The Loan Modification Seesaw

Reblogger Fernando Herboso - Broker for Maxus Realty Group
Real Estate Broker/Owner with Maxus Realty Group - Broker 301-246-0001 Broker - Realtor

The Loan Modification attempts by many of my short sales listing clients can be summarized with two simple words. . A JOKE

The article below begins to show the slippery slope my clients unknowingly got involved with.

Its a loan modification. . not a loan mortification!

Original content by Pamela Seley, REALTORĀ® BRE #01824145

The Loan Modification Seesaw

seesaw

Remember the seesaw on the playground? It was always a surprise to me when my playmate on the other side decided suddenly to jump off without warning. That’s what it’s like for many homeowners during the loan modification “review” process.

One day they’re out and told they do not qualify for a loan modification. The next day they’re in, and told their paperwork is “under review.” “Under review”, especially if it comes on the heels of “you don’t qualify”, usually means the loan servicer is stalling before they jump off the seesaw and foreclose.

I’ve heard this same story from several of my clients and other homeowners who lost their homes to foreclosure. It’s the recurring, nightmare loan modification story of their attempts to work out a loan modification with their loan servicer, Bank of America.

Bank of America reached a settlement of $8.5 billion (that’s billion, not million) to pay investors that lost money on mortgage-backed securities on Countrywide’s bundling (and re-bundling) of risky residential first liens. Bank of America inherited a mess from Countrywide when they bought out CW in August 2007.

According to WSJ, it may have been the worst acquisition in banking history, but will this settlement help homeowners now who are in default of their mortgage loan serviced by Bank of America?

The theme of NY Times article, “Bank’s Deal Means More Will Lose Their Homes,” says what I’ve concluded these last several months. Loan servicers, especially Bank of America, do not want to modify mortgage loans. Lenders are not in the business of loan modifications. Homeowners, who are in default, will be most likely on the fast track to foreclosure.

The article also points out that part of the settlement requires Bank of America to send out many of their loans to other, smaller loan servicing companies. If default is imminent for those homeowners, they may be one of the lucky borrowers, because they may now have a fighting chance at a loan modification through their new servicer. Time will tell later this year.

I’ll keep my hopes up that loan modifications will become a real solution to our housing recovery. However, the end of the NY Times article describes from a Bank of America customer what I’ve heard over and over from several different homeowners in Temecula Valley California about their loan modification attempts with Bank of America.seesaw

Just as I learned which of my playmates would choose to jump off the seesaw without warning, my advice is to plan for the landing.

Pamela Seley, REALTOR®
Short Sale Resource | CA DRE lic # 01824145
www.temeculavalleyhome.com | Dir 951.491.4063 | Email pamelaseley@gmail.com

Serving Southwest Riverside County California | Temecula, Murrieta, Menifee, Winchester, Lake Elsinore, Canyon Lake, Corona, Wildomar,  Hemet and San Jacinto Valley

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Rainmaker
138,848
Faith LaRosse
Realtor(R)
Springer Realty Group

Fernando, this is such a sad story...these families are reaching out for a life raft and they have to wait and wait to see if they will drown or not---so sad.

July 26, 2011 07:46 AM
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Fernando Herboso - Broker for Maxus Realty Group
301-246-0001 Serving Maryland, DC and Northern VA
Maxus Realty Group - Broker 301-246-0001

Good analogy Faith. . in that case short sale agants are life savers to jump overboard

July 26, 2011 07:54 AM
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Fernando Herboso - Broker for Maxus Realty Group
301-246-0001 Serving Maryland, DC and Northern VA
Maxus Realty Group - Broker 301-246-0001

BTW Thanks for stopping by. . .

July 26, 2011 07:54 AM
Rainmaker
315,140
Dave Halpern
Louisville Short Sale Expert
Keller Williams Realty Louisville East (502) 664-7827

Masterful post by Pamela! It takes years for others to figure out what short sale Realtors have known from the very begenning.

July 26, 2011 10:44 AM
Rainmaker
656,230
Pamela Seley, REALTORĀ®
Menifee Lakes California Real Estate
REALTY EXECUTIVES OTF

Fernando, thanks for the reblog! I like your name for it, loan mortification. That fits! LOL

July 26, 2011 02:49 PM
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