Foreclosures Are More Profitable Than Loan Modifications?

The Washington Post printed an article today stating that in many cases, it’s more profitable for the lender to foreclose rather than work out a loan modification with the homeowner.

Finally, we have someone telling the REAL truth about why lenders aren’t modifying more loans!

A lot of people have been scratching their head trying to understand why lenders aren’t modifying more loans, especially given the government’s financial incentives to lenders to modify more loans.

As usual, the lenders are acting in their own self interests because they can. Remember, your taxpayer dollars are shoring up their bottom lines and now they don’t have to negotiate with you because they already have your bailout money.

It’s hard for me to imagine how it could be more profitable for a lender to foreclose rather than working out a loan modification given the falling home prices.

Of course, there are other reasons why modifications supposedly aren’t working. I keep hearing a lot about how lenders are woefully understaffed and underequipped to handle the sheer volume of homeowners who are asking for help right now.

This is just a weak excuse for the lender’s failure to act. Unemployment is at a record high in this country. CitiMortgage, Wells Fargo and Bank of America have a talented pool of unemployed workers who need jobs. Why aren’t they hiring more people?

So how can you fight foreclosure and save your home?

First, get a loan audit before you do anything else! Go here to learn more about how you can get a loan audit. If you can’t afford to have a professional auditor perform the audit, I’ve written a Do It Yourself Audit eBook that you can purchase.

Modifying a loan without a loan audit is a bad idea for several reasons.

First, if there are predatory lending patterns in your documents and you don’t know about them, and you modify the loan, you waive your rights to pursue the lender in court for the bad loan you originally received.

Second, if the lender lied to you by failing to disclose all the details of the loan, this is leverage against the lender to get a better loan modification instead of just accepting the standard loan modification they give everyone else.

Third, follow up with a competent professional who will aggressively represent your interests in forcing the lender to modify your loan fairly. I suggest you use an attorney for this – a good one will almost always get you a better result than you can get on your own.

I know, it sucks to have to hire an attorney. Many people got into this mess because they didn’t understand the documents they were signing, and a home is the biggest investment most people will make in their lifetimes. It’s worth it to pay someone to do it right.

Finally, consider filing a lawsuit against your lender if your loan stinks of predatory lending. When more people stand up to the banks, this nonsense of the banks not helping people will stop. We’re all held accountable for our actions as individuals; why shouldn’t the banks be called out for screwing homeowners and refusing to help them? I am working hard on finding attorneys who will be good partners for homeowners, so contact me for a referral if you need one.

If you have questions, post them in the forum or send me an e-mail: Christine@DesertEdgeLegal.com.

Hidden Victims of the Foreclosure Crisis – Video

Fresno, CA (KFSN) — Hundreds of Valley families are paying their rent on time, and still getting evicted. It’s all due to a foreclosure crisis they say they did nothing to create.

Wells Fargo Sues Itself To Foreclosue On A Property?

Wells Fargo is now suing itself in order to foreclose on a property in Tampa, FL. They do this so they can push the homes through the Foreclosure process faster so they can sell it and make more money!

Foreclosure Trackers Launches Real Estate Agent network

Foreclosure Trackers is a data aggregator and educational company.

Robert Lee, CEO of Foreclosure Trackers. “The launch of our Real Estate Agent Network provides real estate professionals with fundamental tools necessary to succeed in this shifting market. We are equally excited to announce the appointment of Sean Stanfield, a well-respected leader who will be instrumental in identifying practical solutions that Foreclosure Trackers can offer to professionals throughout the state and potentially the nation.”

How SB 1137 Stopped Foreclosures

What is SB 1137? It’s a California law that requires lenders to make a series of attempts to contact borrows before the foreclosure process can start. Once completed, banks still have to wait another 30 days before they can start the foreclosure process. So what has this done to the California housing market? It has dropped the number of foreclosure from August to September by 68%.

However, this law does nothing to stop foreclosures; it just delays the process and delays the much needed housing recover in Bubble Land (California.)

Click here to read more about SB 1137 and other Foreclosure news.

Sheriff Halts Renter Foreclosure Evictions

As reported in the Consumerist.com.

A Chicago Sheriff stops evictions of Renters caught up in the Foreclosure process (at least for the time being.)

The banks are not happy with Sheriff Tom Dart’s decision.
Read the full story as reported by Reuters.

90 year old woman shoots herself during a Foreclosure eviction

This is getting out of hand. A 90 year old woman in Ohio is given a 30 year mortgage on her home in 2007. Yes, you heard me right and it gets even stranger. She bought the home in 1970!!! What company would think this is a good loan? Country Wide, of course!

After missing several payments Fannie Mae assumed the mortgage and started the foreclosure process. Sheriffs attempted to evict her 30 times with no luck. In the latest attempt the women shot herself twice in the upper torso. She survived.

The after math. Fannie Mae decided to cancel the foreclosure, forgive her loan and let her keep the house.

This whole thing is a national shame.

Read the full story here: CNN

Mortgage Melt Down Video

PBS has a very well done video piece on the Mortgage Crisis. You can check out the video here.

The Synopsis:
This week, NOW travels to North Minneapolis to investigate the mortgage meltdown that has left the city scarred with boarded-up and abandoned houses. What’s happened in communities like this one has investors everywhere shaken. Wall Street firms are stumbling and markets around the globe are nervous. Economists worry the mortgage bust may lead to a recession.

NOW connects the dots to see the extent to which recklessness, corruption and greed created this subprime mess that now threatens to undermine our entire economy. David Brancaccio talks to Rep. Keith Ellison, who grew up in North Minneapolis and who has pushed legislation to address the crisis. He also talks to Ameriquest whistleblower Mark Bomchill, who explains the competitive “boiler room” culture that encouraged brokers to aggressively push mortgage products they knew clients would be unable to repay.

Lenders Move to Limit Foreclosures

The [tag]foreclosure market[/tag] is at an all time high. This is bad for [tag]homeowners [/tag]facing foreclosure, its good for people in the foreclosure sales business, but it’s really bad for the whole economy. With the recent wave of foreclosures around [tag]sub-prime loans[/tag] many in the industry are working to stop the [tag]financial[/tag] nightmare ahead.

“This rescue effort isn’t expected to save every at-risk homeowner. But it promises to reduce monthly payments for many who have fallen behind on mortgages. In the process, it could help to stabilize a struggling real estate market.”

- Yahoo! News

This is the [tag]worst housing market[/tag] since 1990, but maybe with these [tag]lender bailouts,[/tag] stricter lending rules around credit in the future may help to reduce the pain of current situation.