Posted by Shoshana/AZ on 9/28/10 12:47am
Msg #354505

Pete Seeger said this best!

Last week I was listening to a Phx Real Estate att'y on KTAR. Did you know that
the banks make a ****load of money on foreclosures? They get paid on the mrtg because it's insured. Then they auction the property for a fraction of its value! This is why the Phx RE market is going to **** in a handbasket! Our values will continue to decline until this practice is ended. This is the one reason why loan mods don't work.

Listen to Pete Seeger!

http://www.youtube.com/watch?v=x-o3CJytIPE

Reply by MW/VA on 9/28/10 7:23am
Msg #354521

Interesting, Shoshana. The banks also got gov. help with bailout loans. Some things never change.

Reply by Cari on 9/28/10 7:36am
Msg #354526

NOT all lenders took the bailouts remember that... n/m

Reply by MW/VA on 9/28/10 7:39am
Msg #354527

I was only making note of the fact that the more bailout

money went into the lender side than the borrowers side. I know I never say the landslide of loan mods that many of us were expecting.

Reply by Cari on 9/28/10 7:36am
Msg #354525

I've not listened yet, but he or you is wrong about

loan modifications. It definitely benefits the homeowner by allowing them to KEEP their home even though they are fully aware that they are moving backwards and getting basically a new loan, BUT at an interest rate that will allow them to continue paying on their mortgage and keep them and their family in their home.

So no, I don't agree, loan mods are definitely good. Will write more as to why its good for lenders but have an appointment this morning...

Reply by Shoshana/AZ on 9/28/10 8:33am
Msg #354536

These are the facts of life regarding loan mods

The point is that loan mods that go through are few and far between because the banks have no financial incentive to approve them. They make far more money on forclosures. The mortgages are insured. So they get paid the full amount. Then they turn around and sell the property at auction fror a ridiculously low price. This contributes to the decline in property values in a huge way.

Reply by Linda_H/FL on 9/28/10 9:42am
Msg #354541

Correct me if I'm wrong....but if those loans are insured

it comes into play if the *lender* goes under - not in the event of foreclosure. Taking insurance proceeds, THEN selling the property THEN pursuing the borrower for the deficiency would be double-dipping, which I believe is illegal.

Maybe I'm missing something here and, no, I didn't listen to Pete.

Reply by Donna McDaniel on 9/28/10 9:58am
Msg #354550

Re: Correct me if I'm wrong....but if those loans are insured

This is an interesting video sent to me by a friend a few days ago. Made my head hurt, upsetting.

Reply by Donna McDaniel on 9/28/10 9:59am
Msg #354552

Probably help if I linked it.

http://www.youtube.com/user/fiercefreeleancer

Reply by Shoshana/AZ on 9/28/10 10:02am
Msg #354554

Re: Correct me if I'm wrong....but if those loans are insured

AZ is an anti-deficiency state. Even so, the some lenders illegally try to pursue the borrowers, according to this attorney whose name is J Robert Eckley.
Pete had nothing to say about loan mods. It was really about how the banks take advantage of the farmers, etc in the 1930's during the Great Depression.

Reply by C. Rivera Chicago Notary Services on 9/28/10 3:29pm
Msg #354619

load mods vs foreclosure, interesting article below...

"Lenders are known to be difficult when it comes to loan modifications. But did you know that they benefit at least as much from the process as you do? The main reason they balk at mortgage modification is that they have to train agents to handle them, and each case requires individual attention. But it also saves them a good deal of time compared to foreclosure, and may even have a few long-term benefits. Here are some good reasons why your lender might prefer a loan modification over a foreclosure.

It's faster and cheaper. In a foreclosure, there are specific wait times that allow the borrower to get current with their mortgage. It's not uncommon for the process to drag on for almost a year. These delays can cost your lender a good deal of money. A loan modification, on the other hand, takes an average of 30 to 60 days. All they have to do is go over your documents, talk to your loan modification attorney, and see if you qualify. The negotiations are the hardest part, but they don't cost quite as much as foreclosure expenses.

It's less work. To start the foreclosure process, your lender will have to assess late charges, file a Notice of Default, pay heavy lawyer fees, and arrange an auction to sell your home. And if you manage to get back on track and stop foreclosure, all the work simply gets filed away. Loan modifications involve less work on their part. You and your loan modification attorney will do most of the work and provide most of the documentation. Often, all they have to do is assess your case and decide what kind of mortgage assistance you will need.

It helps keep investors. Foreclosures are as damaging to your lender as they are to you. It may benefit them for now, but with the recent housing bubble, it will eventually weigh them down. Investors don't want to deal with banks that have too many foreclosures on record. If they grant you a loan modification instead, your payments will keep showing up on their records instead of being written as bad debt.

Of course, this doesn't make it any easier to get what you want from your lender. After all, you're still a liability-and it's important to prove that you can get back on your feet. To get the best loan modification deal, you need a good lawyer who knows the what lenders need and can convince them that it's the wiser choice to settle a loan modification."

http://EzineArticles.com/?expert=Gavin_P

Reply by ReneeK_MI on 9/28/10 10:15am
Msg #354556

wouldn't it ultimately hurt the banks, too?

Devaluation of the market doesn't exactly give them any 'wins' any more than it does us. This is definitely a lose/lose economy.

Reply by Shoshana/AZ on 9/28/10 10:43am
Msg #354561

Re: wouldn't it ultimately hurt the banks, too?

Why should it hurt them? They are raking in tons of money. People are buying properties at auction at rock bottom prices. The banks are still making loans. I don't believe that they are bothered by devaluation of the market. Attend a foreclosure auction. It's an eye opener.

Reply by janCA on 9/28/10 11:07am
Msg #354563

Shoshana, would you elaborate on the foreclosure auctions.

Have you attended an "REDC" auction? There is one coming up in Fresno for Visalia properties. I decided to take a look at some of these homes, just to see what location, condition, etc. There was suppose to be an open house this past Saturday, I went to four homes, none were open for viewing. I did some research on REDC and 95% of the comments, opinions were extremely negative about this company. People stated that there were shills in the audience running up the bid. Also, that the auctioneer himself could actually bid for the lender or "Fannie Mae" as it were. And that the bidding online was a joke. And many other derogatory comments about how this company conducts business and is very unprofessional and basically they are scammers. I would really like to hear your comments about the auctions you have attended. Thanks.

Reply by ReneeK_MI on 9/28/10 11:57am
Msg #354567

The banks are still securitized by far more ...

properties than they've foreclosed on. Therefore, the general devaluation ultimately affects their own securitized value - is what I mean. I'm not trying to defend their ill-gotten gains, I'm just thinking this through. I don't see any reason for them to WANT to devalue properties, I don't see what they'd ultimately gain. Maybe I'm missing it.