While 23 states have already initiated foreclosure moratoria and launched probes into the foreclosure process in the cases of all lenders in those states, 17 more have expressed interest in joining the probe thanks to the coordinated efforts of state attorneys general across the country. In Indiana, for example, AG Greg Zoeller, chairman of the Consumer Protection Committee of the National Association of Attorneys General, is working with Iowa AG Tom Miller to expand the probe into Indiana, even though it is a judicial foreclosure state and, therefore, was already part of the first wave of moratoria that swept across the country last week[1]. 17 additional non-judicial foreclosure states are “interested” in joining the probe and their AGs are working to join.
With mid-term elections around the corner and everyone’s motives in play – and in doubt – investors are simply pleading for legislators and law enforcement everywhere to consider what they are doing rather than getting swept away in the foreclosure freeze “craze” that is sweeping across the country. According to statements by Tim Ryan, president of the Securities Industry and Financial Markets Association (the biggest lobby on Wall Street), “a complete halt would be catastrophic for the U.S. economy and hurt home sales.”
Already, in Indiana, agents are reporting “houses with multiple offers but no response from banks” as the lenders struggle to deal with the moratoria – some self-imposed – and continue to sell REO property when possible. We do have a lot of houses for sale after foreclosure,” adds IN real estate agent Laura Musall, “and we have people who want to buy them.”
However, for the time being, those houses are going to “sit empty…deteriorate [while] the values go down” and buyers who cannot afford to wait forever on the lenders to approve the offer move on to more fruitful investment opportunities.
[1]http://www.indystar.com/article/20101012/BUSINESS04/10120319/1279/BUSINESS04/Indiana-to-join-multistate-foreclosure-probe
SO “WHATS THE BIG DEAL” REALLY? IT SEEMS THE BANKS et al HAVE ALREADY APPLIED THEIR OWN “MOTRATORIUM” (UN-OFFICIALLY, OF COURSE) VIA SUCH WELL PUBLICIZED PRACTICES FOR “NON-DISCLOSURE OF ACTUAL NUMBERS” ON ANY OF THEIR SO CALLED “SHADOW-INVENTORIES”…AND ALSO BY “NOT-QUANTIFYING” THEIR “NON-FORECLOSURE” PROPERTIES HELD FAR BEYOND ANY KIND OF “CONVENTIONAL-DEFAULT” TIME-FRAMES etc. THEREFORE, DO NOT SUCH METHODS SERVE TO EFFECTIVELY “SHORE-UP-PRICES” WHILE SIMULTANEOUSLY HELPING TO “EQUALIZE-DEMAND”…IN A MUCH MORE “CONTROLLED-WAY”…BY LEVERAGING-OUTCOME IN VARIOUS LOCAL MARKETS, THE CONSEQUENCE OF WHICH IS YET TO BE DETERMINED. WHETHER SUCH “SUSPENSION” OF MARKET-FORCES…BY MANIPULATION, MORITORIUM OR OTHER MEANS OF HUMAN-INTERVENTION…PROOVES WORTHY OR NOT SHALL SURELY BE FELT BY US ALL, IN DUE TIME.
Thanks for the updates.
Somehow, MAJORITY OF loans were option arms structured to double in payments whether by default or on purpose, very quickly when the value declined as rapidly as the banks were shutting down from 2006, followed by rapid job losses across the board. While values declined rapidly, these option principals increased doubling interest rate/payment when reset automatically at 105 or 115% value. Such loans were approved based on stated or no income and now they want the mountain of paperwork to prove income without reducing the increased principal balances which already skyrocketed when reset and adding huge penalties, forced insurance and advance paid taxes by lenders or servicers to make matters worse thereby adding the new created impound payments on top of the already doubled required interest/payments ending with upside down value.
The main cause of why most could not afford their house payments anymore whether upside down or not was when rates/payments doubled when option principal reset?
How many can get approved for loan modification if income now has to be verified to qualify for inflated principal balances created by servicers or lenders? who are very quick to tag on penalties and fees to feed their greed?
It is common the servicers tend to add late fees even if payments could have been received within a few days i.e. when they send statements, it is proven on stamped dates, it takes only a few days, but when they receive payments, it usually will take much longer to input payments to justify collecting additional late fees usually by one day?
Makes more sense to approve more loan mods by reducing the principal balances as some have done(waiving fees,if necessary, etc), and fix option arm interest to current fixed rate so more homeowners can resume paying affordable mortgages again. Lenders/investors and servicers can resume doing what they do best in their respective business and the economy will return to normal faster. Most homeowners worked hard to earn their home and want to keep it and do the right thing by paying their mortgage again but lenders/servicers will not accept partial payments and insist on only the required doubled increased payments causing this mess and more are likely to just walk away.
Until few years ago, banks structured option arm, subprime loans, approved them without verifying income and collected their payments many times over using other people’s money and packaged as securities. So they can now restructure loans to help homeowners stay and resume making affordable payments without the hassle of meaningless, time-consuming paperwork that require more manpower to manage. They can save themselves from losing more money with floods of foreclosures.
As long as the homeowners can afford the restructured affordable payment with current income, why waste so much time with past history income and unnecessary useless paperwork, etc. to only decline majority homeowners from loan mod by lying that paperwork were never received over and over again as an excuse to foreclose without warning or prior notice in most cases while pretending to workout. Afterall, most loans were originally approved without verifying income when original loan amounts were much lower so how could they expect homeowners to prove income now for the new ballooned principal even before adding all the penalties?
Would it not simplify the loan mod process speedily at current interest fixed rate to resume collecting payments for investors again without losing more time and money all around.
The best outcome will be a win-win happy situation for families to get affordable fixed interest/payment and investors including servicers to resume collecting payments to gain rather than foreclosing creating great loss for everyone.
By helping homeowners, they also help themselves.
Thank you for articles.