Research and exhaust all your options.  Loan Mods are working for some folks should you want to try to first keep your home.  If you don’t qualify for one then you can short sale your home, restore your credit and buy again a home that is in line with todays true market value.

Enjoy – Stay Informed!

Kenny

————-

Only 331,000 of the 975,000 loan modifications that have been completed to date have been written under the federal government Home Affordable Modification Program (HAMP); the rest are the result of proprietary loan modifications from servicers and lenders.

What happens to borrowers when their modifications are turned down by HAMP?  In 45% of the cases the Lenders work out a proprietary modification.  Another 2.4% end up selling their homes through a Short Sale.  About 3% file for bankruptcy, thus delaying any final resolution on the home.  Another 10% end up losing the home to foreclosure.

The Treasury Department report on the program notes that there are wide discrepancies between servicers on what happens to those who request a modification.  To a large extent, it is the luck of the draw as to whether a loan modification will be successfully completed.  The loan modification process has, on the whole, slowed the progress of foreclosures.

————————————————————————————————–

Bottom line is that you should consider all your options and work with a competent professional who can help guide you so you can make an intelligent decision.  Loan mods are becoming successful for many folks who are advised & helped out correctly the first time around.

For those of you that have read my blog you know that I’m not a big proponent of Loan Modification due to it’s over promising and under delivering and in my opinion, just postponing the inevitable.  For most folks, short selling their home is probably the best thing to do so they can rebuild in the next 12 months and buy a house that is at it’s current market rate.

BUT…I’ve heard mixed stories.  It seems that HAMP can be successful (it’s currently failing 50% of it’s applicants who are on trial mods) IF…and this is a big IF…the companies that are helping these folks get into the HAMP trial modification plan work out the homeowners financials CORRECTLY to begin with…AND…IF they we’re truthful to those whose homes are 35-50% less than the loan amount, as logic would think, it would most likely be better they short sold their home even if the loan mod payment was low enough for them to afford because they probably couldn’t make up the deficiency in value in their lifetime.  Cut your losses and move on.

For more commentary about this, below is an excerpt from a newsletter I subscribe to:

“Smart Real Estate News & Commentary by Chris McLaughlin August 31, 2010″

You can subscribe directly at the following link:  http://www.smartrealestatenews.com/

Banks have long come under fire not doing enough to help troubled homeowners, particularly when the mortgage crisis started spinning out of control in 2007. Many loan servicers initially addressed the problem by tacking on the missed payments, which only increased strapped homeowners’ monthly burden.  However, banks now are doing nearly twice as many modifications under their own foreclosure prevention initiatives than under the Obama administration’s signature Home Affordable Modification Program (HAMP).

Servicers completed nearly 644,000 so-called “proprietary permanent modifications” in the first half of this year, compared to 332,000 such adjustments made under the Obama program, according to Hope Now, a consortium of mortgage servicers, investors and housing counselors.  About half of borrowers who don’t land a permanent HAMP modification are given an in-house adjustment, according to federal statistics.  About 78% of banks’ in-house modifications involved interest rate and principal reductions, Hope Now found.  Wells Fargo, for instance, said last week it has reduced more than $3.1 billion in principal on nearly 60,000 loan modifications in the past 18 months. It uses a combination of principal adjustments, interest rate reductions and term extensions to assist its borrowers.

————————————————————————————————–

Submitted by Tim Harris on August 26, 2010 – 10:32 am

Click on the following link below for the whole story.

My take folks…continuing to make a mortgage payment an a house that is so underwater and is putting your family & future family i.e. kids at risk of ever having a fruitful life than do what the banks, commercial property owners and other businesses do when their “investments – i.e. real estate” is no longer a worthy investment” – cut your losses and rebuild.  Why is it okay for them and considered smart while homeowners are being made to feel guilty as it’s their moral obligation to make their payments and to the point that they bankrupt themselves, destroy their family with no way out.  I’m not arguing what the “moral” thing to do is here.  In my opinion, this is solely a business contract that has gone south and you, the homeowner(s), need to do what’s best for you & your future.

http://timandjulieharris.com/2010/08/26/jingle-mail-strategic-short-sale-walking-away-becoming-trendy/

Thanks Tim & Julie Harris and Harris Real Estate University for staying on the cutting edge and helping agents help owners build for a better future.

