scale under our program," says Meg Reilly, a Treasury spokeswoman.

Lenders say they need to take time to review each application so that the modifications are meaningful. Some economists also warn that rushing approvals could result in modifications that only delay foreclosures rather than prevent them.

'I don't know who to trust'

Some applicants who were turned down say they don't understand why.

Judy Lederman, 49, of Scarsdale, N.Y., a freelance writer after losing her full-time job in public relations a year ago, says she tried to get a modification with Chase about three months ago. She has an interest-only loan at 5.25% that resets in one year. How high it will rise depends on interest rates then.

She says Chase denied her request a few weeks ago because she has an adjustable-rate mortgage, but other borrowers with ARMs are getting modifications under the Obama plan.

"They kept me on hold and waiting for months. I bent over backwards to get them what they needed, but it was like no one was home," Lederman says. "I really don't know what else to do. I don't know who to trust."

The day after USA TODAY called Chase for comment, Lederman says the bank called her. She says the representative told her she was turned down because of missing information and that new forms to apply for a modification were being expedited to her home. "There was some miscommunication, but we have reconnected with the borrowers and are working on finding solutions for them," Zuccarelli says regarding the complaints about Chase.

If I were more secure about my job right now I would have a wish list. In fact I'm going to write another article on all the failed banks that have imploded thus far. Then at the end of that article I'm going to state who should be on that list based on their horrible pathetic behavior in Loss Mitigation.

-Christopher Rockey

The Loan Modification and Santa Claus

I was talking to my favorite person yesterday and they were telling me of all the interesting and unique opportunities clients bring to them in this market. My favorite person was a lier AKA a Lawyer. You know these guys can legally take a retainer fee for breathing. What's worse is that people are willing to pay the retainer fee because of the three little initials behind an attorneys name ESQ. So here it is, an attorney can legally and ethically say that they will get you a 'Loan Modification' because with the right paper work an attorney can increase a homeowners payments. The myth is that not all Loan Modifications are created equal. Lenders will often offer a Loan Modification that is very much in favor of that particular lender. Not necessarily in favor of the homeowner who is actually in a distressed financial situation. Remember in order to get paid on a Loan Modification
you must take money up front, there is no close of escrow or a promise to pay you later. With that said, people will say and do anything they can to get there up front fee. You want a 1% thirty year fix, no problem. How about I reduce your principal balance while I'm at it. Hey I have a better idea, give me five thousand dollars up front and I will do the following:
1% thirty year fix
cut 50% of your principal balance
do a full 'Forensic Loan Analysis' to get you a free home

I will do all this for the low low price of just five thousand dollars.

the same people that got us into the problem have yet again found a way to thrive off the people they put into this situation. My personal belief is they should all be tarred and feathered publicly!

Loan Modification although becoming more popular was basically invented by the same retail genius who invented the word 'Santa Claus' it's just not real. The most common loan modification is a five year band aid, no cut of principal balance and a big problem in five years from now!!

-Christopher Rockey

Let's Stop the Rumors Here

No California Foreclosure Moratorium But You Can Save Your Home With Loan Modification Programs in Los Angeles and Throughout California

http://www.foxbusiness.com/story/california-foreclosure-moratorium-save-home-loan-modification-programs-los/

LOS ANGELES, June 17, 2009 /PRNewswire via COMTEX/ ----The new "foreclosure moratorium laws" do not guarantee homeowners a loan modification and will do little to stop a trustee sale. Governor Schwarzenegger's signature on the recent California Foreclosure Prevention Act, similar to the Obama Making Homes Affordable Plan, is unlikely to stop or delay most foreclosures. The bill is a step in the right direction by adding 90 days to the 3 month time frame between a notice of default and a notice of trustee sale, but leaves loopholes that allow lenders to be excluded upon application to the state or by implementing a loan modification program. The law only applies to certain loans for owner occupied properties and does not require lenders to stop a trustee sale that has already been scheduled. In addition, the lenders are not required to give borrowers a modification under these laws, but they do need to implement loan modification programs to avoid delay.

"Do not trust your mortgage company's nice customer service person telling you that you are covered by the foreclosure moratorium. You are dealing with a huge organization with thousands of foreclosure calls per day. I have clients who were told by their lender that they were postponing their sale and then sold the home anyway. Once the trustee sells your house, it is extremely difficult to get it back, even in court," said loan modification attorney Chris Barsness, Esq. "In order to assure you protect and save your home, don't assume you are covered by the moratorium. The good news is that many lenders are successfully implementing their new loan modification programs, so there really is hope for homeowners, but you must act."

