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Making the short sale work; servicers are struggling to reduce loss severity as they get troubled loans out of the portfolio. New solutions for short sales … An article from: Mortgage Banking
Making the short understanding work; servicers are struggling to reduce loss severity as they get troubled loans out of the portfolio. New solutions for short income … An article from: Mortgage Banking
This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of USA on March 1, 2010. The length of the article is 2509 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is acquirable immediately after purchase. You can view it with any web browser.
Citation Details
Title: Making the short understanding work; servicers are struggling to reduce loss severity as they get troubled loans out of the portfolio. New solutions for short income are emerging that hold real promise.(Feature)
Author: Rick Grant
Publication: Mortgage Banking (Magazine/Journal)
Date: March 1, 2010
Publisher: Mortgage Bankers Association of America
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Duration : 0:1:7
I Survived Real Estate 2008 – Part 16
I Survived Real Estate 2008 picks up with the panel interview from the last session where Bruce Norris speaks about how Wall Street keeps calling to find out when bottom is so they can profit even though they are part of the reason were in this current situation.
Rick Sharga speaks about massive pools of money purchasing these loans at deep discounts and then fixing the principles of the people in the homes.
Bruce then responds by speaking about HR3221 about how HUD can purchase first trust deeds at a discount and how the new structure would grant them to modify the loan of the mortal in the property. Bruce worries about the ramifications of this program. It is limited in who can apply since it applies to adjustable mortgages only. The people who really get burned are those next door who eligible for a fixed loan and are making the payments. They did everything correctly but they dont apply for the principle reduction. With California being a non recourse state, Bruce worries the dominos that might fall. Bruce then asks Philip Tirone if bailing from mortgages is becoming more acceptable.
Philip states clients dont care about the moral issue of travel away; they are more concerned about the credit ramification. Philip speaks about the raised loan limits and how everyone thought it would make a difference. They think things are going to help but when you get into the legislation, it doesnt.
Bruce concurs with Christopher Thornberg in that the median price has to become more reasonable. Christopher thinks another 6 months and everyone will qualify.
Tommy Williams brings up the very important point of moral hazard in letting something like bailouts occur. Not holding consumers accountable sets up a larger problem for the future.
Bruce asks Christopher about Merrill Lynch taking .22 cents on the dollar for a $30 billion package of CDOs. He states they actually got 5% in cash and carried back a note and guaranteed the pile. Bruce asks whose money was actually lost. Christopher states it was the consumer investing in their company. Christopher states this buyout is another instrument and bookkeeping mechanism. The financial system, Christopher says, is an absolute mess. All banks are having a difficult time. Were having an issue with cash because of it. [Part 17 Continues the panel discussion]
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Taxes on Short Sale, Loan Modification & Mortgage Foreclosure 6 Nov08 Recourse vs Non-Recourse
Tax on 1099C, Cancellation of Debt Income; Short Sale, Loan Modification & Foreclosure. Exception; Mortgage Forgiveness Debt Relief Act, Bankruptcy & Insolvency. Go To http://RealEstateMarketingThisWeek.com
Part 6 (Excerpts)
Arizona is not a recourse state, so chances are you will not owe 1099 C Income
In Arizona, typically its not a recourse state, so if they are telling you that theyre going to garnish your consequence because you didnt pay back your entire mortgage, there is a local bank ,that was threatening a very good colleague of ours about a small second mortgage that mortal had taken out. Threatening to send it to collections and garnish her wages. It simply isn’t going to happen.
But nevertheless, there is still the tax implications that apply, if you need to navigate through this maze. There is a lot to it, you need to protect yourself. You talked about bankruptcy is one of those exclusions, right? One of the problems with bankruptcy is people dont comprehend the bankruptcy laws. They are so tight now and your feet are really held to the fire from the federal government right now. It’s not like you just didn’t make your mortgage payment, so you go file bankruptcy, it’s just not realistic. Assuming bankruptcy is the last resort option for everybody. And we certainly want to refrain that, it would not be sound financial advice from any credible source that I can think of.
Let’s achievement through a case scenario, somebody who is listening to this broadcast, their head is spinning right now, they’re thinking, oh my gosh. I should have known about the tax implications, a short understanding versus loan modification. Let’s begin at the top and work through a swift scenario. And then we’ll point out the specifics of what they should be considering right now.
