According to Treasury Department data release Friday, March 12, nearly 90,000 “distressed borrowers” will be losing their mortgage aid under the government’s foreclosure prevention plans, and many more currently paying modified, lower payments on their loans will lose those modifications despite the fact that they are up to date.

While some of these losses are due to a failure to prove that they were qualified for this help in the first place, many other participants are losing their current modifications due to earning too much or too little since they started the process. Even more intriguing: some of them are actually saving money for retirement, and that can mean you’re out because your savings may hit the roof on the lack of money that allows you to qualify for loan modification long before you reach the point where you can afford your original payments.

Regardless of whether or not you approve of these aid programs, it seems like a pretty hard road for people who dealt with all the paperwork and got a loan modification (regardless of whether or not they were as close to foreclosure as they feared they were) and then made the payments on time and kept their end of the bargain. However, it has led to an interesting development: private mortgage modification aid.

Wells-Fargo, for example, has initiated a number of other mortgage-relief efforts that it handles on its own rather than via federal regulations and mandates. Many of that lenders’ borrowers are currently attempting to exit federal programs and enter the private ones – at least once you’re in there, it seems like you have a shot at getting a cut-and-dried answer on whether or not you’re keeping your home and your payments.

Any time you see private enterprise taking over where the government programs have failed, there seems to be great opportunity and great peril. I think it’s great that Wells-Fargo is taking matters into its own hands and its borrowers – in default and otherwise – into consideration under a series of requirements that the bank has determined are viable for its survival. However, warns one representative of a mortgage-lender alliance that is also trying to establish private aid options for borrowers, “you will see those [foreclosures] as well.” And all too often these days foreclosures equal photo opportunities for federal programs, so I wish Wells-Fargo well.

Your thoughts are welcomed in the comments area below.

Thank you for reading http://realestate.BryanEllis.com!

For the eighth straight consecutive month, national foreclosure activity in the U.S. was dominated by a small set of states.

As reported by RealtyTrac.com, more than half of October's foreclosure-related activity came from just 4 states:

1. California
2. Florida
3. Illinois
4. Michigan

The remaining Top 10 states in terms of total foreclosure activity included Arizona, Georgia, Texas, Ohio, New Jersey, and Maryland.

Foreclosures are up 19 percent from last October, but a deeper look at the RealtyTrac report revealed two positive developments for the housing market.

1. Foreclosure activity is down 3 percent from last month
2. Foreclosures per Household decreased in 9 of the 10 most heavily concentrated states

Furthermore, Nevada's foreclosure pace is down 4% from last year. This is a big deal because Nevada has long led the nation in foreclosure-related activity. Until last month, Nevada's year-to-year foreclosure rate hadn't fallen in more than 4 years.

It's too soon to say that the foreclosure market is drying up, but bargains are getting harder to come by. First-time buyers and bona fide investors alike have been snapping up property at a furious pace.

According to an industry trade group, distressed homes account for nearly one-third of home resale activity.

That said, buying foreclosures isn't for everyone.

For one, properties are often sold as-is and may be defective. The cost of repairs may negate "the deal" or "the steal" -- depending on the cost of the home.

Secondly, closing on a foreclosed home can be a 3-month long process. This is because banks rarely process home sale paperwork as fast as a "person" would. A 3-month timeframe may not fit your schedule.

In the end, fundamentally, buying a foreclosed home is the same as buying a "regular" home -- there's a contract and a closing. Most of the steps in the middle, however, are different.

Read the complete foreclosure report and take a peek at the foreclosure heat maps on the RealtyTrac website. If you like what you see, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market, but based on October's data, they may not last through the winter.

For the eighth straight consecutive month, national foreclosure activity in the U.S. was dominated by a small set of states.

As reported by RealtyTrac.com, more than half of October's foreclosure-related activity came from just 4 states:

1. California
2. Florida
3. Illinois
4. Michigan

The remaining Top 10 states in terms of total foreclosure activity included Arizona, Georgia, Texas, Ohio, New Jersey, and Maryland.

Foreclosures are up 19 percent from last October, but a deeper look at the RealtyTrac report revealed two positive developments for the housing market.

1. Foreclosure activity is down 3 percent from last month
2. Foreclosures per Household decreased in 9 of the 10 most heavily concentrated states

Furthermore, Nevada's foreclosure pace is down 4% from last year. This is a big deal because Nevada has long led the nation in foreclosure-related activity. Until last month, Nevada's year-to-year foreclosure rate hadn't fallen in more than 4 years.

It's too soon to say that the foreclosure market is drying up, but bargains are getting harder to come by. First-time buyers and bona fide investors alike have been snapping up property at a furious pace.

