Mortgage Broker with 6 loans wants loan modification -- CNBC

GoIllini_IHB

GoIllini_IHB

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What can I say that hasn't been said here already... He is trying for loan modifications because his rental income doesn't cover his payment after his pay option arm resets.



<a href="http://www.cnbc.com/id/15840232?video=1182586806&play=1">Interview</a>
 
Clearly we are living in a "post-responsible America". It's never my fault. It's everybody else's fault but mine. I can't tell you how often 'Tards will approach me asking for referrals to loan mod companies because "my clients want to get out of a bad loan".... as if someone held a gun to the borrowers head as they signed the promissory note. Puh-leez



My .02c



Remember, Tuesday is Soylent Green Day!
 
[quote author="GoIllini" date=1247625952]What can I say that hasn't been said here already... He is trying for loan modifications because his rental income doesn't cover his payment after his pay option arm resets.



<a href="http://www.cnbc.com/id/15840232?video=1182586806&play=1">Interview</a></blockquote>


This was actually an incredibly terrible interview. Its almost like they told everyone going in what to say, and whoever staged it screwed up.



The interviewer and the other dude are talking about people being foreclosed on, and this dude is talking about loan modifications. Now, granted he probably would eventually choose to walk away... but that's not what he's saying right now... he wants to renegotiate out of his option ARM.



(Not trying to defend the dude... just saying this was pointless junk)



Delroy
 
[quote author="Soylent Green Is People" date=1247627692]Clearly we are living in a "post-responsible America". It's never my fault. It's everybody else's fault but mine. I can't tell you how often 'Tards will approach me asking for referrals to loan mod companies because "my clients want to get out of a bad loan".... as if someone held a gun to the borrowers head as they signed the promissory note. Puh-leez



My .02c



Remember, Tuesday is Soylent Green Day!</blockquote>


Just curious... what do you tell them?
 
To cut to the chase: I shade my true feelings in the response I give.



As we know most Mods are simply postponed foreclosures. The process as it stands now is worthless with such a high return to fail rate. I believe most bad actors in the mortgage biz burped themselves into "modification specialists" and are simply sharks in a different suit. If the underlying loan is a Fannie/Freddie deal I recommend using the Making Home Affordable modification / 125% refi program. Other than that program I do not recommend anything else and suggest their clients contact a lawyer.



The majority of mod candidates (IMHO) fall into strictly limited categories.



1) The truly distressed. Joe and Jane six pack down on their luck due to non-self induced problems. These I try to help.

2) The Serial Refinancer, or I owe to much so therefore I should bail types - don't care about these people...

3) The "second home buyer" who really was an investor - still could care less.

4) The "jones-keeper upper" and their pergraniteel home - ......still not caring.

5) The "mini-Trump" who over bought trying to conquer the world - DIAF!



In my world view, 1 out of 5 are worth the time and effort. Unfortunately in our new bizarro world the people who should not be helped are getting the lions share of assistance.



My .02c



Remember, Tuesday is Soylent Green Day.
 
I don't think they ever said where the guy lived. But the houses shown during the interview look kind of California style. (Whatever that is...) I wanted the inverviewer to ask just three questions:



1) Did you claim to be the owner/occupant on all six loan applications?

2) Did you lie about your income or rental income to qualify for six loans?

3) You bought in 2006. Did you expect prices to go higher forever?



Why on earth would this guy think he qualifies for loan modifications on his investment properties? He is not a distressed homeowner that is in danger of losing the roof over his head. He is an investor that made a bad investment and wants a bail-out.



Back at the second book signing, I met Graphrix and asked him the question, "Were these guys REALLY that stupid?" and Graph said yes. But I think we know different now. They were not stupid. They were crooks, plain and simple.
 
From an advertisement in the Danville Weekly:



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I think this guy might win the giant douchebag of the year trophy. He even lies about how long he has been in the business, more like 4 years, not 6 and half.



In case you are curious and want to be updated what the douchebag says throughout the day, <a href="http://twitter.com/terrygill">he is on Twitter</a>.
 
