The Foreclosure Mitigation Company

HAMP Participants Find Credit Scores are Dropping – Gov’t Official Says “HAMP NOT WORKING”

kennywagner — Sun, 25 Apr 2010 02:45:30 +0000

This below is from Bob Massey – Real Estate Wealth Coach that I follow. This email article he sent out is pretty enlightening. Enjoy – Stay Informed!

Kenny

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HAMP Participants Find Credit Scores are Dropping

Many homeowners who tried to do the right thing by saving their home through a loan modification under the Home Affordable Modification Program are being startled by the news that their credit score has fallen by 100 points or so as a result.

What credit counselors say causes this drop is that during the three month trial period lenders mark payments as only partially made. This drops credit because the status is lower than that of someone who continued to make payments as originally agreed upon. Credit counselors and their clients say this is unfair, and certainly creates a surprise result that HAMP applicants never expected when they signed on to the program.

Credit card and credit scoring companies believe the lowered score is fair because filing for a HAMP modification is often the first sign of a credit problem. Credit scores can be built back over time by paying debts fully and on time.

Of course, having a credit reduction of 100 points—something that can definitely hurt when applying for further credit, a job or even insurance—is not as bad as going through foreclosure which on average lowers a credit score by 150 points.

This unanticipated result of the HAMP program is likely to have a political impact for the Obama Administration. HAMP participants feel that they should have at least been warned that a lowered credit score would be the likely result of getting involved with the program, and that warning was never issued until it was too late to help many participants.

Only 170,000 Permanent Loans Under HAMP

The HAMP program issued one bit of good news: permanent loan mods were up 45% in January. The bad news is, this is just a miniscule amount of the 1.8 million homeowners who are behind in their payments in the U.S.

The total HAMP permanent loans processed during the month of January were 170,000 according to the Treasury Department. There are nearly another 92,000 awaiting the homeowner’s signature to move from trial to permanent loan.

Lenders have sent offers to 1.3 million homeowners to start the program, which is less than the government’s goal of reaching out to 3 to 4 million homeowners in potential trouble. The government has until 2012 to reach this goal.

There is still a lot of finger-pointing going on between loan processors and homeowners. Processors claim the problem is in incomplete paperwork. The federal government is patching this loophole starting June 1 by requiring all necessary paperwork to be submitted before a trial loan modification can be started.

Still, by government calculations $2.7 billion has already been saved by approximately 1 million borrowers who have received trial or permanent loan modifications, an average of $500 per borrower.

The five lenders that have completed the largest number of loan modifications—Wells Fargo, Bank of America, JP Morgan Chase, Citi Mortgage and GMAC. Wells Fargo is leading the pack.

Private Loan Modification Agencies are Outpacing HAMP

The Hope Now Alliance is the private sector loan modification alliance of mortgage servicing companies, mortgage insurers and non-profit counseling agencies who are dealing with non-HAMP qualified loans. Primarily these are vacant and investor-owned homes that no longer have a resident owner. According to Faith Schwartz, Executive Director of Hope Now Alliance, approximately 25% of single family homes are owned by Investors who do not qualify for the HAMP program.

Hope Now Alliance closed almost 100,000 proprietary loan modifications during the month of January compared to the Treasury Department’s HAMP Program which closed 50,364. Between the two programs nearly 150,000 loans were modified, but the larger portion of these were by the private program.

Another interesting fact coming out of the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors is that “99,499 homeowners received proprietary loan modifications for the month. Combined with the United States Treasury’s recently released Home Affordable Modification Program (HAMP) data that showed 50,364 HAMP modifications for January, the total number of loan modifications is almost 150,000 for the month. Most significant in the data is the fact that 74% of proprietary loan modifications done in January, or 73,000 loans, involved reductions of principal and interest payments. These non-HAMP loan modifications also are not taking money from Treasury to subsidize the deals. Private enterprise at work!

Government Official Says HAMP is Not Working

Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), admitted that far fewer homeowners will receive assistance under the HAMP program and other government efforts to ease foreclosure than originally estimated. Barofsky estimates that only 1.5 million to 2 million homeowners will be helped as opposed to the 4 million originally expected to receive foreclosure help from the government.

Barofsky does not believe offering modifications is a meaningful goal of the foreclosure program, since so few have actually been helped and many who have received modifications are redefaulting.

Herbert M. Allison, assistant Treasury secretary for financial stability said the program should be measured not just by the number of permanent modifications made, but also by the assistance given to provide Deed in Lieu of Foreclosure and Short Sale assistance.

Obviously, the enhancements to the HAMP program announced on March 26 are an indication that new strategies and incentives are needed if millions of people are going to be helped to avoid foreclosure.

Have a great evening!

Bob Massey

www.REWealthCoach.com

Follow me on Twitter: http://www.twitter.com/BobMassey

Be my friend on Facebook: http://www.facebook.com/Massey.Bob

Check out my YouTube channel: http://www.youtube.com/TheAgentMagnet

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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

Why HAFA is “NOT GOOD” for homeowners

kennywagner — Thu, 22 Apr 2010 18:05:08 +0000

This is a post from a fellow colleague, Garbriel Trujillo @ www.homesolutions.here.ws

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.”