For example, we speak about this all the time and to your credit Michael Barnes and to Velocity Financials credit, you were primeval in bringing out the loan modification for people who were in a distress situation regarding a mortgage, maintaining or keeping up with the mortgage payment. So you started going down the path where the refinance started to become a much more difficult option, with new constraints and all the other factors that led to part of this economic crisis, a loan modification has become a buzz topic today. Driving to the station today, driving down Camelback Road, I see a sign on the corner. You know, one of those stick in the ground, homemade jobs, that states don’t refi a Loan, modify, with some success rate and the phone number.
Hang on there I want you to say the success rate. The sign literally said, 99% success rate, and it goes back to the point that you prefabricated when they say that they can reduce your mortgage principal by tens of thousands, hundreds of thousands of dollars, thats the absolute last resort for any lending institution. Thats not what this is about, so let’s begin with that, then we will work on the tax ramifications of how that might work in the overall financial strategy.
I am familiar with the loan modification industry here in Arizona. There is no regulation, unfortunately. We at Velocity Financial work with a national network of attorneys, so if you’re the guy in El Centro California, or youre in Phoenix, or youre in Alaska it doesn’t matter where you’re at. We have someone who is an expert in that field in that say because the laws are different. But without the regulations some mortal with the unsightly yellow sign on the side of the road states he has a 99% success rate, I don’t believe him it’s probably not using an attorney, who knows, dont purchase into that garbage. Were going to tell you the truth, if we cant do a loan modification, we will tell you that we cant do it. And if a loan modification is not the ideal thing for you, you can find the some of these other options.
Duration : 0:5:19
First Time Home Buyer Tax Credit, FHA Loans, Low Mortgage Interest Rate Program
Tax Credit for First Time Home Buyer Program, with Low Down Payment and Interest Rates thru Government Loan Assistance and FHA Mortgage. Purchase Cheap Bank Foreclosures. Go To http://RealEstateMarketingThisWeek.com
Part 7 (Excerpt)
FHA Guidelines regarding foreclosures and first time home buyers; astounding home buying value
Ok I was just checking because I thought this was a story about all the mortgage backed securities that were going under. It started at the top and it worked its way down. The reality of it is that people were buying homes, not reading what they were signing, not understanding how it worked and shame on the people who were putting it in front of them, knowing that they didnt know and we all need to take a tiny responsibility here for this past crisis. It is not just the Wall Street firms; its not just the mortgage companies and banks, the brokers have tiny in fact to do with it, we didnt create the loan products that people were buying, we were merely disseminating it to the public. I am glad to state I was not a part of any of that. I was healthy to stay away and do traditional, conventional type financing for people. So luckily I didnt have a lot of clients who got stuck into that nightmare.
Speaking of that nightmare, Dan when we speak about the people who have had foreclosures, their lives have been turned around, turned over and they think that there is no where for them to go. One of the nice things about the Federal Housing Administration loan, the FHA loan, thats the first time home buyer type loan, the minimum down payment loan, its only 3 years after you have had a foreclosure that you can remember to purchase a home again. So it is important if you have had a foreclosure, you need to point your future away from the flame, you need to save your money, do your best, work as tightly as you can on a budget and look forward to that time when you can go back out and purchase a home again.
Property values are going to be up from where they are today, but there is still going to be plenty of great value out there and there are not going to be loan products that are going to get you in trouble again. They wont exist. What really caused the great inflation in home values starting in about 2002 was the financing was just getting crazy. I wont get into a whole lot of technical stuff about mortgage backed securities and all that, but the lenders were creating products, selling them off their books, thinking that they would never have to worry about them again. They sold trillions of dollars worth of these loans and those are the ones that are going bad.
Ones that were toxic in the first place: the said incomes, the option ARMs, all those loans are all gone now. I was saying early this day that we are back to where we were in financing in 1992-1993, back when the median home price was $75,000. Now I dont think we are going to go anywhere near that again, I think at $130,000 we are getting real close to the bottom of the market and what I was thinking was when I got into the business in 1995 and you were in at about the same time I was, and I remember speaking to a guy who comes into our office to sell us loan programs, now this is the very beginning of the really crazy stuff, and he was saying we can do 70% no doc loans.
We go, what do you mean? If somebody puts down 30% they dont have to verify anything, they dont have to verify their employment; they dont have to verify taxes, anything. We were totally floored, but by the peak of the market we were doing 100% no doc loans. If you were breathing they gave you a loan and the credit scores didnt have to be that high, I think I saw them as low as 600…
Duration : 0:5:36