Kenny Wagner

Kenny

—————–

It’s a good summary of why HAFA IS NOT GOOD for homeowners versus what it is being touted to be to Real Estate Agents and the general public.

Another colleague, Ted Akers @ www.investorfundingsite.com says:

“it designed to get the homeowner out of the property and back in the banks hands faster. The homeowner is better off not opting-in to HAFA and pursuing standard short sale processing.”

—————————————————————————————————————————————————-

On April 4, 2010 the United States federal government began implementation of the “Home Affordable Foreclosure Alternatives” (HAFA) program. This was promoted by the Obama Administration as a way to encourage short sales. In reality, it will not be effective and it’s usually worse for a homeowner who is facing a signficant hardship when compared to a traditional short sale. As one sees below, it is more beneficial for the bank than for the homeowner. A few key reasons are:

1. Homeowners who likely were not making payments due to hardship must pay 31% of their gross income to participate in the program or agree to give their property to the bank by a ”deed in lieu” of foreclosure.

2. The bank determines the sales price. Neither the homeowner nor their broker have any control or influence over pricing.

3. The bank can force a deed in lieu if the property does not sell at IT’s price in 120 days, even if the property is not in foreclosure.

4. Even if the program was good, it covers very few loans: not Fannie Mae, Freddie Mac, FHA and VA loans.

5. It only affect a first mortgage/deed of trust. The homeowner is responsible for negotiation of their own junior liens (if any) for a maximum payment of $3,000 for ALL liens.

The homeowners’ benefit is a $1,500 incentive payment IF the sale closes. This presumably helps with moving costs.

—————————————————————————————————————————————————

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

==================================================================================

Financially stressed homeowners looking to cut their mortgage payments through a loan modification, short sale or principal reduction under one of the Obama administration’s programs needn’t wreck their credit scores in the process.

In fact, according to a new study covering more than 400,000 active consumer credit files, some modification options can increase your scores rather than depress them. Other alternatives to modification — such as foreclosure and bankruptcy filings — can tank your scores and take years to rehabilitate.

The study was conducted by VantageScore Solutions, a joint venture created by the three national credit bureaus — Equifax, Experian and TransUnion. The “VantageScore,” now being used by growing numbers of mortgage lenders and banks, is designed to be an alternative to the long-dominant FICO score.

The VantageScore scale runs from 501 to 990, with low scores indicating high risk for the lender. FICO scores run from 300 to 850. According to Sarah Davies, VantageScore Solutions’ senior vice president for analytics, the two scores show roughly similar impacts of loan modifications, short sales, foreclosures and bankruptcies on consumers with similar credit histories. The 400,000 consumer files accessed in the study were scrubbed of all personal identifiers to preserve privacy.

Some of the most frequently used mortgage modification strategies turn out to have relatively minimal negative impacts on consumers’ scores, the study found.

For example, people with excellent scores at the time of a loan modification — those who had paid their mortgage and other credit accounts on time — might find their scores depressed by 30 to 40 points after a modification that involved deferral of payments for a period of months.

The same consumers could see a small net gain in their scores — about 10 to 30 points on average — if their lender modified their loan by forgiving 10 percent of the balance owed and chose not to report that forgiveness as a charge-off to the credit bureaus. If the lender reports a charge-off, however, their scores could drop by 100 points or more.

Modifications involving what lenders call “recapitalizations” — rolling delinquent payments and fees into a new balance typically carrying a more affordable interest rate — also can increase scores modestly, the study found. On the other hand, homeowners who do not pursue — or whose lenders do not grant — modifications can end up in short sales, foreclosure or bankruptcy, with major hits to their scores.

For homeowners with good credit, a short sale can knock their scores down by 130 points instantly. A foreclosure for the same homeowner is worse — a 140-point decline. A bankruptcy filing is almost certain to be a nuclear event — as much as a 365-point cratering of scores for borrowers with previously solid credit.

“If someone is on the margin and can find a way to avoid bankruptcy,” said Barrett Burns, president and chief executive of VantageScore, not only should he pursue it vigorously but he “ought to know what the consequences are.”

VantageScore’s simulations of scoring scenarios also examined how quickly homeowners could bounce back from one or more negative events connected with their mortgage. The results should be encouraging for consumers who manage to get current on their loan payments after a modification.

