[DaCounselor]

We started talking about loan modifications many many months ago, so it should be no surprise to the old-timers here that this is happening. Mods are going to happen with increasing frequency, period. They are going to save alot of folks’ hides, at least for the time being.

Modifications will absolutely reduce the “must-sell” inventory that Rich has been so focused on. Neverless, I anticipate values will continue to come down simply due to the disconnect between prices and income and the unavailability of the exotic financing that contributed to the price run-up. In short, modifications may reduce the depth and speed of the devaluation, but not stop it. Certainly not stop it.

Mods are seen as an attractive option because of an anticipated “win-win” scenario. Distressed borrowers find relief. Loan servicers collect fees on mod paperwork. Investors maintain an income stream as opposed to a complete wipe-out. The politicians pronounce they have saved the day. And if prices continue to come down, those who have been waiting to buy win as well.

[DaCounselor]

We started talking about loan modifications many many months ago, so it should be no surprise to the old-timers here that this is happening. Mods are going to happen with increasing frequency, period. They are going to save alot of folks’ hides, at least for the time being.

Modifications will absolutely reduce the “must-sell” inventory that Rich has been so focused on. Neverless, I anticipate values will continue to come down simply due to the disconnect between prices and income and the unavailability of the exotic financing that contributed to the price run-up. In short, modifications may reduce the depth and speed of the devaluation, but not stop it. Certainly not stop it.

Mods are seen as an attractive option because of an anticipated “win-win” scenario. Distressed borrowers find relief. Loan servicers collect fees on mod paperwork. Investors maintain an income stream as opposed to a complete wipe-out. The politicians pronounce they have saved the day. And if prices continue to come down, those who have been waiting to buy win as well.

[DaCounselor]

We started talking about loan modifications many many months ago, so it should be no surprise to the old-timers here that this is happening. Mods are going to happen with increasing frequency, period. They are going to save alot of folks’ hides, at least for the time being.

Modifications will absolutely reduce the “must-sell” inventory that Rich has been so focused on. Neverless, I anticipate values will continue to come down simply due to the disconnect between prices and income and the unavailability of the exotic financing that contributed to the price run-up. In short, modifications may reduce the depth and speed of the devaluation, but not stop it. Certainly not stop it.

Mods are seen as an attractive option because of an anticipated “win-win” scenario. Distressed borrowers find relief. Loan servicers collect fees on mod paperwork. Investors maintain an income stream as opposed to a complete wipe-out. The politicians pronounce they have saved the day. And if prices continue to come down, those who have been waiting to buy win as well.

[DaCounselor]

We started talking about loan modifications many many months ago, so it should be no surprise to the old-timers here that this is happening. Mods are going to happen with increasing frequency, period. They are going to save alot of folks’ hides, at least for the time being.

Modifications will absolutely reduce the “must-sell” inventory that Rich has been so focused on. Neverless, I anticipate values will continue to come down simply due to the disconnect between prices and income and the unavailability of the exotic financing that contributed to the price run-up. In short, modifications may reduce the depth and speed of the devaluation, but not stop it. Certainly not stop it.

Mods are seen as an attractive option because of an anticipated “win-win” scenario. Distressed borrowers find relief. Loan servicers collect fees on mod paperwork. Investors maintain an income stream as opposed to a complete wipe-out. The politicians pronounce they have saved the day. And if prices continue to come down, those who have been waiting to buy win as well.

[DaCounselor]

We started talking about loan modifications many many months ago, so it should be no surprise to the old-timers here that this is happening. Mods are going to happen with increasing frequency, period. They are going to save alot of folks’ hides, at least for the time being.

Modifications will absolutely reduce the “must-sell” inventory that Rich has been so focused on. Neverless, I anticipate values will continue to come down simply due to the disconnect between prices and income and the unavailability of the exotic financing that contributed to the price run-up. In short, modifications may reduce the depth and speed of the devaluation, but not stop it. Certainly not stop it.

Mods are seen as an attractive option because of an anticipated “win-win” scenario. Distressed borrowers find relief. Loan servicers collect fees on mod paperwork. Investors maintain an income stream as opposed to a complete wipe-out. The politicians pronounce they have saved the day. And if prices continue to come down, those who have been waiting to buy win as well.

[DaCounselor]

“Where is your responsibility on this? When you were giddy with equity how come you didnt offer to pay the bank more because you were paying less than full price for the asset when the banks gave money away and inflated the value of your property.”
____________________________________

If I were answering these questions I would say that I did in fact pay full price for the property at the time I bought it. Regarding offering to pay the bank more at a later date due to an increase in value based upon events out of my control…well, I would absolutely be required to do so if that were part of my agreement with the lender. If that’s what the lender wanted, write it into the deal. Period.

