While working on a loan modification, sometimes the terms just can not be worked out. Maybe the Borrower doesn't have pay stubs or doesn't show enough income to qualify for a fully amortized loan.
In Forebearance, the underlying note remains unchanged but the bank and the Borrower both agree to modified terms to get the Borrower back on track. This is a temporary stop gap approach to the foreclosure issue.
Forebearance keeps the Borrower in their home and it keeps the loan in the Bank's "performing assets" file.
Wednesday, February 18, 2009
Saturday, February 14, 2009
NOD Filings Dropped in January
January brought an unexpected, across the board drop, in the total Notices of Default, Notices of Trustee Sale, and sales at auction in California, not only from the prior month, but year-over-year as well, according to a report released by ForeclosureRadar on Thursday.
Housing and default activity in California is often used by analysts and experts as a barometer for measuring the state of the overall housing market, and ForeclosureRadar tracks every foreclosure in the Golden State, providing daily auction updates on foreclosure property sales.
Based on ForeclosureRadar's data, California's Notices of Default decreased 11.8 percent over Notices recorded for December and are down 10.6 percent from January 2008. Due to the fact that January had two fewer recording days then December the average daily decrease was 3 percent.
3% decrease in Default filings in December. Isn't it funny how everything needs to be "headline grabbing"!
In the interest of looking good, Fannie and Freddie had publicized how they were taking the holidays off. Homeowners got a reprive so they could enjoy the holidays.
If that's so, why are these numbers so high? A 3% drop doesn't sound like a lot when I put it into that context.
Secondly, I just heard a statistic that approximately 3% of mortgages are in default.
If that number is true - which it came from an awesome economist that I LOVE - then I am really tired of hearing about all the doom and gloom.
This too shall pass. There is opportunity in every market. Kill your TV! :-)
Friday, February 13, 2009
Mixed Emotions
TEXAS BORROWERS RECEIVE RESTITUTION
DALLAS (Dallas Morning News) – As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from the lender.
The settlement has reserved $7.5 million for Texas to distribute restitution payments worth $2,300 to help borrowers who already lost their homes or are near foreclosure — 120 days or more delinquent on payments.
About 3,260 Texans are eligible for restitution, according to a spokesman with the Texas Attorney General's office.
Under the settlement, borrowers could get the $2,300 payment if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home.
For borrowers who can't afford to refinance their mortgage and have to leave their home through a foreclosure sale, the settlement provides relocation assistance of $2,000 per borrower.
My first impression is that we are a bunch of big irresponsible babies. We can't drive with coffee in our laps. We can't take responsibility for our MEGA consumption and ruin of the earth. Now we also can't be expected to actually read what we're signing. Who are these people that bought houses that they could only afford for 6 months?
I honestly don't know the extent of this lawsuit. I haven't read what the complaint was. I haven't done any research. All I know is that a few people that overextended without considering the consequences have now made getting a loan so hard that it's considered a heroic event!
I'm blaming it on all the Jocks in high school. The ones that would do anything to bed a cheerleader :-)
DALLAS (Dallas Morning News) – As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from the lender.
The settlement has reserved $7.5 million for Texas to distribute restitution payments worth $2,300 to help borrowers who already lost their homes or are near foreclosure — 120 days or more delinquent on payments.
About 3,260 Texans are eligible for restitution, according to a spokesman with the Texas Attorney General's office.
Under the settlement, borrowers could get the $2,300 payment if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home.
For borrowers who can't afford to refinance their mortgage and have to leave their home through a foreclosure sale, the settlement provides relocation assistance of $2,000 per borrower.
My first impression is that we are a bunch of big irresponsible babies. We can't drive with coffee in our laps. We can't take responsibility for our MEGA consumption and ruin of the earth. Now we also can't be expected to actually read what we're signing. Who are these people that bought houses that they could only afford for 6 months?
I honestly don't know the extent of this lawsuit. I haven't read what the complaint was. I haven't done any research. All I know is that a few people that overextended without considering the consequences have now made getting a loan so hard that it's considered a heroic event!
I'm blaming it on all the Jocks in high school. The ones that would do anything to bed a cheerleader :-)
Wednesday, February 11, 2009
Are TICs Real Estate Product or Securities
There's been debate - for years - about who can sell a TIC.