Read more articles: http://barsnesscohen.blogspot.com

About the Law Office of Barsness & Cohen

The Law Office of Barsness & Cohen is a licensed California law firm where a loan modification lawyer provides legal advice and solutions for clients facing foreclosure or real estate issues. They assist clients in obtaining the best legal option for foreclosure relief, including mortgage modification, short sale, bankruptcy, and other foreclosure alternatives. They are a Debt Relief Agency as defined by Federal Law. They help people file for relief under the Bankruptcy Code. Advertisement for legal services. Although I have not met nor do I endorse Barness and Cohen, I certainly will say their heart seems to be in the right place.

-Christopher Rockey

FHA , VA, Convetional Short Sale Equations

In working Short Sales, there are some numbers and calculations that are especially critical and knowing how to run these calculations will ultimately save you many headaches in the long-run. For instance, the initial list price for the Listing Agreement that is submitted to the bank, the initial list price for MLS, the net amount that banks typically require in a Short Sale given the type of loan, the bottom-line offer that will be necessary to cover the bank's required net, as well as all broker commissions and Seller closing costs. In addition, you need to know how the numbers are affected if there are multiple mortgages on the property. All of these numbers are critical for you to facilitate the transaction effectively, gain credibility with the bank, and best represent your client.

Determine the Lender's Discount Threshold

Banks have a threshold at which they will accept or reject on offer in a Short Sale. And knowing these approximate discount thresholds is imperative in determining your list price for MLS, so that you are able to generate an offer that will meet the bank's requirements, as well as cover all the Seller closing costs and protect your commission. When we refer to the banks "discount threshold", we are referring to the net amount that the bank requires in the transaction after all approved closing costs and commissions have been paid in the transaction. As a reminder, when it comes time to go active on the market in MLS, you need to adjust the price in the Listing Agreement and have your client initial off on this price change.

Calculating the initial list price for MLS is a critical part of setting up the Short Sale. We all know that when considering market comparables for a specific area, if the price per square foot of your client's property is equal to or higher than any other property in the neighborhood, your chances of getting an offer quickly are pretty slim and the whole goal in a Short Sale is generating an offer quickly so that the house doesn't go to foreclosure. In many states, the foreclosure process is a very aggressive one, so knowing how to calculate your initial list price for MLS is imperative. To do this, you must know what kind of loan you are shorting and have a good idea as to what the lender's discount thresholds are for each type of loan.

Currently...

FHA loans are insured at 82% of the current market appraised value

VA loans are guaranteed at 88-91% of the current market appraised value

Currently, Conventional and Home Equity lenders expect net proceeds of no less than 85-92% of the current market appraised value.

Note: These thresholds represent a percentage of current market value, not the loan balance. Currently, the Conventional threshold is 85-92% of current market value. This threshold fluctuates with the market and is lender-specific. We have been working Short Sales for almost 5 years and FHA and VA thresholds have not changed during this time. Know that changes in market conditions, bank policy and/or the passing of legislation can effect these thresholds. If the market takes a turn for the worse and property inventory increases for lenders, you will most likely find that Conventional thresholds will decrease. As usual with any of the governmental
standardization processes I'm not holding my breath.

-Christopher Rockey

Is My Math Right Here?

Consumer and commercial bankruptcy filings are on pace to reach a stunning 1.5 million this year, according to a report from Automated Access to Court Electronic Records. Maybe it's just me but isn't that about 5,000 filings per day?
While well below the record 2 million filings in 2005, the number of filings is up sharply from last year's 1.1 million, says Robert Lawless, professor of law at the University of Illinois.

Bankruptcy filings took a dramatic nose dive after a 2005 bankruptcy reform measure was signed into law to curb bankruptcy abuse and make it harder to erase debts.

But filings are surging back in part because of rising job losses. The unemployment rate could hit 10% this year. And tighter credit, dwindling 401(k) accounts, smaller paychecks and less savings have left unemployed workers and those who are working but struggling with fewer financial resources to keep creditors at bay.

Over the past decades, consumers who were hurting financially could rely on credit cards to help them tread water. "The fact that consumer credit has tightened and shrunk explains why bankruptcy filings have now gone up so dramatically,"

Which we all know that a happy BK attorney is one that continue to collect more fees.

-Christopher Rockey

You Have Three Options to Avoid Foreclosure

A 'Foreclosure Start' is when the process of foreclosure action begins with the lender's first step of legal action. In judicial states it becomes recorded as 'Lis Pendens' in non judicial you will hear about a 'Notice of Default' being recorded against the property. Most lenders will always be ever so kind and write a 'Letter of Intent' on or around the sixtieth day of non payment.