On a purchase money loan in CA, the deal is the borrower agrees to make the payments and if they do not, the lender can take back the property. That’s it. As with any contract, if both parties agree to modify the deal, fine. Otherwise, no tears. Especially from a lender who is in the very business of entering into such deals over and over and over….

[DaCounselor]

“Where is your responsibility on this? When you were giddy with equity how come you didnt offer to pay the bank more because you were paying less than full price for the asset when the banks gave money away and inflated the value of your property.”
____________________________________

If I were answering these questions I would say that I did in fact pay full price for the property at the time I bought it. Regarding offering to pay the bank more at a later date due to an increase in value based upon events out of my control…well, I would absolutely be required to do so if that were part of my agreement with the lender. If that’s what the lender wanted, write it into the deal. Period.

On a purchase money loan in CA, the deal is the borrower agrees to make the payments and if they do not, the lender can take back the property. That’s it. As with any contract, if both parties agree to modify the deal, fine. Otherwise, no tears. Especially from a lender who is in the very business of entering into such deals over and over and over….

[DaCounselor]

“Where is your responsibility on this? When you were giddy with equity how come you didnt offer to pay the bank more because you were paying less than full price for the asset when the banks gave money away and inflated the value of your property.”
____________________________________

If I were answering these questions I would say that I did in fact pay full price for the property at the time I bought it. Regarding offering to pay the bank more at a later date due to an increase in value based upon events out of my control…well, I would absolutely be required to do so if that were part of my agreement with the lender. If that’s what the lender wanted, write it into the deal. Period.

On a purchase money loan in CA, the deal is the borrower agrees to make the payments and if they do not, the lender can take back the property. That’s it. As with any contract, if both parties agree to modify the deal, fine. Otherwise, no tears. Especially from a lender who is in the very business of entering into such deals over and over and over….

[DaCounselor]

“Where is your responsibility on this? When you were giddy with equity how come you didnt offer to pay the bank more because you were paying less than full price for the asset when the banks gave money away and inflated the value of your property.”
____________________________________

If I were answering these questions I would say that I did in fact pay full price for the property at the time I bought it. Regarding offering to pay the bank more at a later date due to an increase in value based upon events out of my control…well, I would absolutely be required to do so if that were part of my agreement with the lender. If that’s what the lender wanted, write it into the deal. Period.

On a purchase money loan in CA, the deal is the borrower agrees to make the payments and if they do not, the lender can take back the property. That’s it. As with any contract, if both parties agree to modify the deal, fine. Otherwise, no tears. Especially from a lender who is in the very business of entering into such deals over and over and over….

[DaCounselor]

“Where is your responsibility on this? When you were giddy with equity how come you didnt offer to pay the bank more because you were paying less than full price for the asset when the banks gave money away and inflated the value of your property.”
____________________________________

If I were answering these questions I would say that I did in fact pay full price for the property at the time I bought it. Regarding offering to pay the bank more at a later date due to an increase in value based upon events out of my control…well, I would absolutely be required to do so if that were part of my agreement with the lender. If that’s what the lender wanted, write it into the deal. Period.

On a purchase money loan in CA, the deal is the borrower agrees to make the payments and if they do not, the lender can take back the property. That’s it. As with any contract, if both parties agree to modify the deal, fine. Otherwise, no tears. Especially from a lender who is in the very business of entering into such deals over and over and over….

[DaCounselor]

Agreed, FSD. It’s going to be very interesting to see how many of the so-called Alt-A and prime loan resets actually end up as foreclosures. If the Fed rate/LIBOR continue their downward trend, these folks are looking at a minimal increase in payments (and possible decrease – crazy to think it but certainly possible). Even with payment increases, by definition these folks have solid credit and I would guess that it would take a drastic and truly unaffordable payment shock to drive them to mail in the keys. I think mailing in the keys is easier bantered about than actually done, when it comes down to brass tacks, particularly if you have great credit.

These folks are also probably better candidates for loan mods – very good credit histories, and if the intro rate is in the 5-6% range as opposed to a subprime 2% teaser rate, they should be able to qualify for a reasonable mod rate that will appeal to both sides of the deal. I would expect mods to increase in this demographic.

