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mmnfinancial
311 Posts |
 Posted - 05/25/2008 : 10:42:13 AM
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I have done purchases on a few shorts sales and also helped a few clients get out there homes on them. All where late on MTG going into Foreclosure. I now have a few clients that want to sale there homes
ASAP because of the market in there area is falling quickly. Also the builders that sold them there homes are putting up bigger homes for less. They have not been late but all have stated loans to purchase or
refi the property in the past. With the new guidelines they would not qualify for a new loan and MI or home is not worth the payoff. Is it possible for these borrowers to short sale there homes without being
late on there current MTG? When talking to the lenders the client express the lenders do not seem to care unless they are close to a Foreclosure status.. They can show they can no longer pay the MTG with
there current income and rising prices on everything in the world today. Any feed back would be a help!
1st loan: pay option
2nd loan: 5 yr. fix about to adjust
3rd loan: 30yr fix commission working and biz is slow. can not afford loan/home any more.
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AGreene00
2901 Posts |
Posted - 05/25/2008 : 6:15:25 PM
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| I think the honest truth is that the lender doesn't care to make a deal unless the borrower is past due. I haven't heard of any instances yet where the lender did a short sale for a current account. |
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rtrefflich
3935 Posts |
Posted - 05/25/2008 : 6:41:21 PM
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What benefit does a lender have to deal with someone who is not late? The bank is the one who is going to get stuck with the bad debt and it isn't right for them to just give away the debt without the homeowner facing any reprocusions. At least being late puts the debt into non-performing status and they can work a little more.
Sometimes banks are working with borrowers but I have yet to see anyone do it on someone who is not late. |
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Scrooge McDuck
9824 Posts |
Posted - 05/25/2008 : 6:55:01 PM
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| i think that if you are able to impress upon the lender the impending doom if a short is not implemented, they will consider it. the banks need to take these hits, and will when sold properly. |
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slants
4309 Posts |
Posted - 05/25/2008 : 7:04:34 PM
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quote:
Originally posted by rtrefflich
What benefit does a lender have to deal with someone who is not late? The bank is the one who is going to get stuck with the bad debt and it isn't right for them to just give away the debt without the homeowner facing any reprocusions. At least being late puts the debt into non-performing status and they can work a little more.
Sometimes banks are working with borrowers but I have yet to see anyone do it on someone who is not late.
Not trying to be a contrarian, but I can't really see how a loan being in non-performing status would represent benefit to a bank in evaluating a short payoff - loss is loss with or without delinquencies, loss would actually be higher if delinquent. I know I've read more than one post here from people who have personally received loan mods or have had family or friends receive voluntary modifications on their notes from their banks, without having ever been late and some without even asking for one. I think if one were to submit a short sale package to their lender with their financials affirming that they do not have the means to maintain the mortgage going forward, banks have been known to approve those requests and in my opinion would be smart to avert a guaranteed eventual default. |
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peter
4937 Posts |
Posted - 05/25/2008 : 10:01:04 PM
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I think loss of employment as evidenced by the pink slip
and a strong LOE would be a cogent reason for certain lenders
with established guidelines for loss mitigation, i.e.
Countrywide, B of A, etc. I do have customers who have
recently been laid off but I can't see how a broker can get
compensated by banks for helping them and for helping these
laid-off homeowners. I did once out of compassion for
my customer with Ocwen and immediately Ocwen contacted my
customer and remodifed the note. My letter proposing
compensation was never replied and I couldn't go after my
customer for compensation as he almost had nothing left.
It would be a good charity work if you could do it without
compensation to yourself as a broker or an L/O.
Peter |
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rtrefflich
3935 Posts |
Posted - 05/26/2008 : 10:46:00 AM
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I agree with you however I am just talking from our experience. I am currently working on two loan mods with clients who have not been late as of yet. We have gotten no response from the bank. Both of these clients made excellent money in construction and have not earned enough to cover minimum expenses for the past five months. Their savings are exhausted and they are almost to the point where they will have to stop making payments.
