Posted earlier:
Michael Powell at the NY Times looks at short sales and foreclosures: Owners Seek to Sell at a Loss, but Bankers Push Foreclosure
The article offers two explanations for why lenders seem to prefer foreclosures: 1) short sale fraud, and 2) some incentives might favor foreclosure.
From Powell:
inancial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.In a more normal environment, servicers can "reap high fees" from foreclosures, but in the current environment there is a less of an incentive (since investors are reviewing all expenses closely). And mortgage insurance is a definite stumbling block to some short sales. But there is little evidence of the banks sitting on REOs to avoid taking losses (there just aren't that many REOs on their balance sheets) - so I think that point is incorrect.
Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.
When I've spoken to lenders / servicers, short sale fraud is always the first thing they mention. There are all kinds of possible frauds - from non-arms length transactions (selling to friends or relatives), off the record kickbacks to the owner, and "flopping", where the agent presents an offer to the bank from a partner - even though the agents has received higher offers, and then the partner flips the house after the short sale splitting the profits with the agent.
Even with all these problems, and the long waits for buyers, short sales have increased significantly this year.
From the NTSB accident report:
http://www.ntsb.gov/publictn/2003/AAR0303.pdf
“Several of the airplane’s systems, including the stall warning and deicing systems, were too damaged by postimpact fire and impact forces to determine their preimpact configuration and operability.”
“Most of the components of the deicing system were destroyed by postimpact fire.”
“On the basis of all of this evidence, the airplane was most likely not in the cloud layer in which moderate icing was present for enough time to accumulate any significant airframe icing. Further, any icing that the airplane might have accumulated would have been shed by the deicing equipment, or it would have begun shedding off the airplane’s
surfaces as it was descending through 5,000 feet because of the warming temperatures. In addition, the airplane’s performance was not consistent with the effects of icing, and flight simulations showed that the performance could be matched with and without simulated icing with enough reserve engine power available to increase the airspeed
during the descent. Therefore, the Safety Board concludes that icing did not affect the airplane’s performance during the descent.”
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New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
bench craft company
Posted earlier:
Michael Powell at the NY Times looks at short sales and foreclosures: Owners Seek to Sell at a Loss, but Bankers Push Foreclosure
The article offers two explanations for why lenders seem to prefer foreclosures: 1) short sale fraud, and 2) some incentives might favor foreclosure.
From Powell:
inancial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.In a more normal environment, servicers can "reap high fees" from foreclosures, but in the current environment there is a less of an incentive (since investors are reviewing all expenses closely). And mortgage insurance is a definite stumbling block to some short sales. But there is little evidence of the banks sitting on REOs to avoid taking losses (there just aren't that many REOs on their balance sheets) - so I think that point is incorrect.
Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.
When I've spoken to lenders / servicers, short sale fraud is always the first thing they mention. There are all kinds of possible frauds - from non-arms length transactions (selling to friends or relatives), off the record kickbacks to the owner, and "flopping", where the agent presents an offer to the bank from a partner - even though the agents has received higher offers, and then the partner flips the house after the short sale splitting the profits with the agent.
Even with all these problems, and the long waits for buyers, short sales have increased significantly this year.
From the NTSB accident report:
http://www.ntsb.gov/publictn/2003/AAR0303.pdf
“Several of the airplane’s systems, including the stall warning and deicing systems, were too damaged by postimpact fire and impact forces to determine their preimpact configuration and operability.”
“Most of the components of the deicing system were destroyed by postimpact fire.”
“On the basis of all of this evidence, the airplane was most likely not in the cloud layer in which moderate icing was present for enough time to accumulate any significant airframe icing. Further, any icing that the airplane might have accumulated would have been shed by the deicing equipment, or it would have begun shedding off the airplane’s
surfaces as it was descending through 5,000 feet because of the warming temperatures. In addition, the airplane’s performance was not consistent with the effects of icing, and flight simulations showed that the performance could be matched with and without simulated icing with enough reserve engine power available to increase the airspeed
during the descent. Therefore, the Safety Board concludes that icing did not affect the airplane’s performance during the descent.”
bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
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bench craft company
bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
bench craft company
Posted earlier:
Michael Powell at the NY Times looks at short sales and foreclosures: Owners Seek to Sell at a Loss, but Bankers Push Foreclosure
The article offers two explanations for why lenders seem to prefer foreclosures: 1) short sale fraud, and 2) some incentives might favor foreclosure.