The problem these people face, however, is ultimately being upside down and strapped into increasing payments as the Fed/LIBOR tightens, which is inevitable. The current movement is in their favor, but the tide will most certainly turn eventually. These folks may very well not find themselves in trouble immediately after their impending resets, but instead further down the road.

[DaCounselor]

Agreed, FSD. It’s going to be very interesting to see how many of the so-called Alt-A and prime loan resets actually end up as foreclosures. If the Fed rate/LIBOR continue their downward trend, these folks are looking at a minimal increase in payments (and possible decrease – crazy to think it but certainly possible). Even with payment increases, by definition these folks have solid credit and I would guess that it would take a drastic and truly unaffordable payment shock to drive them to mail in the keys. I think mailing in the keys is easier bantered about than actually done, when it comes down to brass tacks, particularly if you have great credit.

These folks are also probably better candidates for loan mods – very good credit histories, and if the intro rate is in the 5-6% range as opposed to a subprime 2% teaser rate, they should be able to qualify for a reasonable mod rate that will appeal to both sides of the deal. I would expect mods to increase in this demographic.

The problem these people face, however, is ultimately being upside down and strapped into increasing payments as the Fed/LIBOR tightens, which is inevitable. The current movement is in their favor, but the tide will most certainly turn eventually. These folks may very well not find themselves in trouble immediately after their impending resets, but instead further down the road.

[DaCounselor]

Agreed, FSD. It’s going to be very interesting to see how many of the so-called Alt-A and prime loan resets actually end up as foreclosures. If the Fed rate/LIBOR continue their downward trend, these folks are looking at a minimal increase in payments (and possible decrease – crazy to think it but certainly possible). Even with payment increases, by definition these folks have solid credit and I would guess that it would take a drastic and truly unaffordable payment shock to drive them to mail in the keys. I think mailing in the keys is easier bantered about than actually done, when it comes down to brass tacks, particularly if you have great credit.

These folks are also probably better candidates for loan mods – very good credit histories, and if the intro rate is in the 5-6% range as opposed to a subprime 2% teaser rate, they should be able to qualify for a reasonable mod rate that will appeal to both sides of the deal. I would expect mods to increase in this demographic.

The problem these people face, however, is ultimately being upside down and strapped into increasing payments as the Fed/LIBOR tightens, which is inevitable. The current movement is in their favor, but the tide will most certainly turn eventually. These folks may very well not find themselves in trouble immediately after their impending resets, but instead further down the road.

[DaCounselor]

Agreed, FSD. It’s going to be very interesting to see how many of the so-called Alt-A and prime loan resets actually end up as foreclosures. If the Fed rate/LIBOR continue their downward trend, these folks are looking at a minimal increase in payments (and possible decrease – crazy to think it but certainly possible). Even with payment increases, by definition these folks have solid credit and I would guess that it would take a drastic and truly unaffordable payment shock to drive them to mail in the keys. I think mailing in the keys is easier bantered about than actually done, when it comes down to brass tacks, particularly if you have great credit.

These folks are also probably better candidates for loan mods – very good credit histories, and if the intro rate is in the 5-6% range as opposed to a subprime 2% teaser rate, they should be able to qualify for a reasonable mod rate that will appeal to both sides of the deal. I would expect mods to increase in this demographic.

The problem these people face, however, is ultimately being upside down and strapped into increasing payments as the Fed/LIBOR tightens, which is inevitable. The current movement is in their favor, but the tide will most certainly turn eventually. These folks may very well not find themselves in trouble immediately after their impending resets, but instead further down the road.

[DaCounselor]

Agreed, FSD. It’s going to be very interesting to see how many of the so-called Alt-A and prime loan resets actually end up as foreclosures. If the Fed rate/LIBOR continue their downward trend, these folks are looking at a minimal increase in payments (and possible decrease – crazy to think it but certainly possible). Even with payment increases, by definition these folks have solid credit and I would guess that it would take a drastic and truly unaffordable payment shock to drive them to mail in the keys. I think mailing in the keys is easier bantered about than actually done, when it comes down to brass tacks, particularly if you have great credit.

These folks are also probably better candidates for loan mods – very good credit histories, and if the intro rate is in the 5-6% range as opposed to a subprime 2% teaser rate, they should be able to qualify for a reasonable mod rate that will appeal to both sides of the deal. I would expect mods to increase in this demographic.

The problem these people face, however, is ultimately being upside down and strapped into increasing payments as the Fed/LIBOR tightens, which is inevitable. The current movement is in their favor, but the tide will most certainly turn eventually. These folks may very well not find themselves in trouble immediately after their impending resets, but instead further down the road.

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