Mortgage News
Mortgages

Mortgage Modification Madness (Part 1)

Oct 3, 2009 - By the end of the second quarter of 2009, over 13% of all residential mortgage borrowers were either delinquent by 30+ days in their loan payments or were actually in the foreclosure process. In the sub-prime mortgage category, 26.52% of borrowers were delinquent in their payments contrasted with 5.44% of prime mortgage borrowers having fallen behind. Government estimates project that approximately 10 million homeowners are at risk of defaulting on their payments. From that total, the government believes almost 40% of those at risk could be helped and a potential problem avoided. A number of programs have been launched in the past several years targeted at helping distressed homeowners with very limited success to show for the effort. The Hope Now Alliance was launched in the fall of 2007 and the program successfully modified just several hundred thousand mortgages with almost half of the participants in turn having re-defaulted on their loan payments. The Hope for Homeowners program was then initiated in the summer of 2008 and after failing to make significant headway in assisting the approximately 400,000 homeowners the program was targeted to reach, the government announced plans to revamp the program. Next, in March of 2009, the Obama Administration proposed its Making Home Affordable program which was hoped to assist 7-9 million homeowners.

 

The lack of success realized by each of these programs can be attributed in large part to the fact that participation by the key players: the lender, mortgage servicer and the investor, has been completely voluntary. The securitization process, which converts loans into pools of mortgage bonds and then sells them off to investors, was a major system flaw contributing to the mortgage crisis and now in turn appears to be the obstacle preventing a solution. Getting all of the players involved in the process to sign off on any changes to the original terms of the mortgage is both a logistical and legal nightmare and one of the key reasons why so many homeowners remain stuck with their toxic mortgage. Homeowners are justifiably confused about the mortgage process and who controls their loan, with many borrowers believing that a polite phone call to their lender, along with a valid hardship explanation, is all that should be required for the lender to change their loan terms and save their home. The distressed homeowner sees modification as a win-win solution for both themselves and their lender and cannot understand why the lender is so slow to act. What unknowing borrowers do not realize is that this should be a simple process with their lender, notwithstanding the securitization process which brought a number of interested parties and decision-makers into their home.

 

The maze of players in the loan process has become so complex, compounded further by the number of bank failures and resulting mergers and acquisitions, that only a judge is truly capable of fairly sorting out the mess and assigning responsibility to determine a fair resolution for all interested parties. Judges are permitted to modify the terms of consumer debt in the course of bankruptcy proceedings, however several attempts to grant judges this same authority with regard to mortgage debt, commonly referred to as the “cram-down provision”, have ended up going nowhere in the legislature. As long as the modification process remains a voluntary one, it will also remain a protracted, painful and ultimately a very costly one while distressed properties continue to flood the market spreading the pain to all homeowners.

Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state


Nancy Osborne, ERATE.com Nancy Osborne has had experience in the mortgage business for over 20 years and is a founder of both ERATE, where she is currently the COO and Progressive Capital Funding, where she served as President. She has held real estate licenses in several states and has received both the national Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. Ms. Osborne is also a primary contributing writer and content developer for ERATE.

"I am addicted to Bloomberg TV" says Nancy.

Continued at Mortgage Modification Madness Part II

Loan Modification Game Borrowers vs Servicers

Mortgage Modification available for jobless!

Liar Nation- Mortgage Modification

Government Announces Loan Modification Applicants Appeal Process

 

    

 

 

 

 

Follow the link to continue reading the related articles.

More Mortgage Help on the Way?

New FHA Program Launches: Details, and How to Apply

Lending Standards Stricter Industry Wide

Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state





iPad for Mortgage Rates