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October 19, 2009 at 12:44 PM #471659October 19, 2009 at 1:56 PM #470857
SD Realtor
Participantsdr a few weeks back I posted about a lead I had a few months ago for a short sale listing. I went to the appt and met with the guy but never heard back. I called the guy several weeks ago to see how things went and he told me he had an attorney work with the lender and indeed he also claimed to have gotten a loan mod down to the current appraised value. By my numbers that would have had to been about 170k in reduction. I also noted no recording on the realist tax roll. Whether the guy was BSing me or not I do not know but I do know he has not listed the home for sale, nor is he in default.
By the same token we just picked up another place at auction and that HO had ponied up 3K to Pacific Law Centers to mod the loan and well… you see how that turned out.
Like everything else it depends on the quality of the attorney I guess.
***************
Analyst you wrote alot of what we already know and have posted. Of course all bets are off, until the govt returns to fiscal discipline and no it is not an indefinite shell game. Come on though, do you honestly see our govt doing that on its own? Now we may be forced to face the music by our creditors but left to our own devices, no I don’t see it getting done. I see plenty of bailout gas left in the tank and I am fairly confident we will see more “stimulus” on the heels of the currently expiring stimulus package.
After all we still have a health care package, a cap and trade, and lets not forget immigration reform to pass through to become law. I do firmly believe that tape and wire that holds things together will stay in place via the goop of more stimulus until these measures are made law…
After that???? heheheheheh… perhaps open the floodgates?
October 19, 2009 at 1:56 PM #471038Participantsdr a few weeks back I posted about a lead I had a few months ago for a short sale listing. I went to the appt and met with the guy but never heard back. I called the guy several weeks ago to see how things went and he told me he had an attorney work with the lender and indeed he also claimed to have gotten a loan mod down to the current appraised value. By my numbers that would have had to been about 170k in reduction. I also noted no recording on the realist tax roll. Whether the guy was BSing me or not I do not know but I do know he has not listed the home for sale, nor is he in default.
By the same token we just picked up another place at auction and that HO had ponied up 3K to Pacific Law Centers to mod the loan and well… you see how that turned out.
Like everything else it depends on the quality of the attorney I guess.
***************
Analyst you wrote alot of what we already know and have posted. Of course all bets are off, until the govt returns to fiscal discipline and no it is not an indefinite shell game. Come on though, do you honestly see our govt doing that on its own? Now we may be forced to face the music by our creditors but left to our own devices, no I don’t see it getting done. I see plenty of bailout gas left in the tank and I am fairly confident we will see more “stimulus” on the heels of the currently expiring stimulus package.
After all we still have a health care package, a cap and trade, and lets not forget immigration reform to pass through to become law. I do firmly believe that tape and wire that holds things together will stay in place via the goop of more stimulus until these measures are made law…
After that???? heheheheheh… perhaps open the floodgates?
October 19, 2009 at 1:56 PM #471395Participantsdr a few weeks back I posted about a lead I had a few months ago for a short sale listing. I went to the appt and met with the guy but never heard back. I called the guy several weeks ago to see how things went and he told me he had an attorney work with the lender and indeed he also claimed to have gotten a loan mod down to the current appraised value. By my numbers that would have had to been about 170k in reduction. I also noted no recording on the realist tax roll. Whether the guy was BSing me or not I do not know but I do know he has not listed the home for sale, nor is he in default.
By the same token we just picked up another place at auction and that HO had ponied up 3K to Pacific Law Centers to mod the loan and well… you see how that turned out.
Like everything else it depends on the quality of the attorney I guess.
***************
Analyst you wrote alot of what we already know and have posted. Of course all bets are off, until the govt returns to fiscal discipline and no it is not an indefinite shell game. Come on though, do you honestly see our govt doing that on its own? Now we may be forced to face the music by our creditors but left to our own devices, no I don’t see it getting done. I see plenty of bailout gas left in the tank and I am fairly confident we will see more “stimulus” on the heels of the currently expiring stimulus package.
After all we still have a health care package, a cap and trade, and lets not forget immigration reform to pass through to become law. I do firmly believe that tape and wire that holds things together will stay in place via the goop of more stimulus until these measures are made law…
After that???? heheheheheh… perhaps open the floodgates?
October 19, 2009 at 1:56 PM #471472Participantsdr a few weeks back I posted about a lead I had a few months ago for a short sale listing. I went to the appt and met with the guy but never heard back. I called the guy several weeks ago to see how things went and he told me he had an attorney work with the lender and indeed he also claimed to have gotten a loan mod down to the current appraised value. By my numbers that would have had to been about 170k in reduction. I also noted no recording on the realist tax roll. Whether the guy was BSing me or not I do not know but I do know he has not listed the home for sale, nor is he in default.
