St Louis Finance: Consumers Exit Troubled St Louis Mortgage Programs [News Hot Line: 877-334-0210 | Floyd Tapia]

There seems to be peril at hand for the Obama administration’s flagship loan modification program as it sinks deeper and deeper into oblivion.

Approximately 1.24 million borrowers who have enrolled in the $75
billion mortgage modification program have dropped out or been kicked out as it were.

That amazing number is only exceeded by the number of consumers who have managed to successfully have their loan payments reduced to help them save their homes.

Only 340,000 homeowners have graduated to the permanent home loan modification plateau and are also making payments on time.

Of course, White House officials are saying the housing market is much better financially than when President Obama entered office.

They base this strong comment by continuing that the large number of homeowners who were rejected from the program will somehow and some way receive help in other ways.  That’s pretty optimistic especially since their program has failed Americans over and over again.

But St Louis home loan analysts expect the majority of these individuals will still wind up in foreclosure which will inevitably slow the promised economic recovery.

What some people don’t understand is that when this loan modification program was introduced, the Obama administration initially pressured banks to sign up borrowers without insisting first on providing proof of their income.

So, when banks later required that this information be collected, thousands of these distressed homeowners who originally qualified were now disqualified or dropped out due to the administration’s short-sightedness.

Then came the war between the borrowers and the banks. Side A said the banks and their servicers lost lost their documents.  Side B fervently said that these borrowers were not sending back their paperwork or it was not properly filled out.  Right or wrong, in the end, the banks won.

There have been cases where consumers have made their house payments and yet have been unfairly kicked out of the program by irresponsible banks.

Such mistakes happen “more frequently than not, unfortunately,” said real estate lawyer, Sumani Lanka. “I think a lot of it is incompetence.”

Since then, more changes have evolved.  The U.S. Treasury now requires banks to collect two recent pay stubs at the start of the process.

Consumers are also required to give the Internal Revenue Service the right to provide their most recent tax returns to lenders and servicers at their request.

When this facet of the program was enacted, many people stopped enrolling in the program thus not deserving of financial help.

In fact, the number of homeowners who applied in May 2010 was 30,000 compared to last summer when more than 100,000 borrowers signed up every month.

Thus, as more people exit these loan bailout programs, this results in a new wave of foreclosures. Once again this would have an adverse toll on the housing market.

And if that doesn’t do the householder in, their very high debt burden might.

Credit ratings agency Fitch Ratings is now projecting that about 67 percent of borrowers with permanent modifications will later default once again within 12 months after getting their home loans modified.

Current data from the Obama administration published recently shows that nearly 50 percent of the  borrowers who fell out of the program in April 2010 received an alternative loan modification from their lender.

They also said only 7 percent went into the foreclosure process.

Another option that is now being used more often is the short sale in which banks agree to let borrowers sell their homes for less than they owe on their mortgage.

The consumer will take a less severe hit to their credit report  and may be better for communities because homes are less likely to be vandalized or fall into ruins.

The White House has provided a plan to give such homeowners who agree to short sales or voluntarily work with the banks and turn over their keys $3,000 for moving expenses.

The overall plan for this foreclosure prevention plan was to not only stabilize the housing market, but to provide additional funding for St Louis loans, push down mortgage rates and provide federal tax credits for home buyers.

The argument is that although many of these thing were put into place, most utterly failed or had miserable results.

Simply put, consumer advocates had high hopes for Obama’s home loan program when it began but quickly grew disenchanted at the less than desirable numbers.

“The foreclosure-prevention program has had minimal impact,” said John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer group.

He goes on to say:  “It is sad that they didn’t put the same amount of resources into helping families avoid foreclosure as they did helping banks.”

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 877-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

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St Louis Mortgage Refinancing and Loan Reduction News: St Louis Loan Modification Takes a Twist With Creative Door Knocking
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending and Loan Reduction

There are more and more companies going door-to-door to directly do business with consumers at their homes.

Although there are well-known religious groups and old-time sales companies that have been doing this for decades, one such industry that is very new to this type of marketing  are mortgage servicers.

In fact, these financial personnel are growing more and more creative in reaching out and are doing some serious door-knocking services in an attempt to enroll distressed borrowers into a workout plan or loan modification program according to speakers at the sixth annual Texas Mortgage Bankers Association (TMBA) Southern States Servicing Conference.

