OfflineA large number of borrowers who were hoping for some help from the states’ attorneys general settlement with the five largest mortgage lenders are holding an empty bag. The $26 billion settlement is expected to help only around 1 million troubled homeowners, far from the 11+ million with underwater home loans.
Proponents of the settlement deal state that around 1 million homeowners will have their mortgage balances lowered and another 750,000 would be able to refinance with lower interest rates. With 3.5 million homeowners having lost their homes over the last four years, and another 11 million underwater on their loans, many consider this settlement far too little far too late.
One reason many will not receive any help is that only those with loans still held by the five lenders in the settlement will receive relief. Those with Fannie Mae, Freddie Mac and the FHA are not eligible, and that’s half the market.
The main example in the article at money.cnn.com is a couple with a home about 50% underwater, worth about half what they owe on their mortgage. Their loan changed hands several times, going through Wells Fargo, IndyMac and then Fannie Mae.
One example of settlement actions is Bank of America’s intent to slash mortgage balances by $100,000 or more for roughly 200,000 homeowners. The goal they say is to bring those loans to 100% of the current value of the mortgage. The other four lenders in the settlement are expected to bring loan balances to 115% to 125% of current values. Those lenders are:
• CitiBank
• Wells Fargo
• JP Morgan Chase
• Ally Financial
Other homeowners will just have to continue to struggle and hope that this settlement will help to turn around the market and bring their home values up in the process.
On top of that they are getting paid to process the foreclosures and they string you along making you think they are processing your HAMP package etc. They take their time until such point as to evict the homeowner and then they are leasing the home as a rental or selling it. I just heard on the news last night that B of A is working on a deal where they will lease the home to the homeowner for up to 3 years if the homeowner does a deed in lieu back to the bank. That allows the homeowner to stay up to 3 years more in the home they love. I would be willing to bet that they will charge the highest rental price possible even though the news media reported yesterday that the banks would charge market rental rates.
I for one am just plain fed up and I believe the American public needs to go back to doing a deal on a handshake and keep government out of our business. This of course would require complete honesty, commitment and integrity. I can dream can't I.
the banks are sooooo greedy! yes, they will lease the properties back to the homeowners, "IF" they can show that they have enough income to pay the rent they intend to charge them; and at the end of the third year, they will sell it back to the homeowner, "IF" they can qualify for a loan; and the bank will set the price of the property. In the meantime, the homeowner, I mean 'tenant' will take care of the property, so that the bank doesn't have to pay for maintenance and deal with a 'foreclosed' property, and on top of it, they will still get money from the tenants every month... BRILLIANT IDEA!!! for the BANKS!!! whoever thought of this, probably got another great bonus!
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Think about it. We are investors always researching and learning about real estate and changes made. Lots we do not know, so how does the average everyday person know what their rights are as fast as things change? A lot of people working at these banks can not even keep up with the process? I think a lot of people are needlessly loosing their homes which only makes the economic conditions worse.
How does a person know who or where to turn to? There is a saying that there is a rotten apple in every barrel. This is true with all groups of people - banks, lawyers, even some RE flippers who get greedy, etc.
I am just trying to look at the whole big picture.
Couldn't agree more!