Streamlining the Mortgage Modification and Short Sale negotiation process
More and more details of the federal government’s efforts to standardize and streamline the mortgage modification and short sale process are being released as the media digests the information. The name is “Home Affordable Foreclosure Alternatives Program” (HAFA).
Mortgage Modification: “Whaddaya mean, ‘Up-front fee?”
Distressed homeowners, scared stiff from the numerous tales of mortgage modification fraud and not knowing who to trust, hear and read advice to not pay up-front for a mortgage modification. Confusion arises however, because no one defines what ‘up-front fees’ really means.
My Home town reporter does his research
Every now and then a news reporter actually does more research than the typical. Mike Moran of our local Business Times paper spent quite a bit of time and effort interviewing me and a few others here in Grand Junction, Colorado; investigating the fact that lenders are suggesting to distressed mortgage owners that they miss a few mortgage payments in order to qualify for a mortgage modification.
My local newspaper spreads the same misinformation as the national ‘local’ press
The evidence nationwide is quite clear: Lenders and especially loan servicers are resisting mortgage modification applications as hard as they can. It is that servicers make more money on a foreclosure than a mortgage modification or short sale.
US Government mortgage modifications plan is 1% successful
Out of more than 3 million requests sent to borrowers, only 31,382 mortgage modifications have been made permanent. Active trial modifications are faring a little better at 22%.
Bark at the Moon to empower Bankruptcy judges to facilitate mortgage modifications
if and when this becomes possible, it will have much more public relations value than true results. It will definitely open the eyes of bankruptcy judges to the treachery of the nation’s lenders and banks. The nation’s bankruptcy judges, many of whom are just waiting for the opportunity to slap these lenders where it hurts, will surely rise up and scream ‘foul’ as they witness first-hand the complete lack of professionalism and personal regard for the distressed homeowners they do business with.
New Federal Short Sale guidelines duplicate Mortgage Modification guidelines
I knew that not every distressed mortgage could be modified, and that there were instances where it was more beneficial for the distressed homeowner to pursue a short sale or deed-in-lieu-of-foreclosure. The most efficient and ethical short sale is accomplished by a company that has experience in beneficial short sales AND the capital to close the minute a short sale is negotiated with the lender. (For purposes here, short sale and deed-in-lieu are synonymous.)
Bankruptcy mortgage modifications; just another boondoggle
This will not be a panacea for the Home Affordable Mortgage Program failure because bankruptcy judges are already overwhelmed with the number of bankruptcy cases.
The lenders answer to resisting mortgage modifications is the same as when I wasn’t prepared for math class: The dog ate my homework.
There is no demand for a trial modification as a qualification for a permanent mortgage modification. This was dreamed up by the lenders as a stalling strategy to avoid permanent mortgage modifications.
If you can’t get or keep a trial or permanent mortgage modification, it’s your fault.
This is a particularly onerous conclusion given the overwhelming evidence that the lenders are doing everything they can to avoid mortgage modifications across the board.