His best Twitter:



www.smartzip.com is now "live." A great way for us RE junkies to decide what/whr to buy. Only in CA and FL now. All 50 soon. Good luck!





Yes... he's asking for a loan mod because he can't afford his 6 properties... but he's also looking for more properties to buy.
 
I will always remember that Tuesday is Solyent Green Day.



However, I do personally know at least one person who may not have had a gun held to her head, but may as well have. Please don't forget that there really are some very innocent and not well educated people who have been victimized. I could go into more detail, but I think you all know the situation. It's really sad when all you can do is advise someone to walk away but to first get as many months of savings behind them as they can.
 
Tmare,



You are correct. There are people out there who made reasonable mistakes and got caught up with issues beyond their control. They deserve help but in this environment they won't get the level of help they absolutely need. From my daily experience with these situations, I can assure you it is far, far less than 20% of all "cries for help" out there. It's a shame, but there isn't a real solution to help those people without helping the douchebag borrowers at the same time.



Vote me in as your benevolent dictator for life and I'll see what can be done. If only I had that kind of power...the things I could do!



Best wishes,



Soylent Green is People.
 
[quote author="Soylent Green Is People" date=1247708638]Tmare,



You are correct. There are people out there who made reasonable mistakes and got caught up with issues beyond their control. They deserve help but in this environment they won't get the level of help they absolutely need. From my daily experience with these situations, I can assure you it is far, far less than 20% of all "cries for help" out there. It's a shame, but there isn't a real solution to help those people without helping the douchebag borrowers at the same time.



Vote me in as your benevolent dictator for life and I'll see what can be done. If only I had that kind of power...the things I could do!



Best wishes,



Soylent Green is People.</blockquote>


There actually is no way to help someone who bought a house they could never afford, there is no way the people I am talking about could qualify for 1/5 the price of the house they bought and now that it is almost worth 1/5 the price, there is no reason for them to even try.
 
[quote author="25inIrvine" date=1247628343]Only the primary residence is eligible for a loan mod right? Or did they change that?</blockquote>


Depends on the bank and the individual circumstances. If the bank loses less money doing a loan mod then letting it go into foreclosure and selling it as an REO, it doesn't really matter much to them whether or not it's a primary residence or not.
 
The advantage of mortgage mods is that it may avert an unnecessary foreclosure and move. Since the house will cost a lot less under the current and coming saner prices, in many cases the current resident couldn't afford it under crazy bubble prices but could afford it now. With a mortgage mod the current occupant pays a fair price (all anybody else would pay) to stay, and society as a whole is spared the costs of the foreclosure and relocation.



If it's an income property, there's not much point to a mod. The current occupant (the renter) can stay regardless of who the landlord is. Foreclosure costs can be cut to a minimum by requiring the "investor" to mail in the keys to all the rental properties as a condition of getting a mortgage mod on his primary residence. Have him send in the keys and make the lender the landlord.



Another way to look at it is that mortgage mods are a substitute for the traditional and moral way to handle an overstretched borrower with an overpriced asset: cramdowns. Mods are necessary partly because of the Senate's peculiar hangups about cramdowns and partly because the courts couldn't handle bankruptcies on the necessary scale. In a cramdown (almost) all the owner's other assets would end up being in the control of the lender, so that's how it should happen with mods. Mods aren't technically cramdowns, but a lot of thought and experience went into developing traditional bankruptcy standards, so mods should be designed to mimic the bankruptcy outcome as far as is practical.
 
Anything other than a 1st home should not get. He should have to declare BK to get those loans cleared. He can afford the pay-option variant, but wouldn't afford a fixed fully-amortizing version. He is the type of 'owner' I'd like to see banks go after to make full the original loans. His pay-option arm's helped fuel the bubble and he deserve a little singing from that fuel exploding.



With 6 loans, the different banks should get together and sue the guy collectively and split the proceeds based on who had the biggest outstanding balance on the loans.



When I saw the name Terry Gilliam I had to think of Time Bandits!
 
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