The cure is lower prices

Continued

The government has pressured mortgage companies to move faster. Still, it argues that trial modifications are themselves a considerable help.

“Almost three-quarters of a million Americans now are benefiting from modification programs that reduce their monthly payments dramatically, on average $550 a month,” Treasury Secretary Timothy F. Geithner said last month at a hearing before the Congressional Oversight Panel. “That is a meaningful amount of support.”

But mortgage experts and lawyers who represent borrowers facing foreclosure argue that recipients of trial loan modifications often wind up worse off.

In Lakeland, Fla., Jaimie S. Smith, 29, called her mortgage company, then Washington Mutual, in October 2008, when she realized she would get a smaller bonus from her employer, a furniture company, threatening her ability to continue the $1,250 monthly mortgage payments on her three-bedroom house.

In April, Chase, which had taken over Washington Mutual, lowered her payment to $1,033.62 in a trial that was supposed to last three months.

Ms. Smith made all three payments on time and submitted required documents, Chase confirms.She called the bank almost weekly to inquire about a permanent loan modification.

Each time, she says, Chase told her to continue making trial payments and await word on a permanent modification. Then, in October, a startling legal notice arrived in the mail: Chase had foreclosed on her house and sold it at auction for $100.

The purchaser? Chase.

“I cried,” she said.“I was hysterical. I bawled my eyes out.”

Later that week came another letter from Chase: “Congratulations on qualifying for a Making Home Affordable loan modification!”

When Ms. Smith frantically called the bank to try to overturn the sale, she was told that the house was no longer hers. Chase would not tell her how long she could remain there, she says.

She feared the sheriff would show up at her door with eviction papers, or that she would return home to find her belongings piled on the curb. So Ms. Smith anxiously set about looking for a new place to live.

She had been planning to continue an online graduate school program in supply chain management, and she had about $4,000 in borrowed funds to pay tuition.

She scrapped her studies and used the money to pay the security deposit and first month’s rent on an apartment.

Later, she hired a lawyer, who is seeking compensation from Chase. A judge later vacated the sale.

Chase is still offering to make her loan modification permanent, but Ms. Smith has already moved out and is conflicted about what to do.

“I could have just walked away,” said Ms. Smith. “If they had said, ‘We can’t work with you,’ I’d have said: ‘What are my options? Short sale?’ None of this would have happened. God knows, I never would have wanted to go through this. I’d still be in grad school. I would not have paid all that money to them. I could have saved that money.”

A Chase spokeswoman, Christine Holevas, confirmed that the bank mistakenly foreclosed on Ms. Smith’s house and sold it at the same time it was extending the loan modification offer.

“There was a systems glitch,” Ms. Holevas said. “We are sorry that an error happened. We’re trying very hard to do what we can to keep folks in their homes. We are dealing with many, many individuals.”

 

Continued

Many borrowers complain they were told by mortgage companies their credit would not be damaged by accepting a loan modification, only to discover otherwise.

In a telephone conference with reporters, Jack Schakett, Bank of America’s credit loss mitigation executive, confirmed that even borrowers who were current before agreeing to loan modifications and who then made timely payments were reported to credit rating agencies as making only partial payments.

The biggest source of concern remains the growing numbers of underwater borrowers now about one-third of all American homeowners with mortgages, according to Economy.com.

The Obama administration clearly grasped the threat as it created its program, yet opted not to focus on writing down loan balances.

“This is a conscious choice we made, not to start with principal reduction,” Mr. Geithner told the Congressional Oversight Panel. “We thought it would be dramatically more expensive for the American taxpayer, harder to justify, create much greater risk of unfairness.”

Mr. Geithner’s explanation did not satisfy the panel’s chairwoman, Elizabeth Warren.

“Are we creating a program in which we’re talking about potentially spending $75 billion to try to modify people into mortgages that will reduce the number of foreclosures in the short term, but just kick the can down the road,” she asked, raising the prospect “that we’ll be looking at an economy with elevated mortgage foreclosures not just for a year or two, but for many years. How do you deal with that problem, Mr. Secretary,”

A good question, Mr. Geithner conceded.

“What to do about it,” he said. “That’s a hard thing.”

 

Being cash flow positive only because you're putting 66% up as a down payment is nothing to brag about. I'm sure you could be cash flow positive in dozens of business ventures if there were little or no debt. That doesn't make them great businesses worthy of your capital though.

 

Bull shit. She had to have been personally served with the foreclosure action, and even if she had filed no response and had been defaulted, by law, she still would have received a copy of the order of the court scheduling the foreclosure sale, which by then is months if not years after the suit is filed. In Florida, you don't just wake up one day and find out your home was sold at a foreclosure sale.

P.S.

Let my fingers do the walking through the Polk County Public Records, and just as I suspected, she was personally served on 1/21/09. Notices of Hearing and Motions were later filed and she would have had to have received copies of those. There was an order scheduling a sale for 7/1/09, she would have gotten a copy of that. There was an order re-scheduling the sale, would have gotten a copy of that as well. There was a Notice of Re-scheduled Sale, would have gotten a copy of that. So, what was she doing during the 10 months the suit was pending?

 

Lol

 

you might be right, but investing in real estate is for lazy people, and requires little thinking and effort on my part, like I said I don't even bother writing checks, all the bills are on auto-pay, anyways the point wasn't to brag, the reason I made my first post was to state why I think it's not a bad idea to be purchasing real estate right now, specially if you have cash, even if i'm not right about it, it is my assumption and it is where my money is going