graphrix_IHB
New member
CapitalismWorks said:
That's what happens when you live in...
http://www.queensinthekingdom.com/Photos/FantasylandHK.jpg
"4 weeks and then all hell breaks loose"
- Thread starter Geotpf_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
That's what happens when you live in...
http://www.queensinthekingdom.com/Photos/FantasylandHK.jpg
He wants to take over me in being the nastiest person on the internet. He is doing a really... really good job too.
Because they stopped paying before Jan 1 of 09.
Even if they did they don't want a mod. They are so far upside down at this point they just want to walk away.
Last time I checked the loans that caused a lot of this were zero down. So if Housing prices have gone down 5% then they would owe more then 105% of the loan.
I am not sure but I think RE in the area has gone down a little more then 5%
You are right I misread that one I thought the loan needed to be current at that point. It needed to be made before that.
The point still stands though not a lot of people will qualify for a loan mod in CA. We are not talking subprime here on the next wave. Many of the next in line will be over the 729k.
The other sticking point is if Forebearance is used it isn't forgiven. Look at page 9 in your link.
The other thing that sticks out at me is you pulled out of my article that 10% reduction has the greatest success in not redefaulting.
This program looks for 6% minimum so the minimum reduction would still have a high re default rate.
I think a big stickler here is the DTI. In most exotic lending, DTI was mostly ignored or income was inflated. I think most of the people who got stuck with $500k homes and could only afford $200k ones are going to be hard pressed to pass the DTI test.
And let's do a real world test... if mods were so easy to qualify for... can someone show us the numbers of how many have been done and have been successful?
Do you personally believe that a majority of distressed homeowners will qualify for HAMP and be able to successfully maintain their mods? And that these mods will outpace the number of distressed properties that will end up in foreclosure?
I'm not looking for a wrong or right answer... just your opinion.
LOL. So do you think banks would honor a cash for keys arrangement if the previous owner took the appliances/fixures/plumbing/wiring/ placed pigs in the home?
Here is my favorite example of foreclosure rage.
(http://www.kgw.com/news-local/stories/kgw_052607_news_pig_house.12e66bfa.html)
Here is another one:
http://latimesblogs.latimes.com/laland/2008/04/foreclosure-hom.html
Again the point of the program is multi-faceted with one of the objectives being mitigation of the potential for damage/theft.
As for your blog, I didn't say you were looking for referrals, I said you were trying to drum up business. And, I was correct. Whether the revenue is derived through referrals or advertising is irrelevant.
So we can agree to disagree. I guess everyone will qualify and the bank will start writing down principle tomorrow. I bet the percentage of loans being modified is sky high right now.
Banks slow to modify mortgages, Treasury reports
In its first report on the Obama administration's efforts to prod lenders to help as many as 4 million homeowners by reducing their mortgage payments, the Treasury Department said just 9% of eligible loans had been changed.
It's worth noting "changed" means "Extend and Pretend". No bank is meaningfully writing down principal. There have been a couple (like, two) examples of principal writedowns I've seen that totaled less than $10K. That's not meaningful when you've got people with massive neg. equity (upside down 50% from the peak).
How shall we evaluate the success or failure of the modification program?
That's what happens when you live in...
http://www.queensinthekingdom.com/Photos/FantasylandHK.jpg
graphrix_IHB
New member
irvine_home_owner said:
He wants to take over me in being the nastiest person on the internet. He is doing a really... really good job too.
trrenter_IHB
New member
NewportSkipper said:
Because they stopped paying before Jan 1 of 09.
Even if they did they don't want a mod. They are so far upside down at this point they just want to walk away.
Last time I checked the loans that caused a lot of this were zero down. So if Housing prices have gone down 5% then they would owe more then 105% of the loan.
I am not sure but I think RE in the area has gone down a little more then 5%
N
NewportSkipper_IHB
Guest
Here is one example of there being no LTV minimum or maximum:
http://www.acornhousinghelp.org/downloads/resources/Making_Home_Affordable_Plan_Guidelines.pdf
Your friend who stopped paying before January is not disqualified for that reason. What is the real reason? (I see you added the real reason.) Everyone I know thinks the 20%-30% they are down will be regained one day.
I swear, I'm not trying to be testy. You all come off like a pack of jackals! You should hear yourselves!
Edit: the people I know who are down, are still not underwater. These are not 100% financing types.
http://www.acornhousinghelp.org/downloads/resources/Making_Home_Affordable_Plan_Guidelines.pdf
Your friend who stopped paying before January is not disqualified for that reason. What is the real reason? (I see you added the real reason.) Everyone I know thinks the 20%-30% they are down will be regained one day.
I swear, I'm not trying to be testy. You all come off like a pack of jackals! You should hear yourselves!
Edit: the people I know who are down, are still not underwater. These are not 100% financing types.
morekaos_IHB
New member
Thought this was interesting
Postponing the Day of Reckoning
But industry data and anecdotal evidence suggest banks and servicers have been dragging out the process-not rushing to kick people out of their homes.
Granted, the deferrals may not be motivated by compassion, or even political pressure. Rather, banks and mortgage investors want to avoid repossessing hundreds of thousands of homes, which would produce losses and hits to capital.