Rick Roniger, executive vice president and chief operating officer at Westlake, Texas-based First American Loss Mitigation, said servicers used to mail contact packages with return envelopes included.

However, this directive did not accomplish the goals and success originally anticipated.  So, the servicers turned to creative rewards-based outreach programs.

These “gimmicks” included mailing coffee mugs with single-serving-sized packages of coffee grounds to borrowers with notes encouraging them to “sit back, relax” and fill out the information about their late mortgage payments, Roniger said.

When this didn’t work, servicers sent out envoys or special field units to engage in a door-hanger service to encourage borrowers to contact their mortgage companies if they had trouble paying their home loan.

This door-hanging service eventually evolved into door-knocking services, which ultimately produced occasions of field agents or “financial proselytes” knocking on borrowers’ doors with good news and tidings and in some cases physically handing them a phone to call their servicers right on the spot.

“If we can talk to people, we can usually reach a workout deal,” said Brad Staley, managing director at Irving-based iServe Servicing, who also spoke at the Texas MBA conference.

As expected, he noted that the main challenge in resolving extremely distressed, low-value assets is making contact with the borrowers and then maintaining that contact once a workout plan is initiated.

And when many were not at home, some field services started knocking on borrowers’ doors after normal business hours and on weekend mornings very similar to what Jehovah’s Witnesses regularly do.

The big difference between these household visitors is that this growing religious organization widely known for their trademark door-knocking evangelizing come to offer free home bible teachings, while this innovative financial group come to save a consumer’s home for a price that hopefully most homeowners can now afford.

Other servicers that many call true fanatics will site in a car and legally stake out your house for up to an hour or until the borrowers return home or finally give up and answer the door.

The results?  “If the borrower responds to the outreach efforts, a workout plan can be reached 85-90% of the time,” Staley said.

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When applying for any type of St Louis mortgage or refinancing, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at (314) 336-9111 and ask for Steve Swan or Doug Stahlschmidt.

Business Owners: Call us at (314) 334-0210 and retain us for one of the best commercial loan modification and principal loan reduction programs available. A principal reduction or loan modification can help if you are underwater with negative equity. As commercial lending and loan modification program consultants, Floyd Tapia and his lending and legal team can focus on bringing you innovative private lending solutions to meet all types of financing needs. We have access to the largest portfolio of private lending institutions and investor backed funding sources available. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

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Here’s more information on mortgage defaults…

 

St Louis Mortgage Refinancing and Real Estate News –

St Louis Finance News: An Immoral Changing Mindset About Strategic Default?
News Hotline:  877-334-0210 | Floyd Tapia

Perhaps an amazing change of attitude may be permeating the housing industry but whether agreeably immoral or not, mortgage owners that owe more than their homes are worth or underwater are showing a greater tendency toward mortgage delinquency behavior.

This startling news is data according to a recent Fannie Mae housing survey of more than 3400 Americans.

Although shocking as this may be, in reality this may not be such jaw-dropping news to most consumers.

But it is quite obvious that this survey points to a numbness of mindset as far as responsibility among homeowners that may be significant.

Interestingly enough, Fannie Mae found that approximately two-thirds of survey respondents prefer owning a home to renting.

This is even in the face of abounding economic challenge and of course the downturn in housing prices.  However, the fact remains, the mentality of strategic default is spreading on a national level.

Since this has become a contagious moral disease, this decaying effect within communities is leading borrowers to seriously consider default as an acceptable option in the face of financial hardship.

The math is compelling enough to take this new borrowing mentality as serious as normal criteria for a St Louis home loan acceptance.

Both delinquent and current mortgage borrowers are now more than twice as likely to have realistically considered stopping payment if they currently know someone who has already defaulted on a mortgage loan.

Despite a growing acceptance of strategic default and the negative affect it has on their local community, the act of thinking about walking away and actually walking away are separate events.

This being argued by Kathleen Day, a representative at the Center for Responsible Lending.

As commonly expected, more than half or 53 percent of those responding to Fannie’s survey still believe that homeowners bear the responsibility for taking out loans they can or cannot afford.

On the other hand, when delinquent borrowers were asked the same question, about 58 percent are trying to convince the average consumer that they are not to blame.  Then who is?

