Scott Walters Utah Real Estate Blog
by Scott Walters
Saturday, December 20, 2008
Can You Modify your loan terms? Save thousands!
by Scott WaltersAdapted from my real estate coaches blog.
by Tim Harris on
Are you having trouble with your mortgage? Chances are…you or someone you know is having problems or soon will be having problems paying their mortgage.
There have been various sources report very sobering statistics about the residential real estate markets.
According to the NAR there will be a little over 5 million home sales in 2008 (The NAR is predicting roughly the same number in 2009). Of those sales, some are expecting that roughly 50% will be ‘distressed sales’. In other words, foreclosures and shortsales. This is a staggering number when you consider the massive hardship this is creating for homeowners across the US. Not to mention the global recession that started with the US housing crash.
The good news for homeowners is that there are many options that may allow them to stay in their homes.
Mortgage Loan Modifications are becoming the the way out of “Foreclosure Hell” for millions of homeowners. Something that many homeowners don’t realize is that their current mortgage loan may be in viloation of the law. When starting a mortgage loan mod start with looking into the existing mortgage loan…is the mortgage on the property is a lawful one. Meaning that there are no Truth in Lending Act or RESPA violations and there wasn’t fraud involved on behalf of the lender or broker that originated your loan.
Step 1: Have an experienced mortgage law attorney examine your loan documents for these potential violations.
Step 2: The homeowner needs a complete written life of loan history to see all the illegal charges and fees included in their mortgage balance. Also, the homeowner should make sure that any inflated appraisal and/or loss of property value is calculated into the workout. We will be featuring an interview with an attorney who specializes in performing ‘Forensic Loan Audits’ sometime soon…check back.
It appears that the Fed will be ‘encouraging’ more lenders to adapt to the new FDIC standards for loans mods. The early attempts at loan mods had mixed results. Now that lenders are adopting the FDIC standards expect to see even more governmental support for Loan Mods.
From Wall Street Journal…
Add Fannie and Freddie to the list of financial institutions offering troubled mortgage holders a possible way out. The WSJ is reporting that Fannie Mae, Freddie Mac, and U.S. government officials are expected to announce plans today to speed up the modification of hundreds of thousands of loans held by the housing finance giants. (See Fannie, Freddie Work on Mass Loan Modification.)
The effort will target certain loans that are past due and will aim to bring the ratio of household debt to income for these borrowers down to 38%, Damian Paletta reports. It could apply to a broad range of borrowers. U.S.government officials plan to encourage big banks that hold loans in their portfolios to take similar steps.
Some banks already have. The Journal also reported today that Citigroup has unveiled a mortgage modification program aimed at those who are in danger of defaulting on their home loans — but haven’t yet. CitiMortgage is also halting foreclosures for about 16,000 borrowers who are behind on their loan payments but are working with the company on a loan modification.
55% Of California Home Sales are foreclosures! SO, over 50% of all home sales in Southern California were
Foreclosures.
Here is the article from the
OC Register…..
Foreclosed homes made up 55% of resale transactions in Southern California – 44% in Orange County and nearly seven out of every 10 sales in the Inland Empire – driving down prices to levels not seen since the spring of 2003, market-tracker MDA DataQuick reported today.
Last month’s price was roughly a buy-three-get-two-free sale for Southern California homes: The median price of a Southern California was $285,000, down 44% — or almost half off — from the value for similar homes at the market peak 18 months ago. That is, a single median-priced home cost $505,000 in June 2007. Last month, you could buy two median priced homes for $570,000, or just $65,000 more.
“Bargains and bargain hunters have kept this market alive,” the
DataQuick press release quoted company President John Walsh as saying.
November sales outpaced last year for a fifth straight month, up nearly 27% regionwide. That’s a decent showing considering that there were fewer business days last month than in a typical November. The average number of transactions per day, for example, was just 1% lower than the daily average in October, which had the highest number of sales for any month this year so far.
The median price for areas with the highest sale numbers was under $260,000, with about half of those sales using government-insured FHA financing, DataQuick reported. November sales tended to drop in coastal zones, where the median price was over $500,000 and financing was harder to find.
50% Of Boom Appreciation Gone Home Values Crash
More breaking news for all of you in California…..specifically Orange County.
“The OC”, as its know internationally was the epicenter for the sub-prime meltdown. Several of the nations largest Sub-Prime lenders were based…in The OC. It seems that the housing prices are losing virtually all of their bubble induced appreciation. In other words, homes are tracking to be worth what they would of sold for in 2000-2001. For the millions of homeowners caught in the downward depreciation death spiral this continued ‘correction’ is bad news indeed.
DataQuick’s median selling price for an Orange County home was $400,000, the lowest since since May 2003. Note:
Bottom of last cycle was $184,000 in January and March of 1996.
Peak of this next cycle was $645,000 in June ‘07. That was a 251% or $461,000 gain.
Reversal to November is a drop of $245,000 — or 38% — below the peak.
That means 53% of the 1996-2007 profit has evaporated.