For example, in the case of delinquent borrowers who started with scores just above 600 and saw them drop by more than 100 points after a significant restructuring of their loan terms, scores can rebound to 700 in just nine months — provided they make on-time payments on all of their credit accounts.

Borrowers who file for bankruptcy, by contrast, can expect only minimal gains in scores plus a huge negative mark on their credit files for at least seven years.

Other noteworthy findings in the study:

– Credit scores assign disproportionate weight to mortgage payments over other accounts. For example, there was a 108-point average difference between the scores of borrowers who were current on their mortgages but delinquent on other credit accounts and homeowners who were delinquent on their mortgages but had perfect payment histories on credit cards, car loans and the like.

– Growing numbers of homeowners appear to be ignoring this overweighting, inadvertently depressing their scores disproportionately by paying credit cards and auto loans on time while becoming delinquent on their mortgages.

Davies called the shift “a sea change” with profound implications for mortgage lending and home buying. It’s not yet clear whether this is a temporary trend connected with the housing boom and bust or a longer-term shift, she said. But whichever the case, it’s the wrong strategy for borrowers who care about their credit scores.

—————————————

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

This article was posted in a national real estate publication.

RISMEDIA, January 27, 2009-The national foreclosure moratorium imposed by Fannie Mae and Freddie Mac, major banks such as Citibank and Bank of America, and a host of state governments has created a “breather” for homeowners in default. By working with loan servicers, some homeowners will be able to modify their loan terms and stay in their homes. But many won’t.

Not all borrowers will qualify for modified loans. Lenders are keenly aware of this, as well as the fact that foreclosing on a home is an expensive proposition: It can cost a bank $30,000 to $50,000 to foreclose on a home, plus carrying costs that equate to 1.0% to 1.25% of the value of each home per month. There is little enthusiasm for increasing bank-owned (REO) inventory in markets already saturated with foreclosed homes and falling prices.

As an alternative, lenders have new enthusiasm to ramp up the volume of short sales.

Short sales, as most know, are when the lender allows a distressed property to be sold at a price lower than the homeowner’s mortgage indebtedness, with the difference forgiven. This relieves the homeowner of their ownership and debt burden without marring their credit report the way a foreclosure would. It also typically allows the new purchaser to buy into the neighborhood at a substantial discount . much more in line with the property’s true, current market value. In other words, short sales facilitate efficient clearing of the market.

Historically, short sales have not been very appealing to lenders. The short sale is a complex process that requires an agreement by all the lien holders to accept the lesser amount owed by the original borrower. The paperwork and number of players involved in short-sale transactions can easily overburden a servicer who is already dealing with hundreds of thousands of loan modifications, REO dispositions, etc.

But now with over four million new loans in default in this cycle and six million more expected in early 2009 due to coming interest-rate resets, lenders such as Citibank, Bank of America and Wells Fargo are fired up for short sales.

As they see it, if just 25% of current loans in default could be sold through short sales it would stave off one million foreclosures (good for homeowners) and replace one million nonperforming borrowers with one million performing borrowers (good for lenders).

The industry’s challenge to accomplish this is two-fold: Evaluating their portfolios to determine which homes are well suited for short sales, and processing the high volume of bulk sales.

So lenders are now assessing a distressed borrower’s situation early in the loan modification process, calculating the sensibility of modifying the loan versus offering the property in a short sale or letting it likely roll into foreclosure. In cases where short sales are the best route, lenders are proactively assigning loans in bulk to be put through the short-sale process. (This phenomenon is strangely new to homeowners; in the past it was incumbent on them and their agents to initiate the short-sale process, not the other way around).

The second part of the challenge is how to process the actual sales, considering legacy technology solutions weren’t built to handle either the volume or the complexity of today’s short-sale transactions.

DepotPoint’s TrackPoint, with a new short-sale module, is up to the task. TrackPoint is an online workflow platform that operates in a SaaS environment. The short-sale module can scale an outsourcer’s or an asset manager’s operation quickly to handle massive amounts of short-sale volume, reducing costs and elapsed time to complete transactions.

Already using TrackPoint featuring the new short-sale module is MMREM, Matt Martin Real Estate Management, which has facilitated more than 10,000 short sales as the nation’s largest facilitator of short sales.