According to an industry trade group, distressed homes account for nearly one-third of home resale activity.

That said, buying foreclosures isn't for everyone.

For one, properties are often sold as-is and may be defective. The cost of repairs may negate "the deal" or "the steal" -- depending on the cost of the home.

Secondly, closing on a foreclosed home can be a 3-month long process. This is because banks rarely process home sale paperwork as fast as a "person" would. A 3-month timeframe may not fit your schedule.

In the end, fundamentally, buying a foreclosed home is the same as buying a "regular" home -- there's a contract and a closing. Most of the steps in the middle, however, are different.

Read the complete foreclosure report and take a peek at the foreclosure heat maps on the RealtyTrac website. If you like what you see, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market, but based on October's data, they may not last through the winter.

As downpayment requirements increase, anecdotally, home buyers are tapping 401(k) plans for extra cash.

Classified as a "hardship withdrawal", loans against your retirement funds can be cheap and simple.

1. There's no credit check or approval process
2. There's only a small set of paperwork
3. Money can be available in as little as a day

But just because you can get access to your retirement money doesn't mean that you should. 401(k) withdrawals should only be made after careful consideration.

There are some serious negatives, specifically with respect to taxation.

If you open a 401(k) loan and don't repay according to the loan terms, the withdrawal ends up getting taxed as income, plus a 10 percent penalty for people under 59 1/2.

That's a stiff penalty.

But, even if you do repay the loan on time, you're still getting leaving yourself subject to double-taxation.

• Taxation #1 occurs when the loan is repaid using post-tax dollars
• Taxation #2 occurs upon final withdrawal at retirement

Furthermore, when you borrow against a 401(k), you assume the opportunity costs of having that money out of the market. Since March, the Dow Jones Industrial Average is up 44 percent. If your 401(k) was empty, you'd have missed those gains forever.

Taking a loan against a 401(k) isn't necessarily a bad idea, there just may be better choices. If you're planning to withdraw from your 401(k) to make a downpayment on a home, talk with a qualified financial professional first.

You can never have too much good information.

In his latest demonstration of fiscal idiocy, Barack Obama has proposed an irresponsible new policy with utterly ridiculous and immature features.  I’ll give you three examples of the sheer stupidity of his new proposals, but first I want you to be clear on a few terms:

Borrower - this is a person who has taken out a mortgage loan

Investor - this is a person or company whose money was used to fund a borrower’s loan

Loan Servicer - this is a company that collects payments and interacts with borrowers on behalf of investors

Note that loan servicers don’t really have “skin in the game” - they’re simply a paperwork processing service.

So here are 3 examples of Obama’s latest stupid policy proposals:

• Bribe Loan Servicers to execute mortgage modifications by giving them $1,000 per modification
• Bribe Loan Servicers even more by giving them an additional $1,000 per year for up to 3 years if the Borrower stays current
• Bribe Borrowers to unnecessarily modify mortgages by giving them $1,500 if they have their mortgage modified before they are in default!!!!!!

This is SHEER STUPIDITY, my friends.  Obama is proving how much of an economic and intellectual lightweight he is each time he opens his mouth.

In typical socialist fashion, Obama is disregarding the rights of private property owners (mortgages are private property owned by investors) by bribing loan servicers to modify mortgages that they don’t own.  Remember - Loan Servicers do not own the loans they service, they merely manage the interactions with the Borrower.

This will cause an avalanche of lawsuits as Investors choose to defend their rights against the increasingly tyrannical policies of the government of the United States of America.

But the real kicker is Obama’s attempt to bribe Loan Servicers into executing mortgage modifications for loans that are not even in default! Yes, that’s right:  Obama wants to steal money from you - in the form of higher taxes which he’s already committed to raising - and use that money to give your neighbors (many of whom never actually genuinely qualified for their loans to begin with) a lower mortgage payment.

Let me reiterate:  Obama wants to lower mortgage payments for people who aren’t even in default.  Your money will pay the mortgages of your neighbors who are not facing financial difficulty.

This is disgusting.  It is utterly irresponsible, and demonstrates that Obama is an extreme socialist, moving this country as quickly towards Marxist principles as he can.

It’s time to fight back.  Call your congressman and senators.  Call the White House.  Tell them you’re sick of this garbage.  It’s astounding that the United States has survived and thrived economically since the late 1700’s, and has been able to effectively recover from each major (and normal) economic downturn without the federal government’s massive involvement, but then politicians like FDR, Carter, Clinton, Bush and Obama decide that the economy can’t do what it has always done, and heal itself.

The arrogance is palpable, and so is the idiocy.  Obama, you’re a fool.

As always, your comments are welcomed here at RealEstate.BryanEllis.com.