I have a client that has come to me and says that BOA is offering to accept about 80% of the current value, (about 50% of the existing mortgage balance debt) as acceptance to pay off the exsting mortgage. The buyer has the ability to have this fundraiser, but just wondering if anyone else has any experience? It sounds smart on the banks side to offer this program, but smart and bank in the same sentence???
Jackie Henderson Kumm
Edina Realty
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After reading the stream, I have to say I am surprised! Agents that do Short Sales have to let the "moral issues" go..it's too late to judge anyone here! Good Grief..we all need to work together to get our States OUT of the foreclosure mess..period! There are ALWAYS bad apples, and unfortunately using them as examples is misplaced.
The Lenders that did these loans (as we have found out), cut them up, sold them,(the Europeon countries followed our leads and BOUGHT them), bet against them, and cashed out. OK..let it go..done. To blame borrowers because they are now upside down and need to get out is ridiculous. To worry about "fairness" to the people that did not borrow $ or buy cars or pay their kids' college education will not move us forward. Life is not fair. If you want to pursue fairness in this housing mess, go to the source..the Banks. They were encouraging these loans, and qualifying them..to everyone!
If you feel it is morally reprehensible to be forgiving mortgages, then get out of Short Sales because that is what we do as Short Sale Agents!
Kimberly, you are getting closer to the truth than most.
It was not the Banks that made these loans, nor did they set the standards for getting a loan. It is the secondary market that determined those guidelines. And remember they had Mr. Frank's help.
The entity that you are calling the lender only underwrote (made sure the guidelines of that secondary market were met) the loan and collected a fee for said service called a Service Release Premium. Yes it is the same thing as a Mortgage Broker's Yield Spread Premium only it was not a requirement for the underwriting bank to disclose that premium. By the way that entity, the Bank, also collects 1% of the monthly payment as long as it services said payment, and 100% of any late fees or fees associated with the foreclosure process, which they inflate.
The secondary market(Fannie Mae, Freddie Mac, and Ginnie Mae) made their money when they sold pieces of the notes to pools of mortgage back securities. These pieces were sold for a profit. The actual investors either wrote off the loss or were compensated by insurance or other means. The world of investing is very much in depth and too complicated to fully discuss here. Google Mortgage Backed Securities and follow the trail.
When I personally finance anything I keep the original note safe, because in Florida you need it in order to collect.
Just my two pennies worth. Some people I feel sorry for and the ones that just took advantage because they could, hopefully get what they deserve.
Regarding the securitization of mortgages, that is not a new phenomenon. This was taking place prior to the boom years. As well as losing a job, getting sick or any other hardship. Has this just started happening in 2007???
The problem was the rapid decline in home prices that prevented the sick, unemployed or whoever else from selling and at worst breaking even and being able to payoff there debt and satisfy there mortgage.
We ALL contributed to the false price increases that eventually fueled the boom and bust. From the Realtor who was selling multiple properties to the "speculator" who was flipping and flipping to the mortgage broker who was originating crappy loans he knew his clients didn't understand. Or how about the banks who created these different products only to feed the hungry wall st firms who were begging for more. The ratings firms who gave these products A ratings and ultimately the homeowners who knew the mortgage they were getting was above what they should have got or worse lied on there apps because who really would care......"Real estate always goes up"
So when we speak about "fair" or always pointing the finger at the banks sometimes it's good to remember all of us had a little part in this. So back to the main issue, I'm for my community and I advocate for homeowners in my community with all that I have however I'm not naive and am willing to admit when sometimes if I was on the other side how I would feel.
Side note about "fair". So then why should they care when it's not "fair" when they cut your commission? Or when they don't stop a sale or give you an approval letter. Those things are not fair and we ban together to create sites like this to fight back!!
Again guys just thoughts and different spins to allow us to think and be better.
Oh, forgot to add that I did not get into the real estate business until after it collapsed :) I never sold a property to any speculators or flippers
Good point Eric. Back to the original post because this one has gotten pretty far off. I don't know and I really do not care how or why the homeowner got into this mess but if their bank is offering them a loan modifcation or short refi or what ever you want to call it and it works in the best interest of the homeowner, that is exactly what I as a short sale agent want. Who are we to judge the homeowner? If we don't like or don't want a homeowner to get help through a short sale because it is not fair, then we should not do short sales.
This world is an equal opportunity, unequal reward world, especially in real estate.
Right on Jeff! If we get stuck judging, we do not focus on remedies. Time to stop pointing fingers and do what's best for the borrowers, and therefore our Country.
Investors need to get servicers(Banks) to make these deals. It will stabilize the home values. I'm all for it. Probably wasn't the Banks idea......
If the bank is offering the deal and they can do it, then, yes...get everything in writing before sending in a nickle and then keep the paperwork forever.
Who gives a rat's anatomy about what people "think" is "fair". If it's legit, take the deal.
Hi Steve,
I have to agree with Harry on this one. First, no personal offense on your viewpoint as this website encourage viewpoints from others.
Next, these "peace offerings gone wild" does nothing for the struggling honest and foresight mortgagers or the future of the economy. Even though it is the lender's money, we all end up sharing the losses. Let's not forget about Wall Street. I would to say that I think most people are very sympathy towards people who sustain real life hardship crisis but, this type of offering seems to predominantly reward people who don't make good decisions.
More often than not, these decisions that were made start start with by the homeowner were equivalent to a "man trying to cross a NASCAR track during a race with a cell phone to his ear."
Then, by the numbers involved we all end up sharing these costs in bank goods, services and fees as we've all seen lately in the news. Regarding the question of "Who gives a rats a_ss what people think?" I do! And, I would certainly hope that the professionals who have a bigger influence on the future of this industry would do the same.
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