According to the D.C.-based nonprofit homeownership research and advocacy group the Center for Responsible Lending (CRL), a dismal milestone was reached over the weekend – the organization says one million new foreclosures have been filed so far in 2009.

CRL’s news comes on the heels of last week’s first quarter 2009 National Delinquency Survey by the Mortgage Bankers Association, showing that 12 percent of all mortgages are now delinquent – the highest level since the industry trade group began compiling delinquency numbers 37 years ago.

Michael Calhoun, president of CRL, called the rapid escalation in foreclosures alarming. “It’s easy to think, ‘Well, that’s tough luck for the families that lose their homes.’,” Calhoun said, but he cautioned, “The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today’s crisis, and foreclosures will keep the crisis going if this epidemic continues.”

The Center for Responsible Lending projects 2.4 million foreclosure starts in 2009. The organization warns that these foreclosures will reduce the property values of some 70 million nearby homes by a total of $502 billion – about $7,200 per family. Through 2012, CRL said, these numbers will rise to at least 9 million foreclosures that will cost 92 million neighboring families $1.9 trillion in lost home value.

The center points out that the industry’s track record proves loan modifications that fail to lower a homeowner’s monthly payments are not likely to succeed. The Obama administration’s foreclosure relief plan, however, includes stronger incentives for servicers to pursue more sustainable loan repairs. And CRL says these new guidelines encourage earlier intervention and loan modifications more likely to reduce monthly payments — tools designed to stabilize the housing market and keep people in their homes.

CRL points out though, that while the industry waits for the next wave of mortgage modification programs to be put into place, a new foreclosure starts every 13 seconds – tallying nearly 6,500 each day. The organization has sent out an urgent call to lenders and loan servicers, “to work with homeowners in good faith to dramatically increase loan modifications that actually stop foreclosures and keep people in their homes”.

Option number one is a 'Loan Modification'
Option number two is a 'Short Refinance'
option number three is a 'Short Sale'

beyond those you can have the option of a 'Deed in lieu' or 'Foreclosure' itself
which we obviously want to do anything to avoid. You can make argument for forbearance agreement but that really fits under the 'Loan Modification' option. The
first three options all avoid the 'F' word!!

-Christopher Rockey

Not all Treasury Secretary's are Created Equal

Dear Mr. Geithner,

With all the money you saved by not paying your taxes you may not have to do a
Short Sale. You might just be able to write a check for the decrease in value
on your home.

Truth be told I am a strong advocate of anyone that even claims to want to find stabilization and standardization in our market place.

Treasury Secretary Tim Geithner is struggling to unload his million-dollar manse located in a posh New York City suburb. And like so many other Americans, he'll probably lose money on it when he does.

Geithner and his wife Carole put their 5-bedroom Tudor-style home in Larchmont, New York on the market for $1.635 million in February, just days after he was tapped by the Obama administration to help lead the nation out of the worst economic crisis in a century.

The Geithners paid a premium for the house when they bought it in 2004, plunking down $1.601 million after a bidding war. The "exquisitely renovated" home was originally built in 1931, according to a listing for the 0.2 acre property.

Although I would find it comedic if he did go short and couldn't get 'Full Settlement Language' against any further recourse from Ken Lewis down at Bank of America.

-Christopher Rockey

GM / GMAC That is the Question

GMAC Financial Services said Monday the finance company doesn't intend to seek protection under the U.S. Bankruptcy Code and continues to meet all its obligations.
The Chapter 11 courts must be heartbroken.

General Motors Corp. (GM), which filed for bankruptcy Monday morning, owns 49% of cash-strapped GMAC. The lender got a $5 billion capital infusion under the U.S. Treasury Department's Troubled Asset Relief Program as it became a bank holding company several months ago. I thought TARP stood for something else? See my previous article.

As a creditor of GM, GMAC said it is taking the "appropriate steps" to protect its interests during the auto maker's restructuring. GM has submitted a motion to the bankruptcy court that would allow its direct business with GMAC to continue during the bankruptcy case.

GM's prepackaged plan leaves the federal government in control of a downsized auto maker, faced with the weakest market conditions in a generation.

Last month, GMAC said its first-quarter loss widened as credit woes continued to mount and weak economic conditions hurt results. Still, the company said it was seeing some improvement in mortgage origination, as the beleaguered Residential Capital LLC unit posted a narrower loss but continued to struggle with high credit costs.

So let's talk about something nice rather than the market shall we.

-Christopher Rockey