By the same token we just picked up another place at auction and that HO had ponied up 3K to Pacific Law Centers to mod the loan and well… you see how that turned out.
Like everything else it depends on the quality of the attorney I guess.
***************
Analyst you wrote alot of what we already know and have posted. Of course all bets are off, until the govt returns to fiscal discipline and no it is not an indefinite shell game. Come on though, do you honestly see our govt doing that on its own? Now we may be forced to face the music by our creditors but left to our own devices, no I don’t see it getting done. I see plenty of bailout gas left in the tank and I am fairly confident we will see more “stimulus” on the heels of the currently expiring stimulus package.
After all we still have a health care package, a cap and trade, and lets not forget immigration reform to pass through to become law. I do firmly believe that tape and wire that holds things together will stay in place via the goop of more stimulus until these measures are made law…
After that???? heheheheheh… perhaps open the floodgates?
October 19, 2009 at 1:56 PM #471694Participantsdr a few weeks back I posted about a lead I had a few months ago for a short sale listing. I went to the appt and met with the guy but never heard back. I called the guy several weeks ago to see how things went and he told me he had an attorney work with the lender and indeed he also claimed to have gotten a loan mod down to the current appraised value. By my numbers that would have had to been about 170k in reduction. I also noted no recording on the realist tax roll. Whether the guy was BSing me or not I do not know but I do know he has not listed the home for sale, nor is he in default.
By the same token we just picked up another place at auction and that HO had ponied up 3K to Pacific Law Centers to mod the loan and well… you see how that turned out.
Like everything else it depends on the quality of the attorney I guess.
***************
Analyst you wrote alot of what we already know and have posted. Of course all bets are off, until the govt returns to fiscal discipline and no it is not an indefinite shell game. Come on though, do you honestly see our govt doing that on its own? Now we may be forced to face the music by our creditors but left to our own devices, no I don’t see it getting done. I see plenty of bailout gas left in the tank and I am fairly confident we will see more “stimulus” on the heels of the currently expiring stimulus package.
After all we still have a health care package, a cap and trade, and lets not forget immigration reform to pass through to become law. I do firmly believe that tape and wire that holds things together will stay in place via the goop of more stimulus until these measures are made law…
After that???? heheheheheh… perhaps open the floodgates?
October 19, 2009 at 2:35 PM #470907analyst
Participant[quote=temeculaguy]
Where I depart from analyst, I don’t think it’s the government’s fault or kicking the can down the road or anything to do with responsibility. It’s just a business decision on the lenders part, one that has more upsides in some situations than a repo for them. The guy will stay, keep up the place, make a payment (albeit a smaller one) and he will feel good about it, even brag about it. In time, they have a decent chance of getting all of their money back. You can envy that guy, i feel bad for him a little, if his value returns in the future, he won’t get the benefit of it that his neighbors will (like a renter), but then again, his other option is be kicked out and to rent for probably a similar price and this way he doesn’t have a landlord. Don’t do a loan mod as a strategy, do it if it is your last resort.[/quote]
I agree that the lenders may be doing what’s logical given the rules as recently amended. What many are failing to acknowledge is that, until recent changes, the rules did not allow the lenders that choice. And the rule change was forced upon the Financial Accounting Standards Board by the federal government (Congress threatening to legislate FASB into irrelevance).
Until mark-to-market was suspended, the lender was required to value its loans at market value, not face value. For government-insured institutions (all the traditional banks, and the investment banks which changed their status to get government help to avoid going under), the markdowns of loan values to market would have lowered the asset side of the balance sheet, and, therefore, equity/capital, to a level that REQUIRED regulatory takeover and liquidation. The lender would cease to exist, therefore not making any business decisions, good or bad.
Whoever bought the marked-down loans during the liquidation process would then have the choice of foreclosing on them, or going into the business of lending to borrowers in distress. The attractiveness of either course would be determined by the price paid relative to the predicted recovery value. It would be pure speculation to guess which path might be taken in any given case. There would probably be some of both, since new corporations would be created to replace the ones whose irresponsibility led to their own destruction.
October 19, 2009 at 2:35 PM #471088Participant[quote=temeculaguy]
Where I depart from analyst, I don’t think it’s the government’s fault or kicking the can down the road or anything to do with responsibility. It’s just a business decision on the lenders part, one that has more upsides in some situations than a repo for them. The guy will stay, keep up the place, make a payment (albeit a smaller one) and he will feel good about it, even brag about it. In time, they have a decent chance of getting all of their money back. You can envy that guy, i feel bad for him a little, if his value returns in the future, he won’t get the benefit of it that his neighbors will (like a renter), but then again, his other option is be kicked out and to rent for probably a similar price and this way he doesn’t have a landlord. Don’t do a loan mod as a strategy, do it if it is your last resort.[/quote]
I agree that the lenders may be doing what’s logical given the rules as recently amended. What many are failing to acknowledge is that, until recent changes, the rules did not allow the lenders that choice. And the rule change was forced upon the Financial Accounting Standards Board by the federal government (Congress threatening to legislate FASB into irrelevance).
