bharatbhasha.com
Free Articles  >>  Business And Finance >>  Page 1377  >> 

St Louis Mortgage Loan Modification Not Nearly As Lucrative As a Foreclosure





Millions of dollars have been enjoyed by numerous companies for simply approving home sales for less than the owed balance. This is also known as a type of short sale.

The United States Treasury department has been paying $1500 for each loan file that is modified. These companies also handle the collection of mortgage payments and requests for assistance.

These companies or servicers can also get $1,000 for each loan modification completion under the government's modification program and additional stipends over a period of three years if borrowers stay current on their new mortgage payments.

But the problem has become that there will not be enough time nor man power to save the millions of homes where loan payments are in arrears more than 90 days nor do St Louis finance professionals feel there are enough incentives to accomplish this task.

The payouts provided by the Obama administration's bailout programs don't come close to what servicers will earn by choosing to foreclose instead.

In fact, "the incentives being offered by the government are small compared to the counter-incentive of foreclosure" so says chief economist Diane Swonk from Mesirow Financial.

Many feel that since the lending industry has its own set of incentives, you can't tell people to do something that's not in their best financial interest, especially in an market that is still struggling.

Now it seems, according to Swonk, that free enterprise even in a downturn economy such as ours can rightfully advocate greed over doing what is morally right and in the best interest of the St Louis mortgage owner.

And yes, this has become a double-edged sword so to say. The second quarter of 2009 showed that modified homeowners has missed at least one loan payment as reported by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The statistics go on to show that a total of twenty-four percent of St Louis home loans modified in that same period were 90 days or more overdue.

Some now say that loan modifications do not work while others insist that we need more time to see how this plan unfolds before throwing in the proverbial towel.

Marie McDonnell, owner of Truth in Lending Auditing & Recovery Services in Orleans, Massachusetts suggests that these servicers are not really losing money when a re-default occurs.

If the homeowner fails to meet the terms of their new loan modification and the property isn't approved for a short sale under the HAFA program, then servicers can proceed with a foreclosure and recoup all their money when the property is sold.

And since there is more money to be made with a foreclosed property, the majority of servicers will go the as many say the immoral route and not help save the homeowner's property.

Once a loan is 90 days or more overdue, servicers can charge processing and foreclosure fees along with markups for attorneys, appraisers and other associated services.

Keep in mind this does not include any and all monthly late fees that can run as high as 5 percent of the mortgage payment.

Let's talk about numbers for a moment. A $195,000 home going into foreclosure could bring approximately $11,000 in income for these servicers.

Rumors have it that on the average, servicers can easily make 10 times the amount more than any of the government stipends being offered by simply foreclosing on the house.

The sad thing is mortgage investors will take a loss from a foreclosure or a short sale, but not the servicers. As mentioned earlier, they get paid regardless because they are first in line to be paid from the proceeds of the home sale.

This unfortunate situation was only made worse when politicians rejected new legislation designed to allow bankruptcy judges to reduce mortgage balances and interest rates to help such homeowners.

The provisions know as the 'cram-down' law would have allowed judicial modified loans which in essence would have given better terms to the consumer to make it easier to continue with their mortgage payment.

This new legislation would have prevented servicers from using greed and financial gain in deciding who gets a loan modification and who goes into foreclosure. One has to stop and think was there any real hope for stopping this mortgage crisis in the first place.
About Author Floyd J. Tapia :

When a consumer wants to know more about a St Louis mortgage home loan, go to <a href="http://www.StLouisRefinancingGroup.com" target="_blank">http://www.StLouisRefinancingGroup.com</a>. Or for a business or commercial refinancing, visit us at <a href="http://www.LibertyLendingConsultants.com/St-Louis-Commercial-Loans" target="_blank">http://www.LibertyLendingConsultants.com/St-Louis-Commercial-Loans</a> or call Floyd at 314-334-0210 or 877-334-0210.


Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/finance-and-business.php/370996


Article Added on Friday, April 27, 2012
LD
Other Articles by Floyd J. Tapia

Distressed St Louis Mortgage Owners May Be Penalized For Saving Money
The St Louis mortgage industry is puzzled at the report coming from the United States Treasury Department stating that approximately 90,000 distressed homeowners may lose their federal mortgage funding that was made available by the foreclosure prevention programs. This report is not just for those who have yet to apply. The loss of monetary benefits includes those who have already completed their loan modification and have paid their lower payments on time every month. While some of these...

St Louis Mortgage Tips For Getting a Loan Modification
The obvious failing of the home loan modification programs has created mixed views on whether homeowners should even waste their time trying to apply for funding that may never materialize. However, most economists will say that all is not lost. Well, for those who share this optimistic opinion about these federal programs, here are some proven ideas that have been relayed by St Louis refinancing experts that may actually help increase your change of being approved and funded. Let's dive...

St Louis Home Mortgage 3 Simple Rules to Remember When Loan Shopping
For all those renting or simply wanting to upgrade their home, getting a St. Louis home loan to purchase their dream house is still the quintessential American dream. Our goal is to help potential homeowners to avoid the obvious and not so obvious pitfalls of a mortgage disaster. The Federal Reserve has released recommendations that we would like to echo at this time. These home mortgage loan tips can apply to purchasing a St. Louis new home or refinancing an existing mortgage. 1. The...

St Louis Mortgage Community Stunned at Home Owners Choosing Not to Pay Their Home Loans
Most experts would readily agree that the realty industry is in shambles. Yet, to much dismay, the number of Americans who are purposely not paying their mortgage loan is growing at a stunning rate. What was once a financial taboo by not faithfully paying one's mortgage payment is now becoming chic by many standards. Both national as well as local St Louis mortgage owners no longer wish to have the financial burden of what they legally owe. In fact, they are diverting their cash flow from...

St Louis Finance Professionals Say Short Sales Being Encouraged by HAFA
It has been very difficult for Americans to keep track of all the federal bailout programs that were originally designed to halt this dying economy. Much to the chagrin of banks, short sales are getting more and more publicity and the financial blessings of being used to avoid foreclosure altogether. A short sale enables the homeowner to leave their home while not getting the devastating hit on their credit report compared to a foreclosure entry. Plus, the short sale can do much for the bank...

St Louis Refinancing Loan Watch Out For 3 Things That Could Ruin Your Home Loan
Your family has located the home of their dreams. You have your lending already taken care of and so you move ahead with signing a contract. But to your chagrin, you find out there will be delays at the closing table and wonder why is this happening to you? In most situations, the borrower has changed their lending circumstances along the way and that St Louis mortgage loan is history at least for now. Banking requirements are strict at this time due to the losses on Wall street and the...

St Louis Mortgage Professional Says HAMP Stopping Foreclosures Would Be a Miracle
Key inside officials on Capitol Hill seem to be joining the criticism involving the federal foreclosure prevention program known as HAMP due to its numerous failures including their cynical outlook on where its heading. 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...

St Louis Mortgage Owners Confronted With Ongoing HAMP Failings
In an anticipated yet disturbing announcement, Amherst Securities Group LP’s Laurie Goodman told Congress that the U.S. loan modification program called HAMP (Home Affordable Modification Program) is “destined to fail” because it doesn’t confront the real problem of negative home equity that is driving foreclosures nationwide. This is definitely bad news for St. Louis mortgage owners who are themselves dealing with a less than stellar real estate market notably in the once fast growing suburbs...

St Louis Mortgage Consumers Here Are 5 More Innovative Home Buying and Refinance Tips
Although the St. Louis mortgage and real estate market has drastically changed over the last 18 months, there are ways that consumers can avoid or at least minimize the home buying stress factor. The following five simple yet ingenious tactics will help in making your St. Louis home loan and home buying experience a better one that will yield positive results. 1. Do not make the mistake by waiting to apply for your loan - Reports from Washington issued in early January announced that...

St Louis Refinance Experts Say Home Loan Applicants May Not Receive Future USDA Loans
Once upon a time, their existed a federal mortgage program from the United States Department of Agriculture that would guarantee low down payments, no down payments and low interest rates for rural home buyers. However, with the stringent St Louis home mortgage lending requirements facing would be homeowners today, tens-of-thousands of potential buyers have been ushered into this program with promises of a better life, a better home loan in a financial fairytale land not so far away. Recent...

Click here to see More Articles by Floyd J. Tapia
Publishers / Webmasters
Article ID: 370996
DELINK URL from Authors Bio
REMOVE Article
Tell A Friend
Leave A Comment!
Download this article in PDF
Report Article!
Search through all the articles:


276 Users Online!!
Related Articles:
Latest Articles:
 
Business And Finance >> Top 50 Articles on Business And Finance
Category - >
Advertising Advice Affiliate Programs Automobiles
Be Your Own Mentor Careers Communication Consumers
CopyWriting Crime Domain Names DoT com Entrepreneur Corner
Ebooks Ecommerce Education Email
Entertainment Environment Family Finance And Business
Food & Drink Gardening Health & Fitness Hobbies
Home Business Home Improvement Humour House Holds
Internet And Computers Kiddos and Teens Legal Matters Mail Order
Management Marketing Marriage MetaPhysical
Motivational MultiMedia Multi Level Marketing NewsLetters
Pets Psychology Religion Parenting
Politics Sales Science Search Engine Optimization
Site Promotion Sports Technology Travel
Web Development Web Hosting WeightLoss Women's Corner
Writing Miscellaneous Articles Real Estate Arts And Crafts
Aging


Disclaimer: The information presented and opinions expressed in the articles are those of the authors
and do not necessarily represent the views of bharatbhasha.com and/or its owners.


Copyright © AwareINDIA. All rights reserved || Privacy Policy || Terms Of Use || Author Guidelines || Free Articles
FAQs Link To Us || Submit An Article || Free Downloads|| Contact Us || Site Map  || Advertise with Us ||
Click here for Special webhosting packages for visitors of this website only!
Vastu Shastra

Cheap Reseller Hosting Provided By AwareIndia







Company IDS