From Powell:
inancial incentives can push toward a foreclosure rather than a short sale. Servicers can reap high fees from foreclosures. And lenders can try to collect on private mortgage insurance.In a more normal environment, servicers can "reap high fees" from foreclosures, but in the current environment there is a less of an incentive (since investors are reviewing all expenses closely). And mortgage insurance is a definite stumbling block to some short sales. But there is little evidence of the banks sitting on REOs to avoid taking losses (there just aren't that many REOs on their balance sheets) - so I think that point is incorrect.
Some advocates and real estate agents also point to an April 2009 regulatory change in an obscure federal accounting law. The change, in effect, allowed banks to foreclose on a home without having to write down a loss until that home was sold. By contrast, if a bank agrees to a short sale, it must mark the loss immediately.
When I've spoken to lenders / servicers, short sale fraud is always the first thing they mention. There are all kinds of possible frauds - from non-arms length transactions (selling to friends or relatives), off the record kickbacks to the owner, and "flopping", where the agent presents an offer to the bank from a partner - even though the agents has received higher offers, and then the partner flips the house after the short sale splitting the profits with the agent.
Even with all these problems, and the long waits for buyers, short sales have increased significantly this year.
From the NTSB accident report:
http://www.ntsb.gov/publictn/2003/AAR0303.pdf
“Several of the airplane’s systems, including the stall warning and deicing systems, were too damaged by postimpact fire and impact forces to determine their preimpact configuration and operability.”
“Most of the components of the deicing system were destroyed by postimpact fire.”
“On the basis of all of this evidence, the airplane was most likely not in the cloud layer in which moderate icing was present for enough time to accumulate any significant airframe icing. Further, any icing that the airplane might have accumulated would have been shed by the deicing equipment, or it would have begun shedding off the airplane’s
surfaces as it was descending through 5,000 feet because of the warming temperatures. In addition, the airplane’s performance was not consistent with the effects of icing, and flight simulations showed that the performance could be matched with and without simulated icing with enough reserve engine power available to increase the airspeed
during the descent. Therefore, the Safety Board concludes that icing did not affect the airplane’s performance during the descent.”
bench craft company
bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
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bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
bench craft company
Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
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Facebook "Unlike" Button Comes to the <b>News</b> Feed
Facebook quietly introduced an "Unlike Page" button into its News Feed recently, which allows users to opt-out of receiving unwanted messages from pages they had previously said they ...
New Rock Type Found On Moon - Science <b>News</b>
Odd spots on the lunar farside could be ancient material from deep inside.
Fox <b>News</b> Wins Midterm Election Ratings, Cybill Shepherd to Guest <b>...</b>
After voting for their favorite candidates in the midterm elections yesterday, Americans made another choice: their preferred news network. Ratings f.
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In this era of worldwide economic downturn, a person may be in real rough waters if the net worth of his or her house is less than what the person owes to the bank! But the comforting fact can be that there are many such cases. However, one certainly needs to evacuate one's self from such a situation as soon as possible. A person in such a situation can benefit from the following choices before deciding to do away with the house - or worse - before being forced into foreclosure.
Altering loan: The fundamental model of lender is based on loan repayment and not on losing the loan. Therefore, banks would want people to pay back their loans. Financially, banks make profit only when borrowers repay and the interest on the principal works towards the lender's profit. However, on defaulting, if one receives foreclosure notice then it should not be viewed as end of the world. At any point one can save ones home and ones credit. The following are the alternatives:
1. Reduce the loan: If your homes current valuation is lesser than the owed amount then reach out to the lender's loss hedging group. Show the group the evidence for lower valuation of home. You can bring out evidences like the selling price of similar flats in your neighbourhood, which have been sold for much lesser price. If the lender trusts the evidence, then the lender may reduce the owed amount. This reduced loan amount would translate into lower equal monthly instalments.
