The investigative reader of this blog will notice I’ve been writing it for almost two years. The motivation of this post comes from another article I found that gives an in-depth explanation of regulations that hinder the award of permanent mortgage modifications to distressed homeowners.
Just about every fact in this article is news to me. I’ve never seen any of these reasons for the one percent of completed mortgage modifications under the Home Affordable Mortgage Plan (HAMP). Those same investigative readers will find the linked article very interesting, as did I.
The distressed homeowner probably will not. The short story is that the only positive solution to getting a beneficial mortgage modification is to get the REST Report. This software uses HAMP-specified calculations to define a beneficial mortgage modification; thereby holding the treacherous mortgage servicers to follow the law and not abuse distressed homeowners for their own gain.
Last year more than two million Americans lost their homes to foreclosure. This year that number is expected to be even higher. Foreclosure takes a huge toll on homeowners and their families, and sends financial shock waves throughout the economy.
Since the start of the recession in 2007, more than five million homes have been taken back by lenders. The Center for Responsible Lending estimates that as many as 13 million more homes could fall into foreclosure over the next five years.
Mortgage modification is a tool for the under-employed, the ‘other’ 10 percent of the nation’s homeowners who have sufferd severe loss of income. It is not a tool for the un-employed. A short-sale is the best solution for the un-employed. The REST Report assures a short sale opportunity for them. Foreclosure is forbidden by law.
Since HAMP began in March of 2009, more than three million homeowners have become eligible for assistance. (This ‘eligibility is determined by distressed homeowners who actually dared to open just the right letter out of the large number of other collection letters sent by their lender. The actual number of eligible distressed homeowners is assurdly much higher.) In turn, mortgage servicers have reached out to these borrowers, initiating the modification process. Roughly 760,000 homeowners have received loan modifications on a trial basis. (There is no excuse for a trial modification. The lender uses this trial modification as an excuse to lose submitted supporting documents and to confuse the distressed applicant in the process.) That’s why just 31,000 modifications have been made permanent. That’s a one percent success rate.
Under current law, if a bank modifies a mortgage it must record the write-down as an expense on its books. The bank, though, didn’t lose any money—it’s still scheduled to receive the totality of the loan principal, just less interest. This (and other) rule(s) makes banks reluctant to modify. They don’t want to take the “loss,” which can get very big for larger mortgages with long modified periods. So there’s a huge financial disincentive to offer modification. Mortgage servicers only benefit from foreclosure; not modification or short sale.
Here the author repeats the often-cited observation that the mortgage servicer makes more money on a foreclosure than a mortgage modification. This comes as an unbelievable statement to the un-initiated. But I see it validated several times every month. Your servicer is not on your side. They’re on THEIR side.
Another obstacle comes from auditors and regulators, who are imposing an ever-increasing load of paperwork on customers and banks looking to modify. In many cases, there are more forms needed to modify a loan than to get a mortgage in the first place. (This is the biggest surprise in the article to me. But ultimately it doesn’t matter. The solution is to file a legal, binding application.)
Lastly, the author refers to ‘strategic defaulters’ who aren’t suffering a severe loss of income but have stopped paying their mortgage payments in hopes of obtaining a mortgage modification. I’ve never read this definition anywhere else. ‘Strategic defaulters’ are described as homeowners who are so far ‘underwater’ in the property value that they assuredly will never recover their investment. They are only guilty of good sense.
While regulations may not be helping the HAMP mortgage modification process, it is no excuse. There is a preponderance of evidence that lenders avoid beneficial and affordable mortgage modifications just as the distressed homeowner dreads opening any mail from their lender after a default. A one percent final rate is inexcusable.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. The REST Report is best classified as loan modification software, or mortgage modification software. It’s claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using the same software. It is best used as a do it yourself loan modification or do it yourself mortgage modification. loan modification and short sale are beneficial foreclosure alternatives that benefit both homeowner and mortgage investor and make the mortgage servicer do the loan modification process in good faith. They must comply with the mortgage relief act in the mortgage loss mitigation process. I have offered loan modification services for three years. Our loan modification success is 4000 successes out of 4000 submissions. I’ll be happy to send a loan modification example in the form of a sample REST Report. I also have a proven loan modification hardship letter developed over three years of practice.
This YouTube video says it all. Go here: How to Get A Beneficial Loan Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.
Read it here
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A New Take on explaining the dismal failure of the Home Affordable Mortgage Plan – http://www.mortgage-mod-monster.com/?p=441
A New Take on explaining the dismal failure of the Home Affordable Mortgage Plan – http://t.co/YsHvYnA3