The Good. The Bad. And the Ugly....Or Just Bad and Ugly?
Something to think about:
Over the last two years or so, as we've seen the foreclosure crisis continuing to rock our country's already fragile economic stability, homeowners have been given ever increasing and new ways to stall and prevent foreclosure. Earlier this year, with the creation of HAMP, homeowners have felt that the government has stepped in and finally done something to help them to save their homes from foreclosure sale.
The GOOD...or is it?:
If you've been reading/watching the news recently, you may have heard that the HAMP program has reached its goal of 500,000 loan modifications one month earlier than the November 1st deadline. This is very exciting for homeowners, showing promise, a plan that works, and hope for the future.
The BAD:
In a recent article "Is Foreclosure Relief Failing?", there is another side to the story. It seems that the hype over 500,000 home loans having been modified is extremely exaggerated. In fact, 500,000 loan modifications falls seriously short of the actual number of modifications completed.
As reported in the above article, 500,000 homeowners have been provided with a three month trial period to make payments to their lender, after which a modification would be completed. Once those payments have been made as agreed, the bank should (taking those completed payments as a sign of good faith) do what they can to modify the terms of the loan to meet a lesser financial standard, while ensuring no further default occurs. Unfortunately, in many cases these trial period payments are calculated with no consideration of the homeowner's income, their financial status, or ability to repay.
The Ugly:
With just over 1700 actual modifications having been completed, we have yet to see the remaining 498,300 loan modifications the government and banking industry have been proud to state they have completed. A trial period does not a loan modification make. Many times (as I have personally experienced with my own clients) the lender takes these "trial" payments (again with no consideration of income or ability to repay) and "promises" to do a loan modification after the trial period has expired. In many cases, homeowners are declined a modification after the trial period because their financials simply do not qualify them under their lender's modification terms, nor under the guidelines of HAMP. How many of these 500,000 homeowners will actually qualify for a loan modification? If they do not qualify for a modification under HAMP guidelines, will their lenders look outside the box at doing an in-house modification? Doubtful.
Is there a Solution?
Is there a solution to this issue? Is there some common sense plan that can be put into place to make it easier to determine if a homeowner deserves/qualifies for a loan modification? Should there be as much hype about modifications if so few are actually being completed?
Educating the Masses:
Many here are experienced with Short Sales. A good and viable solution to a homeowner's foreclosure problem. Additionally, Short Sales make good sense for investors, who find themselves underwater, upside-down, and in their own financial dire straits when their renters are loosing jobs and income just as much as homeowners are. This however, is not the ONLY solution. There are Loan Modifications, Deed in Lieu of Foreclosure, Cash for Keys, Forbearance and Repayment Plans, Principle Reductions, and more. But...where do these homeowners go to get help to decide what is the right path for them? Who is truly helping the masses?
Government Agencies and HUD offices across the country are in place to help homeowners to get out of foreclosure. Millions of dollars in tax payer funds have been distributed to deal with the massive amount of foreclosures, to provide advice to homeowners, at no cost to them, yet untold numbers of these people seeking help from these agencies are getting no further than they can on their own. Is this a good investment of out tax payer dollars?
Many agencies, professionals, media outlets, distribution flyers (it goes on and on) advise homeowners to obtain the help of an attorney, and the result is an influx of bankruptcies (many of which fail). Do attorney's really have any more training than the homeowner themselves on negotiation with their lenders? Are attorney fees justified if they fail to obtain the solution the homeowner so desperately needs? Will the FTC come down hard on attorneys for taking money from these people and providing no solution?
Over the coming weeks, I will blog about each of the solutions above, as well as the outlets to obtaining these solutions. I invite you to subscribe to my blog and comment on each and every one as they are posted. A true solution must be found, a way to get the masses educated, dispel the myths, and arm against the unscrupulous.
Your ideas, comments, and theories will be welcome here, and should this blog obtain the right sort of response, a new group in the AR community may be formed as well.
***Disclaimer*** Comments on this and any other posted blog may result in quotes. Should your comment be found to be of substantial substance, it may be copied or used in some way to illustrate a point. Comments may also be inspiration for other topic issues and utilized to create new blog posts concerning comment subjects.
Walter Getz is a founder of 1st Choice Mortgage Resolutions, a default resolution company, helping homeowners to get out of foreclosure. Should you have questions or concerns you may direct them to the number below.
1st Choice Mortgage Resolutions offers FREE consultation services to any homeowner facing default or foreclosure. You may obtain your free consultation by contacting our office at the number listed below.
1st Choice Mortgage Resolutions
1129 Monroe Avenue
(585) 287-5528
Personally, I don't put much stock in the national headlines. If you remember one thing after reading this blog entry, remember this: 
Because of our affordable home prices, tons of first-time buyers were able to use the tax credit to achieve their dreams of home ownership. Now, with the tax credit coming to an end on November 30th, the time for them to purchase has all but run out. Already our pending home sales are starting to flat-line.
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