“Short sales are often complex, time-consuming transactions,” said Matt Martin, President and CEO of MMREM. “In today’s high-volume environment, managing them can be even more cumbersome than usual. REO TrackPoint featuring the new short-sale module simplifies and streamlines the process. It’s the most comprehensive, efficient national online platform we’ve seen for managing and processing default properties.”

MMREM has increased its short salle through-put by more than 300% by using TrackPoint with the short-sale module.

Tom Gordon is Executive Vice President of Business Solutions for DepotPoint, Inc., which brings greater efficiencies and cost savings to mortgage lenders, loan servicers, foreclosure attorneys and REO asset management firms that use the company’s Web-based application suite, TrackPoint, to vertically process properties through foreclosure straight into REO management.

By Tom Gordon

Believe it or not, you may just need help getting a temporary reduction in your payments to ‘catch up’.  In any case, call me to talk about the several options that you may not be aware of.

If you don’t know what else to do and you don’t call me at 1-702-204-3945, what will it cost you in damaged credit, frustration and stress?

If I am unavailable when you call, you can either leave me a message or with one of my assistants who are taking calls from 8am to 9pm Pacific time Monday through Saturday.

I know how you feel and I can help.

Kenny

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist

The Foreclosure Mitigation Company
Short Sale & Foreclosure Specialists

1-702-483-0890 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com

And Did You Know That Most Short Sale Agents Who “Do Short Sales” Have A 90%+ FAILURE Rate When Negotiating Short Sales According To The National Association Of Realtors?  That Means The Average Agent Will Only Get 1 Or 2 (At Best) Out Of Every 10 Short Sales To Work.  I Have A 90%+ Success Rate When Closing Short Sales Transactions.  See A Sample Of My Short Sale Approval Letters HERE.

If Considering Another Agent Or Negotiation Company, I Advise Asking Them For Their Most Recent Approval Letters From The Banks Showing They Can Get The Job Done… Most Can Not.

My Success Rate Is So High Because I Have Been Specifically Trained On Short Sales By THREE Of The Most Well Known Top Loss Mitigators In The Country & A Top Short Sale Attorney - (Jerami King – KK Consulting; Suzanne Erickson – American Loss Mitigation; Lee Honish – Short Sale Genius & Jeff Watson – Top Short Sale Attorney) On How To Negotiate A Settlement With Your Current Lenders So You Can Sell The Property, And Get Out From Under This Burden.

Best Of All, My Compensation Is Usually Paid By The Bank, So You Won’t Have Any Out-Of-Pocket Expense & You Keep Your Full Commission.

——————————

A Research Note by Barclays Capital, indicates that short sales have been boosted by mandatory and voluntary foreclosure prevention efforts that have prevented mortgages from entering REO status.  As federally-funded loan modifications made through the Home Affordable Modification Program (HAMP) grow and lenders are expected to hold off on foreclosure proceedings, the REO pipeline shrunk, according to BarCap researchers. The foreclosure prevention efforts have had the effect of “artificially” boosting short sales.  “The artificial constraints to foreclosure auctions have resulted in a reduction in REO stock,” BarCap said. “As a result, the net volume of REO liquidations has also dropped.

As short sales are not affected by moratoria, their rate held up and their overall share in distressed sales increased.  It has now risen more than 10 points from the lows to about 35% of overall liquidations. It remains to be seen if this increase will sustain itself once the large number of loans sitting in foreclosure are finally released into REO.”  BarCap researchers pointed to the difference in severity seen in foreclosure and short sale scenarios as one of the drivers behind servicers choosing short sales.

HOWEVER, most experts agree that there is a looming shadow inventory of REO’s yet to come and that foreclosure numbers are likely to stay high thru 2011 due to specific types of outstanding mortgages, specifically Option ARM’s which have a greater liklihood of having values underwater when they recast.  Information regarding the Barclays research was provided by Chris McLaughlin.

For low-cost Transactional Funding for Short Sale Back-to-Back closings visit Ted’s Transactional Funding website at: www.InvestorFundingSite.com Their fees are some of the lowest I’ve seen.

———————————————-

And of course, if you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

kenny@tfmcpartners.com

P: 702-204-3945

Chat with Kenny @ TFMC

Courtesy of they guys @ http://www.thinkbigworksmall.com

“The IndyMac Bank Slap In The Face” - You won’t believe the sweetheart deal that the Indymac boys were given by the FDIC.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1287086

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC