My wife spent Friday night with a couple of girlfriends while I was dragging myself through the last shift of an awful week. She had some interesting news for a Saturday lunch. She told me one of her buddies, a property appraiser had sent Bank of America and appraisal on a home where the bank was offering to reduce the interest rate to 4.5 percent. All the home owner had to do was pay a few hundred dollars for the appraisal and sign the papers. Bank of America paid the costs of the refinance operation. "We're calling Wells Fargo!" my wife said with a gleam in her eye.
.Then I read an item in Mish's Financial Monitor, a well known observer of the economy, one of those voices that sits outside the mainstream CC/Fox/WSJ arena. He had an item reporting that investors in Countrywide, the mortgage company bought by Bank of America in one of it's more stupid moments, are now fighting Bank of America's mortgage modifications. Investors in Country wide could legally force Bank of America to buy outright $80 billion dollars-worth of loans. This, because the investors in Countrywide are having their own stupid moment. Bank of America hasn't suddenly gone soft, it just figures it's better to keep people in their over priced homes paying a monthly nut, even a reduced one, rather than having them step away.
.The investors in Country wide must be thinking this is their way to get paid off and escape the crisis, but instead if they block the loan modification program they will end up pushing more and more people out of their mortgages with predictable consequences. I shudder as I think of the estimates 600 homes in foreclosure proceedings in the Lower Keys. I have not added up the number myself let me hasten to add, but that is the number currently bandied about.
.The thing that struck me about this story was that my economic mentor Ty sent me a complicated paper some weeks ago describing this dilemma precisely. The discussion mentioned the fact that most mortgages are being used to back investment packages that ultimately control the loan, and should the federal Government chose to modify the terms of the loans the holders of the investment packages can legally force the government to buy the loans outright. And guess what? Here it is- happening exactly as predicted!
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This economic crises is much more far reaching and complex than a lot of people want to think it is. I hope we get a new set of l;eaders who can talk truth to us and invovle us in what they plan to do.
7 comments:
Not a plug, but our new leaders could look to Seth Godin's Tribes. "Lead Us, and do so with all in the open"...
Nobody knows where it's going to end, how it's going to end and where it's going to leave us.
yes, loan modification is the answer for foreclosure and short sale.My friend worked at Maximondo Modification Consultant Corp. 7735888776 of chicago,il 60618 and they told me they helped a lots of homeowners although Lender are the one who give too much pressure and headache to the homeowners. They wished that the government shold intensify and streamline the loan modification. The lenders takes too long to approve the loan modification. They should enforced that approval must be made wihin 30 days and must have a direct contact person,tel,fax an demail address.
Thats what I plan to tell Wells Fargo when we call and ask about a reduction to 4.5% on our fixed rate! Wells Fargo was one of the more cautious banks so we are probably going to be casting seed on stony ground...
For the average person finding a loan is a myriad of paperwork and a lot of legal jargon that is not easily understood. If you are in debt and need a loan to get your finances straightened out, you should check out cheap loans. They are available if you know where to look.
This economic crises is much more far reaching and complex than a lot of people want to think it is. yes indeed and it affects everybody in the world...
I think if we're talking about the overall usefulness of mortgage loan modification, I think it hugely beneficial. It really does take thousands off your debt. My friend recently did this, and she now has the drive to work harder because she actually gets to keep her money instead of it always going to the debtors.
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