TIC stands for Tenants in Common and has been used as a way to hold title on real estate. This fractional ownership has been used in the last 8 +/- years for small investors to be able to pool their money and buy large class A buildings that the little guy could never get into before.
Realtors thought this type of sale was real estate and stock brokers though this type of sale was securities.
On January 14, 2009, the SEC published its response to a request for a no action letter. The request, which was submitted to the SEC in 2006, described two TIC structures (using a master lease or a property management agreement) that are commonly used by sponsors who take the position that they do not need to comply with the securities laws. The letter urged the SEC to rule that such transactions should not be considered securities under Section 2(a)(1) of the Securities Act of 1933. In its response, the SEC said that it disagreed with that view and could not assure the taxpayers requesting the opinion that a sponsor adopting these structures would not be subject to an enforcement action by the SEC.
This recent statement confirms the SEC's view that TICs should be marketed and sold as securities. It is likely that some sponsors who sell TICs as real estate will stop doing so out of concern about being the subject of an enforcement action; however, some sponsors will probably continue to sell TICs as real estate.
What do you think?
TIC stands for Tenants in Common and has been used as a way to hold title on real estate. This fractional ownership has been used in the last 8 +/- years for small investors to be able to pool their money and buy large class A buildings that the little guy could never get into before.
Realtors thought this type of sale was real estate and stock brokers though this type of sale was securities.
On January 14, 2009, the SEC published its response to a request for a no action letter. The request, which was submitted to the SEC in 2006, described two TIC structures (using a master lease or a property management agreement) that are commonly used by sponsors who take the position that they do not need to comply with the securities laws. The letter urged the SEC to rule that such transactions should not be considered securities under Section 2(a)(1) of the Securities Act of 1933. In its response, the SEC said that it disagreed with that view and could not assure the taxpayers requesting the opinion that a sponsor adopting these structures would not be subject to an enforcement action by the SEC.
This recent statement confirms the SEC's view that TICs should be marketed and sold as securities. It is likely that some sponsors who sell TICs as real estate will stop doing so out of concern about being the subject of an enforcement action; however, some sponsors will probably continue to sell TICs as real estate.
What do you think?
Tuesday, February 10, 2009
Landlord Scams
Just met another prospective tenant that has to move because her landlord is being foreclosed on. She just moved in, gave a hefty deposit and now has to move.
It seems there are a lot of desperate people out there! I wrote about the scams on Craigslist where people posed as property owners and rented out homes that were in default. These "posers" took people's money and disappeared.
I don't know what to do to stop this theft. All I know how to do is to warn you of it's occurence.
If you need help checking on a property - and whether it's in default or researching who the owner is - just shoot me an email.
I am here to help.
R
It seems there are a lot of desperate people out there! I wrote about the scams on Craigslist where people posed as property owners and rented out homes that were in default. These "posers" took people's money and disappeared.
I don't know what to do to stop this theft. All I know how to do is to warn you of it's occurence.
If you need help checking on a property - and whether it's in default or researching who the owner is - just shoot me an email.
I am here to help.
R
Tuesday, February 3, 2009
Coming from Zillow...
It's no secret that Zillow values are "approximations". I was looking at a home today that Zillow valued at over double it's worth in today's market.
That being said, what do you think about this headline:
DALLAS (Dallas Morning News) – Almost 16 percent of homeowners in the Dallas–Fort Worth area are "underwater," according to a new report from Zillow Inc.
That’s about 1 percent less than the nationwide number of homeowners who owe more than their homes are worth, the Internet real estate company found.
In addition, DFW homeowners lost almost $4 billion in home value last year.
Overall home values in the area fell by less than 2 percent last year, compared with an almost 12 percent drop nationwide.
That being said, what do you think about this headline:
DALLAS (Dallas Morning News) – Almost 16 percent of homeowners in the Dallas–Fort Worth area are "underwater," according to a new report from Zillow Inc.
That’s about 1 percent less than the nationwide number of homeowners who owe more than their homes are worth, the Internet real estate company found.
In addition, DFW homeowners lost almost $4 billion in home value last year.
Overall home values in the area fell by less than 2 percent last year, compared with an almost 12 percent drop nationwide.
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