Archive for March, 2010

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Mortgage Modifications – Let’s help the GOOD GUYS!

March 28, 2010

 

OregonianLive.com recently reported the following:

Democrats in Congress yesterday declared that President Obama’s HAMP program designed to help people avoid foreclosure had “failed miserably.” And a government watchdog criticized HAMP for “spreading out the foreclosure crisis” over several years by failing to help enough people.
 
A year into the program, which originally aimed to aid 3 to 4 million borrowers, servicers placed only 170,000 trial modifications into permanent status.
 
Meanwhile, a federal report showed that
more than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year.

Politics aside, this does NOT come as a surprise to me. The modification of loan program is a colossal failure and will continue to be so unless the federal government and the banking industry realize that loan modifications should FIRST help those who CAN AFFORD TO PAY.

That’s right – you need to modify the loans of people whose homes are adversely affected by declining values and the current foreclosure crisis. The people who have been paying on time, paying off their mortgages and are not delinquent should be given a chance to benefit from the current economic crisis?

Why?

Because they may be the next victims of the economic tsunami if they are not given a chance to recover some of the lost value of their property. I see it…on a daily basis…the great people of our nation who are tired of the struggle and they are wondering why they don’t catch a break.

The facts don’t lie – at least 50% of the people who have received the modifications (AND THERE ARE VERY FEW FOR THE RECORD – THIS IS A DEBACLE OF EPIC PROPORTIONS) have still defaulted after modification. The current system for loan modifications is not working on so many levels. But at the end of the day, if you can’t make your payments – loan modifications are just buying you a little more time before the foreclosure gavel strikes.

Either way – our government must fix this economic crisis, restore the housing market – and get people working. But most importantly – they need to RESTORE CONSUMER CONFIDENCE to all our citizens and not just those in financial distress. When will the good guys catch a break?

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Foreclosure Stigma Won’t Last

March 9, 2010

In a recent article, Inman News reported that foreclosed borrowers may get loans again. Inman reported that “Banks haven’t been very forthcoming on this issue. However, knowledgeable observers of the situation say that while it may take some time, the situation will right itself for most people.”

I have said it before – you cannot shut out a majority of homeowners who have been making loan payments for years but due to economic crisis and financial downturns have experienced a severe loss of income and ability to pay on their mortgage debts. So many individuals have found themselves in a position that they never believed possible and they are sincerely remorseful.  Foreclosure for these borrowers was quite simply, a method of survival.

When the economy recovers – and it will, these borrowers will be the prime people to consider for new loans. Why? Because they have jobs, have been making timely rental payments and will (if smart) have saved a sufficient amount for a 20% down payment. They will be a good risk next time because they will be smarter about their ability to repay their debt.

I predict the banks will charge repentant borrowers a higher rate of interest (because they can) and because this particular borrower will be so pleased to have a loan that they will be willing to pay a higher interest rate for the opportunity to be a homeowner once again.

As Inman reports “The lender who figures out how to do more of this case-by-case stuff cost-effectively is going to end up ahead of the pack,” Riegler says.

You simply cannot pass up on this (formerly foreclosed) borrower of the future – there are simply TOO MANY of them and they will need a loan and a place to live. They are going to be the buyers of tomorrow. The dream of homeownership lives on…

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Top 10 WORST Internet Passwords

March 7, 2010

This has very little to do with real estate but since I am devoted to social marketing – I think it is an important topic. I’m surprised anyone would use these but then again, maybe not…

Top 10 Worst Passwords
The following is a list of the most predictable passwords, and should not be used under any circumstances (Source: pcworld.com):

  1. 123456
  2. 12345
  3. 123456789
  4. Password
  5. iloveyou
  6. princess
  7. rockyou
  8. 1234567
  9. 12345678
  10. abc123