"The goal is to hold off on foreclosures and take losses as slowly as possible to keep balance sheets up," said Deborah Voelz, the chief financial officer of National Asset Direct Inc., a New York buyer and servicer of distressed loans. "Everyone is looking at what the ultimate loss is going to be and whether it makes sense to hold off another year or two and mitigate the results."
Postponing the Day of Reckoning
But industry data and anecdotal evidence suggest banks and servicers have been dragging out the process-not rushing to kick people out of their homes.
Granted, the deferrals may not be motivated by compassion, or even political pressure. Rather, banks and mortgage investors want to avoid repossessing hundreds of thousands of homes, which would produce losses and hits to capital.
"The goal is to hold off on foreclosures and take losses as slowly as possible to keep balance sheets up," said Deborah Voelz, the chief financial officer of National Asset Direct Inc., a New York buyer and servicer of distressed loans. "Everyone is looking at what the ultimate loss is going to be and whether it makes sense to hold off another year or two and mitigate the results."
N
NewportSkipper_IHB
Guest
Postpone or mitigate? That is the $64,000 question.
trrenter_IHB
New member
NewportSkipper said:
You are right I misread that one I thought the loan needed to be current at that point. It needed to be made before that.
The point still stands though not a lot of people will qualify for a loan mod in CA. We are not talking subprime here on the next wave. Many of the next in line will be over the 729k.
The other sticking point is if Forebearance is used it isn't forgiven. Look at page 9 in your link.
The other thing that sticks out at me is you pulled out of my article that 10% reduction has the greatest success in not redefaulting.
This program looks for 6% minimum so the minimum reduction would still have a high re default rate.
N
NewportSkipper_IHB
Guest
"To qualify for servicer Pay for Success payments and borrower Pay for Performance Success Payments, the modification must reduce the monthly payment by a minimum of 6 %."
All this says is that the servicer may be eligible for a bonus on loans meeting a 6% or greater reduction in payments. It says nothing about the expected payment adjustments. If people start at 50% debt to income ratio and are taken to 31% (or even 38%), that is a large reduction in payment.
You state that few will qualify, but I could not possibly disagree with you more than I do.
Like I said: there are programs for jumbos too.
All this says is that the servicer may be eligible for a bonus on loans meeting a 6% or greater reduction in payments. It says nothing about the expected payment adjustments. If people start at 50% debt to income ratio and are taken to 31% (or even 38%), that is a large reduction in payment.
You state that few will qualify, but I could not possibly disagree with you more than I do.
Like I said: there are programs for jumbos too.
irvine_home_owner_IHB
New member
Thanks for this link. Although disregarding LTV is risky on the lender's part (part of how we got into this mess in the first place).NewportSkipper said:
I think a big stickler here is the DTI. In most exotic lending, DTI was mostly ignored or income was inflated. I think most of the people who got stuck with $500k homes and could only afford $200k ones are going to be hard pressed to pass the DTI test.
And let's do a real world test... if mods were so easy to qualify for... can someone show us the numbers of how many have been done and have been successful?
I'm not understanding where we are coming off like a pack of jackals. We are merely pointing out the flaws in the system and some people's opinions of how the system works.
Do you personally believe that a majority of distressed homeowners will qualify for HAMP and be able to successfully maintain their mods? And that these mods will outpace the number of distressed properties that will end up in foreclosure?
I'm not looking for a wrong or right answer... just your opinion.
RobertLarsen_IHB
New member
irvine_home_owner said:
CapitalismWorks_IHB
New member
RobertLarsen said:
LOL. So do you think banks would honor a cash for keys arrangement if the previous owner took the appliances/fixures/plumbing/wiring/ placed pigs in the home?
Here is my favorite example of foreclosure rage.
(http://www.kgw.com/news-local/stories/kgw_052607_news_pig_house.12e66bfa.html)
Here is another one:
http://latimesblogs.latimes.com/laland/2008/04/foreclosure-hom.html
Again the point of the program is multi-faceted with one of the objectives being mitigation of the potential for damage/theft.
As for your blog, I didn't say you were looking for referrals, I said you were trying to drum up business. And, I was correct. Whether the revenue is derived through referrals or advertising is irrelevant.
trrenter_IHB
New member
NewportSkipper said:
So we can agree to disagree. I guess everyone will qualify and the bank will start writing down principle tomorrow. I bet the percentage of loans being modified is sky high right now.
Banks slow to modify mortgages, Treasury reports
In its first report on the Obama administration's efforts to prod lenders to help as many as 4 million homeowners by reducing their mortgage payments, the Treasury Department said just 9% of eligible loans had been changed.
N
NewportSkipper_IHB
Guest
"Thanks for this link. Although disregarding LTV is risky on the lender’s part (part of how we got into this mess in the first place)."
You're welcome. The lenders already hold these loans. They would be making them less risky.
"I think a big stickler here is the DTI. In most exotic lending, DTI was mostly ignored or income was inflated. I think most of the people who got stuck with $500k homes and could only afford $200k ones are going to be hard pressed to pass the DTI test."