Until mark-to-market was suspended, the lender was required to value its loans at market value, not face value. For government-insured institutions (all the traditional banks, and the investment banks which changed their status to get government help to avoid going under), the markdowns of loan values to market would have lowered the asset side of the balance sheet, and, therefore, equity/capital, to a level that REQUIRED regulatory takeover and liquidation. The lender would cease to exist, therefore not making any business decisions, good or bad.
Whoever bought the marked-down loans during the liquidation process would then have the choice of foreclosing on them, or going into the business of lending to borrowers in distress. The attractiveness of either course would be determined by the price paid relative to the predicted recovery value. It would be pure speculation to guess which path might be taken in any given case. There would probably be some of both, since new corporations would be created to replace the ones whose irresponsibility led to their own destruction.
October 19, 2009 at 2:35 PM #471445Participant[quote=temeculaguy]
Where I depart from analyst, I don’t think it’s the government’s fault or kicking the can down the road or anything to do with responsibility. It’s just a business decision on the lenders part, one that has more upsides in some situations than a repo for them. The guy will stay, keep up the place, make a payment (albeit a smaller one) and he will feel good about it, even brag about it. In time, they have a decent chance of getting all of their money back. You can envy that guy, i feel bad for him a little, if his value returns in the future, he won’t get the benefit of it that his neighbors will (like a renter), but then again, his other option is be kicked out and to rent for probably a similar price and this way he doesn’t have a landlord. Don’t do a loan mod as a strategy, do it if it is your last resort.[/quote]
I agree that the lenders may be doing what’s logical given the rules as recently amended. What many are failing to acknowledge is that, until recent changes, the rules did not allow the lenders that choice. And the rule change was forced upon the Financial Accounting Standards Board by the federal government (Congress threatening to legislate FASB into irrelevance).
Until mark-to-market was suspended, the lender was required to value its loans at market value, not face value. For government-insured institutions (all the traditional banks, and the investment banks which changed their status to get government help to avoid going under), the markdowns of loan values to market would have lowered the asset side of the balance sheet, and, therefore, equity/capital, to a level that REQUIRED regulatory takeover and liquidation. The lender would cease to exist, therefore not making any business decisions, good or bad.
Whoever bought the marked-down loans during the liquidation process would then have the choice of foreclosing on them, or going into the business of lending to borrowers in distress. The attractiveness of either course would be determined by the price paid relative to the predicted recovery value. It would be pure speculation to guess which path might be taken in any given case. There would probably be some of both, since new corporations would be created to replace the ones whose irresponsibility led to their own destruction.
October 19, 2009 at 2:35 PM #471522Participant[quote=temeculaguy]
Where I depart from analyst, I don’t think it’s the government’s fault or kicking the can down the road or anything to do with responsibility. It’s just a business decision on the lenders part, one that has more upsides in some situations than a repo for them. The guy will stay, keep up the place, make a payment (albeit a smaller one) and he will feel good about it, even brag about it. In time, they have a decent chance of getting all of their money back. You can envy that guy, i feel bad for him a little, if his value returns in the future, he won’t get the benefit of it that his neighbors will (like a renter), but then again, his other option is be kicked out and to rent for probably a similar price and this way he doesn’t have a landlord. Don’t do a loan mod as a strategy, do it if it is your last resort.[/quote]
I agree that the lenders may be doing what’s logical given the rules as recently amended. What many are failing to acknowledge is that, until recent changes, the rules did not allow the lenders that choice. And the rule change was forced upon the Financial Accounting Standards Board by the federal government (Congress threatening to legislate FASB into irrelevance).
Until mark-to-market was suspended, the lender was required to value its loans at market value, not face value. For government-insured institutions (all the traditional banks, and the investment banks which changed their status to get government help to avoid going under), the markdowns of loan values to market would have lowered the asset side of the balance sheet, and, therefore, equity/capital, to a level that REQUIRED regulatory takeover and liquidation. The lender would cease to exist, therefore not making any business decisions, good or bad.
Whoever bought the marked-down loans during the liquidation process would then have the choice of foreclosing on them, or going into the business of lending to borrowers in distress. The attractiveness of either course would be determined by the price paid relative to the predicted recovery value. It would be pure speculation to guess which path might be taken in any given case. There would probably be some of both, since new corporations would be created to replace the ones whose irresponsibility led to their own destruction.
