News: Many Say Owners Who Refuse To Pay Their Mortgage Should Not Be Allowed To Buy Another Home For Some Time [News Hot Line: 877-334-0210]

There is a growing number of homeowners festering in this housing market who are defiantly refusing to pay their mortgage and in essence thumbing their noses at the financial companies holding their home loans.

The shame of foreclosure along with the unwillingness to pay what they contractually owe is no longer a burden these homeowners care to bear.

In fact, they are diverting their cash flow from their housing expense to more frivolous expenditures such as credit card debt, entertainment and other debts less important and costly.

Thus, the money used gets them out of these secondary debts allowing them to get by or enjoy life’s pleasures.  It has now become a cat and mouse game with the attitude of ‘force me out if you can.’

The question of moral responsibility seems to be overshadowed by the notion that these ones feel the banks and lending companies created their crisis with bad advice and ‘wrongful loans’ thus releasing the poor, ignorant consumer from all accountability.

Now, this is not to say that there are hundreds of thousands of homeowners who were lied to or taken advantage of during the St Louis lending process not to mention those who lost their jobs through no fault of their own.

But in all fairness, just as many Americans who bought homes in the last five years committed nothing less than fraud on their ‘stated income’ lending applications or greedily bought too much house on their small budget knowing full well they should never have bought such a pricey home.

Recent data shows that official foreclosure procedures have been initiated against almost 1.8 million households.  And the ability to slow these serious lending problems seems next to impossible.

There are numerous legal challenges that are facing both the consumer and mortgage servicers including foreclosure moratoriums.

This doesn’t even account for the immense amount of pressure being handed out on Capitol Hill to not only offer more loan modifications but in turn graduate these trial solutions into permanent new loans.

The other problem seems to lie with the inability or refusal of the lenders to deal with so many mortgages that are heading to or already in default.

According to LPS Applied Analytics, the average mortgage consumer already in foreclosure has been delinquent for 438 days before finally being evicted.  This is up from 251 days in January 2008.

The St Louis Refinancing Group news team and various real estate experts report that the number of those who are overextended and plan on living ‘rent free’ as it were is growing at a phenomenal rate.

There is news circulating the industry speculating that more than 650,000 households have not made a payment on their home loan in over 18 months.  That is over 547 days.

There may be change on the horizon.  Rumor has it that both political and banking powers are pushing for legislation that would prevent these homeowners who are deliberately refusing to pay their mortgage from utilizing government sponsored funds for future home loans.  Let us see how this fares.

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When applying for any type of St Louis mortgage, always discuss your options with a top St Louis mortgage broker. Call Liberty Lending Consultants, the recognized St Louis refinancing and home loan experts, at 877-334-0210 or 314-334-0210 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 314-698-4092 or 877-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis commercial lending with no upfront fees.

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News: TARP Inspector Barofsky Takes a Close Look at HAMP

Special inspector general to the Troubled Asset Relief Program (TARP), Neil Barofsky, has initiated an audit of the Home Affordable Modification Program (HAMP).

The U.S. Treasury Department allocated $75 billion from TARP to fund HAMP when the program started back in March 2009.

As of February 2010, the 113 servicers assigned to assist HAMP with these delinquent loans provided more than 170,000 permanent modifications which as of today’s date equates to approximately 5 percent of the total loan modifications that were to occur.

Critics of the HAMP program have been complaining that the numbers are far short of the 3 to 4 million that were to be helped as stated by the Obama Administration last year.

They also claim that this Federal program doesn’t specifically address key difficulties for the troubled loans.

The decision from Barofsky’s office to conduct the audit came after he received a letter from Sen. Jeff Merkley’s office (D-Ore.), addressing concerns over the program’s formula for the Net Present Value (NPV) of a troubled loan.

Now in simple terms, the NPV refers to the value-to-date of a cash-generating investment. In this case, a mortgage.

When a borrower falls behind on their mortgage payments, the investor or servicer generates an NPV for the loan “as-is” or if it is modified.

Thus, if the NPV of a modified loan is higher, the modification is said to be “NPV positive.”

Under HAMP guidelines, if the loan is “NPV positive” after modification, the servicer must provide the complete workout if they are to receive the incentive payment for assisting the homeowner.

The main problem that Barofsky’s audit will investigate is whether or not the servicers are correctly applying the NPV test under the HAMP program and how much the Treasury is doing to ensure cooperation.

Communication with borrowers is also a key issue that Barofsky will also look at and in addition when their NPV test fails, how readily do they identify other options available for these borrowers.

The House Committee on Oversight and Government Reform, also began an investigation of HAMP in February on concerns of the “effectiveness and efficiency” of this program.

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News: An Unprecedented 33 Months of Coming Foreclosures

An alarming report released by The Standard & Poor’s (S&P) financial company announced that the so-called hidden supply of REOs and pending foreclosures will most likely take at least 33 months or realistically a minimum of three years to rectify itself if and only if liquidation rates hold steady.

Even more upsetting is that the S&P called its estimate “conservative” because the company’s analysis was based on the number of properties the company believes to be lurking in the shadows right now.

This list includes repossessed homes that banks have not put on the market and already delinquent mortgages that may likely turn into foreclosures largely due to unemployment looming around the 10 percent level.

Mortgage analysts nationwide fear that the S&P’s assessment does not take into account any loans that have yet to show serious signs of distress which may only add to the foreclosure fatalities mentioned above.

It is hard to put a finger on the potential mortgage fall out since the ratings agency has not released any specific number of loans in their calculated obscured supply.

However, they said the current and original balance of seriously delinquent and REO loans stands at approximately $426.3 billion.

An earlier study made months ago by Amherst Securities estimates this demoralizing fiscal blunder to encompass about 7 million loans.

Another financial institution, First American CoreLogic, places a larger gap with the actual number saying it is closer to 1.7 million.

At this point, the actual number seems irrelevant as we assuredly brace for additional financial turmoil in the coming months.

“It is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market,” as stated by analysts at Standard & Poor’s.

Source:  DSNews.com

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