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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.

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Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

How a Loan Modification May Affect Your Credit Score

kennywagner — Thu, 22 Apr 2010 02:29:53 +0000

Great article from the Washington Post on the credit impact of a Loan Modification if you happen to be one of the lucky few that gets approved for one that is actually modified enough to be beneficial.

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Urgent mortgage moves need not destroy credit scores

By Kenneth R. Harney

Saturday, April 17, 2010

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.

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Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

Short Sales Are Becoming More of an Option

kennywagner — Fri, 16 Apr 2010 14:56:40 +0000

Short Sales Are Becoming More of an Option

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

“Should I Short Sale My Home?”

kennywagner — Mon, 15 Feb 2010 02:39:35 +0000

If you’re not sure and just want to find out if you qualify, give me a call and I will walk you through your options.

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.

“SOME” Banks are “Getting It” – Short Sales now 35% of Liquidations

kennywagner — Mon, 15 Feb 2010 02:25:39 +0000

This is a post courtesy of Investor Funding Blog by Ted Akers. If you’re a would be Short Sale Investor that is in need of transactional funding http://www.investorfundingsite.com/, outsourcing your short sale negotiations or just timely accurate info in the short sale arena visit his site for more info.

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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.

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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

Believe it…the banks are having their way…Watch this VIDEO! Be Informed.

kennywagner — Fri, 12 Feb 2010 18:58:27 +0000

A bank failure = BIG PROFITS for the new owner and bad news for homeowners who would like to stay in their home with the hopes of a loan modification.

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

CNBC Reports – Big Banks, Short Sales, Kick Backs and Fraud

kennywagner — Tue, 19 Jan 2010 08:25:21 +0000

Click here >Big Banks Accused of Short Sale Fraud

- courtesy of Jeremy Brandt

The title says it all…

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

(Loan) “Modifications aren’t going so well. Why not?”

kennywagner — Wed, 23 Dec 2009 03:17:24 +0000

Below is an excerpt of and courtesy of:

by Rob Chrisman

http://www.mortgagenewsdaily.com/channels/pipelinepress/12212009-onewest-modifications-us-bank.aspx

Modifications aren’t going so well. Why not? Well, getting to the essence of things, from someone in the trenches, most people do not qualify income-wise on paper. Self-employed borrowers write off a lot on taxes, and many wonder if the government should help a tax cheater. Others experience the loss of spouse’s income (divorce, death, joining the circus, etc.), loss of job, overtime hours, or second job. Folks dealing with borrowers in this sector report that most borrowers are angry with their servicer because they cannot pay their mortgage, and that this “feud” prevents an open dialogue especially when there is huge amount of paperwork to be filled out. Lastly, sometimes servicers do not have rights to the loans when the MBS holders own the rights – often the servicer is just the administrator of the pools.

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The above is for informational purposes. For those that follow my blog, the reason for the recent posts/info on Loan Modifications is because I come across many folks looking to “save their home from foreclosure” with the hopes of a loan modification and I want to dispel the misinformation and false hopes that are being given to these poor homeowners. As I’ve said before, if you want to stay in your home please contact your lender directly and if they don’t have a program that you qualify for and you need to sell, feel free to give me a call or email me to discuss your situation.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

Is a Loan Modification Just Another Exotic Mortgage?

kennywagner — Sat, 05 Dec 2009 14:23:10 +0000

This is per an article in Mortgage News Daily and the latest developments from the Wall Street Journal here > WSJ

“Loan Modifications Are Just Another Exotic Mortgage”.

Isn’t this a big part of why we are in the real estate mess that we are in right now?

The bottom line is that after initially referring a client (yes just one) to an “attorney backed” loan mod firm; it not helping out my client and further investigation into the ability of loan modifications to help a homeowner long term, I have come to my own personal opinion and conclusion that

LOAN MODIFICATIONS DO NOT WORK FOR 99.9% of homeowners.

They are a temporary fix with most lasting, at most, for 5 years which is just delaying the inevitable.

If you want to stay in your home, and haven’t yet spoken directly to your lender about qualifying for a loan mod please do so but directly with your lender as it is in my opinion that if the lenders will not or can not approve you for a loan mod with the current monetary incentives that the President is offering lenders to approve loan mods, than a third party loan mod firm that charges a fee, from a law firm or a firm that is attorney backed or not, will not help you any more than what you can do on your own.

Consider this, from what I’ve last read, more than 60% of the loan modifications firms in California, including attorneys, have gone out of business because the new law California instituted states that loan mod firms, again including attorneys, can not charge an upfront fee until they have successfully modified a loan that is agreed on by the homeowner. Moreover, the hold message that some lenders have when you call into their loan modification department or home retention department, caution you of third party firms offering loan mod services as the the lenders themselves can work directly with you to see if you qualify for one of their loan modification programs.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC