August 6th, 2009
The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market. The bad debts the firms own would be placed in new government financial institutions – so-called “bad banks” – that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.
The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Fannie Mae and Freddie Mac have government charters to buy home loans from banks, which they repackage and sell to investors. The banks can then use the proceeds to offer more loans to home buyers.
The proposal, which is preliminary and one of several under discussion, is scheduled to be taken up today by the White House’s National Economic Council. The government’s efforts so far “have taken the risk out of those two firms,” Treasury Secretary Timothy Geithner said. “The only question that remains is what form, what structure they ultimately will take.”
In an interview yesterday announcing that he would step down this month, James Lockhart, the chief regulator of Fannie Mae and Freddie Mac, said there needs to be a “good bank, bad bank” structure.
Good Bank, Bad Bank
The “bad bank” would be a depository for Fannie Mae’s and Freddie Mac’s bad assets. Then, the government could create new companies, if it chose to do so, that would attract private investment in support of mortgage finance. Options for the “good banks” include consolidating the firms into a single government agency, leaving mortgage finance purely to private banks or maintaining a hybrid model.
A major problem has been that Fannie Mae and Freddie Mac own and insure trillions of dollars of existing mortgages. With the economy still in a deep recession, joblessness rising and defaults on home loans expected to continue to increase, there is great uncertainty over the size of future losses at Fannie Mae and Freddie Mac. That, in turn, is likely to drive investors from committing money to the companies.
Anderson Chase Financial
Tags: debt, foreclosure, loan, mortgage
Posted in Loan modification | 4 Comments »
August 5th, 2009
In a recent blog, we discussed two reasons why lenders may be reluctant to modify delinquent loans, those reasons being 1) 30 percent of delinquent borrowers just need time – if a bank modifies those loans, they’ll end up losing money on a homeowner who would’ve worked things out on their own eventually, and 2) risk of redefault.
It appears that lenders have other reasons for not modifying your loan, even with the Obama loan initiative, which rewards lenders $1000 for each modified loan and $1000 a year for the next three years. When borrowers stop paying, banks collect fees out of the proceeds when the homes are sold in foreclosure, and the longer a homeowner is late on payments, the more opportunity the lender has to accumulate revenue: fees for insurance, appraisals, title searches, legal services, etc. Legal experts say that the potential for lenders to collect extra fees from their borrowers’ delinquency are pretty significant – Obama’s incentives may pale in comparison. Extra icing for delinquency and then more for foreclosure? And even more depending on the length of delinquency? Why WOULDN’T that whet the appetite of an unscrupulous mortgage company?
Our advice to you is to find solid representation that will plead your case before your lender. Every lender is confronted by hundreds, if not thousands, of aggrieved borrowers and homeowners desperate to save their homes. Having professional, legal representation will not only put more pressure on the lender to modify your loan but also give your case more clout.
Anderson Chase Financial
Tags: debt, homeowners, loan delinquency, Loan modification, mortgage
Posted in Loan modification | 1 Comment »
August 4th, 2009
So here we are at the beginning of another month. And a busy month it is! Not only is Anderson Chase Financial picking up more and more loan modification and debt settlement projects, but we are also expanding our services to lease modification. It’s an exciting new step in the growth of company, and we’re quite proud to be announcing the introduction of this new service. With lease modification, we will be negotiating on behalf of your business to rework your lease terms with your landlord. This service is available to businesses of all sizes, big and small, and in any stage of their commercial lease cycle.
August will be a busy month for us both in and out of the office. For those with kids, it’s the final month before school starts, so families are cramming in final trips and vacations. Families across America are packing up the kids and shuttling them against their will on road trips to destinations that may or may not be enticing. I remember this all too well. For myself, I will be attending a family wedding in LA next weekend and watching Wicked in SD the following week, to name just a few of the upcoming things I’m looking forward to in August.
Other Anderson Chase representatives are equally busy outside of work, with one having just moved and another having just nursed her baby back to health after a bout of pneumonia. We’re not an office of cogs in a machine. We’re an office of mothers, fathers, brothers, sisters, golfers, singers, mma organizers, food enthusiasts, you name it. We have richly-layered lives outside the doors of our office. Loan modification, debt settlement, lease modification … these things shouldn’t take up your whole life.
But you already know that. =)
Anderson Chase Financial
Tags: commercial lease modification, Debt Settlement, Lease modification, Loan modification
Posted in About Us, Lease modification | 8 Comments »
July 31st, 2009
In a recent survey by LoopNet Pulse Poll of commercial real estate and investment professionals, the outlook seems grim for the real estate market. While many have predicted significant recovery in the housing sector by the end of 2009, it seems that most experts aren’t so sure. In fact, only about 10 percent of the real estate and investment professionals surveyed believe that recovery can be expected in 2009. Back in May, 33 percent thought that we could expect recovery in 2009. It seems that hope is waning.
So when CAN we expect the housing market to recover? Over 30 percent of real estate experts – a 5 percent increase from May – believe that to be in 2011. But the majority of those polled, 56 percent (up from 42 percent in May), expect recovery to come next year.
Among other survey findings:
* The majority of respondents expect prices to fall further, within 11 to 20 percent, while 20 percent expect declines of 20 percent or more.
* Among owners, 28 percent think pricing in commercial real estate has bottomed and will decline by 5 percent or less. Nearly 20 percent of investors believe that too.
* Eighteen percent of brokers surveyed expect up to 5 percent declines in prices and 19 percent predicted declines of 20 percent or more.
* Sixty percent expect prices to hit its lowest level between fourth quarter 2009 and third quarter 2010.
* The majority agreed multifamily offers the best long-term investment opportunity in the current cycle.
If you’re considering a loan modification, the best time to send in a proposal to your lender and get an approval would be now. If you wait too long, the chances that you will lose your home will only grow. Gather all important documents together, generate a financial plan for the remainder of 2009 with a target mortgage payment program and ideas of ways to further cut costs, and contact your lender.
Best of luck, from Anderson Chase Financial.
Anderson Chase Financial
Tags: debt, Debt Settlement, foreclosure, homeowners, loan, Loan modification, mortgage
Posted in Loan modification, Uncategorized | 3 Comments »
July 30th, 2009
What does it mean to be “underwater” or “upside down”? When a property is underwater, it means that the homeowner owes more than the property is worth. People who bought their homes in 2006, the peak of the housing bubble when prices were highest, are now left with property that is impossible to sell.
Now the government is redressing its Home Affordable Refinance Program to help out homeowners who have not been delinquent in payments but are upside down and dealing with negative amortization. Lenders can now offer new mortgages to borrowers if the property value is up to 25 percent greater than the mortgage amount. It used to be that lenders could only refinance loans for borrowers whose mortgage was no more than 5 percent greater than the home’s value. However, considering the significant drop in real estate prices, 5 percent wasn’t going to cut it for many homeowners.
You may be wondering, “Don’t we have bigger issues to deal with? Like homeowners who’ve already MISSED payments?” And yes, the government has been trying to mend this issue with various initiatives which have helped to varying degrees, and many loan modification agencies – ones that breed integrity and customer value – are serving consumers for this purpose. But we want to not only remedy the present but also stem future waves of foreclosures.
Many borrowers who AREN’T late on payments are still stuck with mortgages characterized by high interest rates or the potential to adjust beyond the homeowner’s means in coming years. To make matters worse, lenders and mortgage insurers have tightened underwriting rules, typically requiring borrowers to have at least 15 percent equity in a home.
There is some fine print in this new refinancing program. Borrowers must hold a loan that was purchased by Freddie Mac or Fannie Mae, the government-controlled companies that buy most mortgages. To determine whether you have a Fannie or Freddie loan, go to the “loan lookup” tab at www.MakingHomeAffordable.gov.
If you qualify, your interest rate will very likely be slightly higher than the market’s best loan rates, especially if you refinance with someone other than your current servicer. And if you are 5 to 25 percent underwater with a Fannie Mae loan, you must refinance with your current servicer to qualify.
No matter what your current mortgage situation, there is help available. You just need to know where to look and who to consult. Even if it may not seem like your situation is particularly pressing, there are steps that can be taken now to alleviate potential problems in the future.
Anderson Chase Financial
Tags: debt, Debt Settlement, financial protection, foreclosure, homeowners, loan, Loan modification, mortgage, negative equity
Posted in Debt Settlement, Loan modification, Uncategorized | 28 Comments »