October 19, 2009 at 2:35 PM #471744Participant[quote=temeculaguy]
Where I depart from analyst, I don’t think it’s the government’s fault or kicking the can down the road or anything to do with responsibility. It’s just a business decision on the lenders part, one that has more upsides in some situations than a repo for them. The guy will stay, keep up the place, make a payment (albeit a smaller one) and he will feel good about it, even brag about it. In time, they have a decent chance of getting all of their money back. You can envy that guy, i feel bad for him a little, if his value returns in the future, he won’t get the benefit of it that his neighbors will (like a renter), but then again, his other option is be kicked out and to rent for probably a similar price and this way he doesn’t have a landlord. Don’t do a loan mod as a strategy, do it if it is your last resort.[/quote]
I agree that the lenders may be doing what’s logical given the rules as recently amended. What many are failing to acknowledge is that, until recent changes, the rules did not allow the lenders that choice. And the rule change was forced upon the Financial Accounting Standards Board by the federal government (Congress threatening to legislate FASB into irrelevance).
Until mark-to-market was suspended, the lender was required to value its loans at market value, not face value. For government-insured institutions (all the traditional banks, and the investment banks which changed their status to get government help to avoid going under), the markdowns of loan values to market would have lowered the asset side of the balance sheet, and, therefore, equity/capital, to a level that REQUIRED regulatory takeover and liquidation. The lender would cease to exist, therefore not making any business decisions, good or bad.
Whoever bought the marked-down loans during the liquidation process would then have the choice of foreclosing on them, or going into the business of lending to borrowers in distress. The attractiveness of either course would be determined by the price paid relative to the predicted recovery value. It would be pure speculation to guess which path might be taken in any given case. There would probably be some of both, since new corporations would be created to replace the ones whose irresponsibility led to their own destruction.
October 19, 2009 at 3:12 PM #470961CA renter
Participant[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.
I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.
Oops there goes another shadow inventory house, oops there goes another…….[/quote]
I’ve heard similar stories, and totally believe it’s being done, but with the stipulations others have mentioned about the “forgiven” balance (and fees and interest???) remaining until the sale or transfer of the house, at which time it will all come due.
Either way (total forgiveness or deferment), I hope they are prepared for defaults reaching 50% levels or higher. What kind of fool would be making full payments on his mortgage when all the idiots are getting this kind of gift from the taxpayers. I’m assuming the govt/taxpayers are propping up the bond side of these deals because we haven’t heard much lately about bond holders not receiving payment on their loans (or have I missed some news?).
October 19, 2009 at 3:12 PM #471142Participant[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.
I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.
Oops there goes another shadow inventory house, oops there goes another…….[/quote]
I’ve heard similar stories, and totally believe it’s being done, but with the stipulations others have mentioned about the “forgiven” balance (and fees and interest???) remaining until the sale or transfer of the house, at which time it will all come due.
Either way (total forgiveness or deferment), I hope they are prepared for defaults reaching 50% levels or higher. What kind of fool would be making full payments on his mortgage when all the idiots are getting this kind of gift from the taxpayers. I’m assuming the govt/taxpayers are propping up the bond side of these deals because we haven’t heard much lately about bond holders not receiving payment on their loans (or have I missed some news?).
October 19, 2009 at 3:12 PM #471500Participant[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.
I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.
Oops there goes another shadow inventory house, oops there goes another…….[/quote]
I’ve heard similar stories, and totally believe it’s being done, but with the stipulations others have mentioned about the “forgiven” balance (and fees and interest???) remaining until the sale or transfer of the house, at which time it will all come due.
Either way (total forgiveness or deferment), I hope they are prepared for defaults reaching 50% levels or higher. What kind of fool would be making full payments on his mortgage when all the idiots are getting this kind of gift from the taxpayers. I’m assuming the govt/taxpayers are propping up the bond side of these deals because we haven’t heard much lately about bond holders not receiving payment on their loans (or have I missed some news?).
October 19, 2009 at 3:12 PM #471577Participant[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.
I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.
Oops there goes another shadow inventory house, oops there goes another…….[/quote]
I’ve heard similar stories, and totally believe it’s being done, but with the stipulations others have mentioned about the “forgiven” balance (and fees and interest???) remaining until the sale or transfer of the house, at which time it will all come due.
Either way (total forgiveness or deferment), I hope they are prepared for defaults reaching 50% levels or higher. What kind of fool would be making full payments on his mortgage when all the idiots are getting this kind of gift from the taxpayers. I’m assuming the govt/taxpayers are propping up the bond side of these deals because we haven’t heard much lately about bond holders not receiving payment on their loans (or have I missed some news?).
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