As you may have guessed… the mortgage lender is the culprit and should be held accountable.  These poor misguided, ignorant and severely inflicted pawns in this financial fiasco feel that since the lenders know better what people can afford and should help guide people.

Many economists cry let’s be real.  It is becoming more of a realization that these borrowers need to take responsibility for their own actions.

They chose the home.  They knew down deep that they were coveting something they couldn’t afford nor rightfully deserved and many of these buyers pressured the lender to make it work or they would find one that would.

You cannot blame lenders for this detestable show of greed that also reared its ugly head with big business and the government knows these self-inflicting truths.

And even worse, in some cases, these are the very ones who also lied on their stated applications thus should be charged with mortgage fraud as many law enforcement and political persons are recommending.

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When applying for a St Louis mortgage or a St Louis home loan Liberty Lending Consultants loan, call the recognized St Louis home loan experts, at 877-334-0210 or 314-334-0210 and ask for Steve Swan, Doug Stahlschmidt or syndicated columnist Floyd Tapia, the host of the St. Louis Refinancing “Mortgage Minute.”

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St Louis Mortgage Refinancing and Real Estate News –

St Louis Finance News: Negative Equity to Positive Equity May Be Long Way Off…
News Hotline:  877-334-0210 | Floyd Tapia

A long awaited announcement came estimating that the average homeowner who currently has negative equity will probably not experience any positive equity until 2015 to early 2016 according to First American CoreLogic.

However, in those areas of the United States that was hit hard by this mortgage fiasco and are still in a severely depressed market, those borrowers in an “underwater” or negative equity prison may not experience positive equity until 2020 or later.

All in all, the total projection that is being laid on the financial table by CoreLogic said a realistic 11.3 million residential properties or a shocking 24 percent were in an underwater equity state at the end of the fourth quarter in 2009.

Whether this is good news or not at this particular time, it seems the largest decreases in home prices appear to be over.  Yet it remains to be seen how soon borrowers will return to their original positive equity.

Apparently, CoreLogic used sophisticated formulas and pricing to predict how much longer borrowers will be in negative equity.

They used projected future home values and unpaid principal balances for a selected set of Core Based Statistical Areas (CBSAs) to gauge how long it will take for the average underwater borrower to return to positive equity.

According to these initial projections, it will take the average borrower until 2015 or even the early part of 2016 for negative equity to completely disappear.

But as earlier stated, in those severely depressed markets, like Detroit for example, negative equity may not dissipate until 2020, largely due to its depressed economy.

Negative equity has been and continues to be widely considered a trigger to strategic default.

Thus the United States Treasury Department has announced their intentions to fully address this problem head on by encouraging or as many are saying “pushing” lenders and servicers to offer borrowers principal reductions on their mortgages through FHA refinancing.

A key CoreLogic economist brought out a good point that although many look to house price appreciation which will happen over time to offset negative equity, we must not forget that the paying down of loan balances will in most cases be a more significant remedy to this negative equity epidemic.

Now as far as loan payments and price increases are concerned, St Louis mortgage brokers are saying that over the next 10 years, the average loan balance will decrease by an annual rate of 3.3 percent.

But the average home price is expected to increase at a 3 percent annual rate over the same time period.  Again, not much profit as regards home appreciation.  We will have to wait and see.

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When applying for a St Louis mortgage loan or a St Louis refinancing Liberty Lending Consultants loan, call the recognized St Louis home loan experts, at 877-334-0210 or 314-334-0210 and ask for Steve Swan, Doug Stahlschmidt or syndicated columnist Floyd Tapia, the host of the St. Louis Refinancing “Mortgage Minute.”

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News: Even the Treasury With Mixed Comments Knows  HAMP Not Working

With the numerous reported failures of the federal program known as HAMP, inside senior officials seem to be jumping on the band wagon sharing their new found pessimistic viewpoints on where this program may be headed.

With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP),  and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.

Compare this to the 4 million it initially claimed, even if this new number of permanent loan modifications could be accomplished at this point seems to be only a miracle.

The reason for this  bleak outlook is that fewer than 200,000 or five percent have actually advanced from the trial program into a permanent modification mode.

But if matters couldn’t be worse, the inspector general’s report warned that many borrowers are at risk of re-defaulting on their St Louis mortgages even after receiving help under the federal program.