Two separate people who work for me have tried Loan Mods on their own without being late and on each occasion have been told that the bank will do nothing w/out being late. Both of these clients had loans that went up over $1200 when their 3 yr ARM recast.
There are people out there who will do anything they can, get second jobs, find outside sources of income, etc. to keep their credit intact. A bank is the one who is going to lose all of their money, the client loses his credit. Why should a bank renegotiate on the loan when there are no repercussions that will ever happen to the borrower if he isn't late?
quote:
Originally posted by slants
quote:
Originally posted by rtrefflich
What benefit does a lender have to deal with someone who is not late? The bank is the one who is going to get stuck with the bad debt and it isn't right for them to just give away the debt without the homeowner facing any reprocusions. At least being late puts the debt into non-performing status and they can work a little more.
Sometimes banks are working with borrowers but I have yet to see anyone do it on someone who is not late.
Not trying to be a contrarian, but I can't really see how a loan being in non-performing status would represent benefit to a bank in evaluating a short payoff - loss is loss with or without delinquencies, loss would actually be higher if delinquent. I know I've read more than one post here from people who have personally received loan mods or have had family or friends receive voluntary modifications on their notes from their banks, without having ever been late and some without even asking for one. I think if one were to submit a short sale package to their lender with their financials affirming that they do not have the means to maintain the mortgage going forward, banks have been known to approve those requests and in my opinion would be smart to avert a guaranteed eventual default.
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slants
4309 Posts |
Posted - 05/26/2008 : 11:01:42 AM
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quote:
Originally posted by rtrefflich
I agree with you however I am just talking from our experience. I am currently working on two loan mods with clients who have not been late as of yet. We have gotten no response from the bank. Both of these clients made excellent money in construction and have not earned enough to cover minimum expenses for the past five months. Their savings are exhausted and they are almost to the point where they will have to stop making payments.
Two separate people who work for me have tried Loan Mods on their own without being late and on each occasion have been told that the bank will do nothing w/out being late. Both of these clients had loans that went up over $1200 when their 3 yr ARM recast.
There are people out there who will do anything they can, get second jobs, find outside sources of income, etc. to keep their credit intact. A bank is the one who is going to lose all of their money, the client loses his credit. Why should a bank renegotiate on the loan when there are no repercussions that will ever happen to the borrower if he isn't late?
quote:
Originally posted by slants
quote:
Originally posted by rtrefflich
What benefit does a lender have to deal with someone who is not late? The bank is the one who is going to get stuck with the bad debt and it isn't right for them to just give away the debt without the homeowner facing any reprocusions. At least being late puts the debt into non-performing status and they can work a little more.
Sometimes banks are working with borrowers but I have yet to see anyone do it on someone who is not late.
Not trying to be a contrarian, but I can't really see how a loan being in non-performing status would represent benefit to a bank in evaluating a short payoff - loss is loss with or without delinquencies, loss would actually be higher if delinquent. I know I've read more than one post here from people who have personally received loan mods or have had family or friends receive voluntary modifications on their notes from their banks, without having ever been late and some without even asking for one. I think if one were to submit a short sale package to their lender with their financials affirming that they do not have the means to maintain the mortgage going forward, banks have been known to approve those requests and in my opinion would be smart to avert a guaranteed eventual default.
All that may be true which is why it is necessary to make the banks understand that 2nd incomes or any other remedies to maintain the loan will not be feasible or forthcoming. I don't think a bank's impetus in calculating potential loss is "there are no repercussions that will ever happen to the borrower if he isn't late?". They have actually been known to grant and offer unsolicited modified loan terms or freezes on notes to avert potential default. They are bean counters and it all boils down to whether the numbers pencil out, not so much as imposing punishment to the homeowners for their bad performance. More than anything else, I think the banks are overwhelmed with the defaulted loans which have a more urgent deadline than one that's not yet in distress.
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mudshark
3873 Posts |
Posted - 05/26/2008 : 11:18:40 AM
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| If they are leaving the area, job transfer is always good. I've gotten that through a couple of times with clean payment history and high scores. |
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