Beware Those Loan Modifications! They are Trap Doors for “lenders” benefit not yours!!!

The “lenders’ are holding nothing but worthless or at best questionable paper. As soon as you sign a modification you are validating a debt that you most likely don’t have anymore or at worst have substantial offsets against and you are validating a security instrument (mortgage) that was destroyed in the securitization process. Check with your local licensed counsel — but my advice is Don’t Sign Any Modification unless you are getting the terms — all teht erms —- you want. And even then EVERY modification must be accommpanied by some method to protect the homeowner from later claims on a break in the chain of title caused by securitization. So you either need new title insurance, a quiet title action, or both.


This week’s Real Estate stories

By MarketWatch
Last update: 10:08 a.m. EST Dec. 26, 2008
Hope Now, an alliance of mortgage servicers, counselors and investors, said this week that the mortgage industry completed nearly 950,000 mortgage modifications in 2008.
But there are questions lingering about just how effective those modifications have been: A separate report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision found that more than half of the mortgages modified in the first quarter were at least 30 days delinquent after six months.
“The underlying cause of both the worsening economy and the growing number of re-defaults is that loan servicers have thus far failed to modify loans often enough or, when they do, to use the type of sustainable loan modifications most likely to succeed,” said Michael Calhoun, president of the Center for Responsible Lending, in a news release.
“Sustainable” modifications can be made by lowering the interest rate, lowering the principal balance, extending the term of the loan or some combination of the three, he said.
“Of no help in this situation is a modification that increases monthly payments to bring a family in arrears up to date; such a solution is appropriate only for families who can afford their loan but have fallen behind because of a one-time setback such as a divorce or temporary job loss or sickness,” he said.
Recent research by Valparaiso University School of Law professor Alan White suggested that “half the modifications on the types of loans at the root of this crisis don’t lower monthly payments,” Calhoun said.
Read more real estate news in this week’s pages, including the latest data on new- and existing-home sales. Plus, take a look this week’s average mortgage rates and find out why more people tried to refinance last week.
Considering the ailing economy, there’s no doubt the foreclosure problem will continue into 2009. Hopefully, foreclosure prevention efforts ahead will be even more effective in helping people stay in their homes.
Amy Hoak, Real Estate writer
Modified mortgages re-defaulting at high rates: regulators
More than half of mortgages modified in the first quarter were at least 30 days delinquent after half a year, and it’s necessary to figure out why so many modifications are not having the effect of preventing re-defaults, regulators said Monday.
See full story.
Little-known sale-leaseback of builder models is good way to buy
We currently rent in the San Fernando Valley. We read with interest your recent article entitled, “Buy a model now, live in it later.” What a great idea! The benefits you discussed were clear. What would be some of the disadvantages? Did you find any?
See Realty Q&A.
U.S. Nov. home resales fall 8.6%; home-price drop a record
Resales of U.S. single-family homes and condos fell 8.6% in November to a seasonally adjusted annual rate of 4.49 million, the National Association of Realtors reported Tuesday, even as home prices fell at the fastest annual pace on record.
See Economic Report.
New-home sales drop to 407,000 in November, off 2.9%
Sales of new homes in the U.S. declined to their lowest level in more than 17 years last month, falling 2.9% to a seasonally adjusted annual rate of 407,000, the Commerce Department estimated Tuesday. The sales pace for November was the lowest since the 401,000 rate in January 1991. Sales are down 35.3% compared with November 2007.
See Economic Report.
Mortgage applications mushroom on lower rates
With mortgage rates approaching record lows, the volume of applications filed for mortgages jumped a seasonally adjusted 48% last week compared with the previous week, according to the Mortgage Bankers Association’s weekly survey.
See full story.
Benchmark 30-year mortgage at lowest level on record
Fixed-rate mortgage rates fell again this week, with the 30-year fixed-rate mortgage setting another record low, at least since Freddie Mac began doing its weekly survey in the early 1970s.
See Mortgages. End of Story

One Response

  1. What type of disclosures are needed for a loan modification?

    Judy Scott

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