You don't understand the test. As long as you can cover the new payment, you will qualify. You don't need to prove your old income, you only need to prove that you can afford the payment that is 31% of your gross. It's a self-fulfilling test. What people will not be able to afford 31% of their gross income? It is affordable by its very definition. By this magic, your $500k home is made to look like the $200k home you can afford. Crazy, isn't it?
"And let’s do a real world test… if mods were so easy to qualify for… can someone show us the numbers of how many have been done and have been successful?"
The data are not yet available.
"I’m not understanding where we are coming off like a pack of jackals. We are merely pointing out the flaws in the system and some people’s opinions of how the system works."
Some of you do not behave like jackals.
"Do you personally believe that a majority of distressed homeowners will qualify for HAMP and be able to successfully maintain their mods? And that these mods will outpace the number of distressed properties that will end up in foreclosure?"
I believe many will qualify, but some who are severely underwater will walk away. The market can absorb many of these, just like it has been doing.
You're welcome. The lenders already hold these loans. They would be making them less risky.
"I think a big stickler here is the DTI. In most exotic lending, DTI was mostly ignored or income was inflated. I think most of the people who got stuck with $500k homes and could only afford $200k ones are going to be hard pressed to pass the DTI test."
You don't understand the test. As long as you can cover the new payment, you will qualify. You don't need to prove your old income, you only need to prove that you can afford the payment that is 31% of your gross. It's a self-fulfilling test. What people will not be able to afford 31% of their gross income? It is affordable by its very definition. By this magic, your $500k home is made to look like the $200k home you can afford. Crazy, isn't it?
"And let’s do a real world test… if mods were so easy to qualify for… can someone show us the numbers of how many have been done and have been successful?"
The data are not yet available.
"I’m not understanding where we are coming off like a pack of jackals. We are merely pointing out the flaws in the system and some people’s opinions of how the system works."
Some of you do not behave like jackals.
"Do you personally believe that a majority of distressed homeowners will qualify for HAMP and be able to successfully maintain their mods? And that these mods will outpace the number of distressed properties that will end up in foreclosure?"
I believe many will qualify, but some who are severely underwater will walk away. The market can absorb many of these, just like it has been doing.
no_vaseline_IHB
New member
trrenter said:
It's worth noting "changed" means "Extend and Pretend". No bank is meaningfully writing down principal. There have been a couple (like, two) examples of principal writedowns I've seen that totaled less than $10K. That's not meaningful when you've got people with massive neg. equity (upside down 50% from the peak).
N
NewportSkipper_IHB
Guest
"I guess everyone will qualify and the bank will start writing down principle tomorrow. I bet the percentage of loans being modified is sky high right now."
Typical bear response.
Typical bear response.
CapitalismWorks_IHB
New member
NewportSkipper said:
How shall we evaluate the success or failure of the modification program?
N
NewportSkipper_IHB
Guest
It is a lot easier to climb out of losing 20% of value than 50%. A $500,000 home that loses $250,000 needs to see 100% appreciation. A $500,000 home that loses $100,000 needs to see 25% appreciation.
RobertLarsen_IHB
New member
Oh, so now it's multi-faceted... Before I don't ever recall hearing that...
Here let me recap what started this entire discussion: You said: "1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?"
Common sense tells you that when describing the program, such as Cash for Keys, that you should probably state the primary purpose of the program, which is to get the occupants out. Once again... Cash for KEEEEEYS. How do you expect someone to recognize what you're referring to when you only state a secondary requirement?
Here let me recap what started this entire discussion: You said: "1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?"
Common sense tells you that when describing the program, such as Cash for Keys, that you should probably state the primary purpose of the program, which is to get the occupants out. Once again... Cash for KEEEEEYS. How do you expect someone to recognize what you're referring to when you only state a secondary requirement?
N
NewportSkipper_IHB
Guest
"How shall we evaluate the success or failure of the modification program?"
When enough time has passed.
When enough time has passed.
Geotpf_IHB
New member
Couple things:
1. The banks can do loan mods that don't meet the government's requirements if they feel like it, it's just they don't get the government incentives (cash) if they do.
2. If one is current on your loan, there's a second, related, government program that allows refis up if the balance owed on the first mortgage is less than 125% of the current value of the property.
3. Most importantly, even though "common sense" says few loan mods will succeed-Where are all the REOs? The banks aren't not foreclosing on them for no reason, and once they foreclose, they aren't holding them back en masse. Inventory is still amazingly small.
This is a "time will tell" situation. How this plays out is unknowable. It might end in a flood of foreclosures, or it might not. So far, not is winning.
1. The banks can do loan mods that don't meet the government's requirements if they feel like it, it's just they don't get the government incentives (cash) if they do.
2. If one is current on your loan, there's a second, related, government program that allows refis up if the balance owed on the first mortgage is less than 125% of the current value of the property.
3. Most importantly, even though "common sense" says few loan mods will succeed-Where are all the REOs? The banks aren't not foreclosing on them for no reason, and once they foreclose, they aren't holding them back en masse. Inventory is still amazingly small.
This is a "time will tell" situation. How this plays out is unknowable. It might end in a flood of foreclosures, or it might not. So far, not is winning.