Loan Modification

Is an adjustable rate mortgage or are upside down? Force your lender to play fair. Refer them to the rules they have to do a loan modification for you.

A way has already been here to get us out of this terrible housing collapse and frightening recession, but the home lenders aren’t willingly doing it. Why?

Washoe County’s home values continue go down. Same story for the state and nationwide. Many homebuyers bought at the top of the market in summer and fall 2005. When the housing market collapsed, their houses are now less than the mortgages on them. Realtors continue to advise that we are in a continuing Buyer’s Market, with housing for sale/for rent inventory extraordinarily large. The result is home values and rents continue to go down. More than 29% of the inventory in the Northern Nevada MLS is bank-owned. The pundits continue to predict Reno not to hit bottom until winter 2010 because buyers are convinced home values will continue to go down. The American economy is in a recession. Senator McCain blames home loan lenders.

Realtors are not interested in taking any more listings for upside down properties as they are flooded with them and can no longer afford the costs to market them.

Due to the recession, Congress, the President and the Presidential candidates are all strongly favoring a freeze of several months on foreclosures, and a freeze of several years on upward interest rate adjustments. Senator McCain said that the home lenders created the housing problem causing this recession. He believes the lenders have to solve it, NOT the American government on the backs of American taxpayers.

Bankruptcy attorneys are getting court-ordered home loan modifications as it has increasingly become against public policy and unconscionable to throw people out of their homes because they are upside down.

Homeowners are upside downs solely because of the lenders previous greedy lending practices. Many have accused the home loan lenders of pandering, Unclean Hands and being a threat to our American economic interests and security.

An immediate note modification gives homeowners time until the housing market recovers, the economy recovers, homeowners’ credit can start being repaired to its previous flawless condition, and would not add to the already bloated for sale/rent housing inventory. In 2005, HUD put forth its “FHA Loss Mitigation Program gives lenders the authority and responsibility to assist homeowners who have fallen into financial difficulties with their home mortgages. Lenders have the option of offering borrowers a number of HUD/FHA approved options for avoiding foreclosure.” On October 4, 2006, Fannie Mae issued their announcement to avoid foreclosures with loan modifications. In May 2007, Freddie Mac issued similar loan modification mitigation requirements. There is the Emergency Home Ownership and Mortgage Equity Protection Act of 2007.

The Feds, to boost the economy, have recently done several aggressive emergency fund rate cuts and have recently stated it will continue to cut interest rates. President Bush has blamed the collapse of the American economy on “too many houses were built.” Home loan lenders financed those houses built. President Bush, hundreds of politicians globally, dozens of reporters globally, and millions of people globally are loudly and correctly blaming home lenders, especially the nation’s largest home loan lender, Countrywide (just acquired by B of A). President Bush, hundreds of politicians globally, dozens of reporters globally, and millions of people globally, all have publicly come out in support of permanent home loan forgiveness and permanent home loan interest rate reductions. So why aren’t the lenders playing by the rules?!

It more than makes sense for the home lenders, and Freddie Mac and Fannie Mae, quasi-government agencies under huge and increasing pressure from Congress and the public nationally and globally to take a small hit now instead of losing the full mortgage plus foreclosure costs and adding to the already bloated for sale inventory further driving down the home values and further destroying the American economy.

There has been the following bi-partisan political support of home loan modification.

US President Bush

US Senator Obama, candidate for US President

US Senator Clinton, former candidate for US President

US Senator McCain, candidate for US President

US Senator Reid, US Senate Majority leader

US Representative Peloski, US House leader

There is another reason to add to arguments for Note Modification. That is the millions of Short Sales the lenders have ALREADY approved through their vigorous efforts. A Short Sale is when a home is sold for less than what is owed on it.

IT IS REPUGNANT HOW THESE SHORT SALES HAVE ALREADY PUT MILLIONS OF AMERICANS OUT OF THEIR HOMES IN VIOLATION OF FREDDIE MAC, FANNIE MAE,FHA AND VA REQUIRED NOTE MODIFICATIONS TO MITIGATE FORECLOSURES! Adding further insult is the home loan lenders that are continuing to report as delinquent to the credit bureaus the borrowers that the lenders had previously given written debt relief from!

1) why have lenders not followed there own REQUIRED foreclosure mitigation requirements before, and 2) why have lenders instead chosen their senseless fanaticism to foreclosure?

The reason is the lender’s loan origination fees. Greed, pure and simple. A sale generates money to the lender in the buyer’s loan(s). Moreover, these fees the lender earns are an ENORMOUS amount per loan.

A Note Modification does NOT generate loan origination fees as it is not a purchase loan nor is it a refinance.

That is why the proposal to refinance into a government backed, insured or subsidized loan is TOTALLY untenable. It is swaggering jargon that both confirms lender smallness in their thinking and their obscene greed.

A refinance or a Short Sale is more lender houses of cards and smoke and mirrors. A Short Sale or a refinance does not benefit the borrower. EVER! They only benefit the lender. Neither benefits the American taxpayers. Neither benefits the American economy. Repeat, a Short Sale and a refinance only benefit the home loan lenders.

Short Sales and these refinances are strong evidence for more Bait & Switch home loan practices. Are decent people really that easy to manipulate?

The point is that lenders have ALREADY approved millions of Short Sales. Lenders used these Short Sales to drive, deliberately, Americans out of their homes knowing they would be future homebuyers with future home loans. Lenders created the problem and created for themselves future profits. It was draconian.

A Note Modification would have AVOIDED that. Lenders are ALREADY approving a reduction in principal aka loan forgiveness in these Short Sales. Lenders can do the SAME for loan forgiveness in a Note Modification.

Then the homeowner remains in their home. There is NO foreclosure! Congress passed in July 2007 and the President signed into law a 3-year Federal income tax window for the debt foregiveness in Note Modifications. Force the lenders NOW to do your Note Modification.