2. Stretch the loan: One effective way to reduce the monthly instalment is to prolong the repayment tenure. Basically, extend the number of years in which one intends to repay the loan. This brings down the monthly burden on a person.
3. Reduced interest rate: The interest rate, if flexible by nature, can work to ones advantage. Generally, flexible interest rate works well when the chips are down and rates are rising; the fixed interest rate will be much higher in struggling economy. If the monthly repayment becomes un-payable because of rising interest rates then one should reach out to the lending institution. Often the lender would prefer reducing the interest rate to foreclose.
IMPORTANT: Be in constant touch with your lending institution. This aids in proceeding positively with foreclosure processes. Basically, establishing credibility with lending institution and not just considering them as one time money providers helps when the person faces tough times.
Halt your monthly re-payments now to continue later
You can request forbearance - a pause in monthly payments - to the lender. This is useful in the event of missing out on couple of monthly payments and while anticipating a bulk money in near term. The borrower uses the bulk money to repay the missed payments as well as to resume the monthly payments. On forbearance, the lender agrees to temporarily stop getting monthly payments from borrower. Reinstatement brings the borrower back on monthly payments scheduled track.
Plan to give more every month
To slowly get even with the missed monthly payments, one can resort to a plan where a chunk of money on top of the monthly repayment is paid to the lender. A person can do this when they have disposable money currently and are uncertain of future earnings and therefore would want to hedge their future risk y paying more currently. As always, the lender needs to agree to this plan.
Rent out house
Face the reality. Shift to an economical place and rent your place, if you are unable to repay the monthly payments while staying in that home. Even if the rent does not meet the repayment amount entirely, then it may be a good idea to cover the remainder by self. Dispose the home once sales recover. By doing so, one may find oneself having gained some money at the end of the complete deal.
Dispose the house off
If the financial situation is an impasse and one is not able to pay for home at all then a quick sale circumvents the foreclosure. Basically, in this one needs to sell his or her house at a price lower than the prevalent price in the market. Exiting is the only driving factor in this choice. The lender may agree to accept the lower amount and discount the outstanding and they may also decide that the borrower should pay the whole or part of the difference. A payment plan for the balance money can be devised by the lender.
Resale home and let new buyer carry forward the loan
While your repayment is going on, selling the home may not be an option because of lenders loan terms and conditions. Resale may be an option if the lender is informed of every move and decision. On having a moderate interest rate and loan amount, sell your home to a buyer who will take over your loan and continue to pay the lender the future monthly instalments as per your schedule. Be aware of thugs who can cheat and leave you in a situation worse than present. In worst cases, sellers sold their homes but continued to own the mortgages.
Accede to situation and give-up your home
Surrendering the home instead of the loan is a better trade-off than foreclosure. The former makes lesser dent on your credit report as compared to the later. In this, the home is given-up - on your own - to the lender. Obviously, there is softer aspect of conscientious move being involved which makes this better over the worst.
A foreclosure is a blot on person's credibility. It symbolises a failed person. Foreclosure tells that the person disobeyed the legal agreement on a very vital financial responsibility. It adds that the manner of disobedience forced the bank to knock the door of law and take him or her to court.
Foreclosure keeps haunting the person forever. Credit check is a must in all aspects of life - be it for rent application or making any other financial decision or applying for a new job. Housing Agencies, property agents, and prospective-employers all engage in credit check before making their decision. With foreclosure on credit report, one is portrayed as a maligned person. Surely no one would want to be branded as a cheat and hamper his or her other financial or other necessary needs in years ahead.
At all prices avoid foreclosure. They are detriment not only to a person's future years but negatively impacts all near dear ones. If they become a common phenomenon then they have the potential of bringing down an entire economy.
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