Is this due to irresponsibility on the homeowner’s part?  Consider this:  Many of these consumers still owe significantly more money than their homes are worth.  In addition, some have second mortgages or other debts.

Sidebar:  One statistic that we won’t even mention in this article would be the amount of homeowners who were irresponsible and bought homes they knew they couldn’t afford, those who took adjustable rate mortgage (ARM) St Louis loans with interest only payments just to get into a bigger house they didn’t deserve and finally the ones that are guilty of getting the so-called “liars loan” or in other words those who lied on their stated income application.

Barofsky then goes on to express his ongoing skepticism that the continuous offering of modifications was less than a meaningful goal.  What did the Treasury have to say in regards to what Barofsky said?

In a long, drawn out response included in the report, Herbert M. Allison, assistant Treasury secretary for financial stability said the program “should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing.  The number of permanent modifications is one element, but not the only element of gauging the success.”

It is rather interesting how politicians and their ever-so-loyal henchmen try to inadvertently, yet aggressively make excuses at why everyone is looking at things the wrong way except for them.

Well, in reality, he said the problem is not that it’s (HAMP) failing, but rather that Barofsky and other critics are not measuring its lack of success the correct way?  Oh, really.

Of course, I don’t even think the U.S. Treasury firmly believes that nonsense because Allison added that permanent modifications are really only one way to help struggling homeowners.

The fact that servicers’ offering other foreclosure prevention initiatives and alternatives such as short sales must be taken into consideration.

Yet, most people who have been following this program from its inception were spoon fed the amazing idea that permanent loan modifications through HAMP was the best and perhaps the only way the country would see this insurmountable amount of foreclosures go away.

It should also be noted that any permanent modifications that do not include meaningful principal reduction will in all likelihood fail.

I imagine the next set of reports to be issued is why everyone and everything caused HAMP to fail and what the final percent of foreclosures HAMP did help not taking into account the new wave of foreclosures coming in 2010 and 2011.

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When applying for a St Louis mortgage loan or a St Louis refinancing loan, call the St Louis home loan experts at 877-334-0210 or 314-334-0210 and ask for Steve, Doug or Floyd Tapia, host of the St Louis Refinancing Mortgage Minute.

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News: What Would You Think of Living Rent Free for Up to 3 Years

There is quite an extraordinary turn of events in the real estate industry.  This new trend involves borrowers who are delinquent on their mortgages but instead are paying their credit cards on time.

In fact, what many are calling ‘inexcusable irresponsibility,’ seems to now be the norm.  A new study by TransUnion points out that this throng has grown to 6.6 percent in the third quarter of 2009 from 4.9 percent in the same quarter of 2008.

What is also interesting is that borrowers that are delinquent on credit cards but current on their mortgages decreased from 4.1% to 3.6%.

According to Sean Reardon, the author of this study says, “This goes against conventional wisdom and that has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages.”

What has this change of attitude resulted from?  More and more troubled borrowers have concluded that with federal assistance in place to help homeowners to avoid foreclosure, they can easily miss one, two, three or more mortgage payments before getting that dreaded call from their lender.

But that’s just the beginning.  They actually have several more months of negotiations when it comes to choosing a loan modification, short sale option, even foreclosure itself thus giving them a roof over their heads for a prolonged amount of time.

Home building analyst Ivy Zelman commented that in numerous Florida counties the courts are so behind with the foreclosure process that it can take up to three years to get just one home through this complex system.

Many argue that this is not only unfair to homeowners who are struggling yet making their mortgage payments on time but borderline immoral financial conduct thus deserving no federal assistance whatsoever.

If you sat down and figured this up on paper, that’s approximately three years of living rent-free, which obviously frees up untold amounts of cash flow to now pay their Visa bill and frivolous expenses.

Is this fair to the millions of other responsible Americans who pay their mortgage payment on time?  This is the growing debate.

There are further studies involving almost 27 million credit records that suggest that the seriousness of these delinquencies is significantly higher with consumers whose credit scores are lower compared to the delinquency in the market as a whole.

Who then currently leads in this historic payment priority shift to credit cards over mortgage payments?  Not surprising are the states of California and Florida who are already embroiled in this foreclosure fiasco.

What’s more, these states are the same ones who have experienced a more severe housing bubble effect according to reports by TransUnion.