Stop Foreclosure Answer

In a recent Blog Post I commented about how frustrated I was with an article in the Wall Street Journal, “Mortgage Modifying Fails to Halt Defaults.” This article commented on a Fitch Report that 65 to 75% of subprime loans which were modified will become 60 days or more delinquent within 12 months after the loan is modified. That means that the people will be facing foreclosure again.

I went on to say that the average person who read this article and did no further research would naturally assume that loan modifications were a total failure. They would never find out the reason there has been such a high rate of people facing foreclosure again after their loans were modified.

Well, it looks like I am not the only one to be upset with the message this article contained. On June 5, the Wall Street Journal contained a letter from Richard Brown, the Chief Economist of the Federal Deposit Insurance Corporation. In his letter Mr. Brown took exception to the article.

Mr. Brown commented that The Wall Street Journal omitted some facts from the Fitch Report. The first was that many of the loan modifications made in 2007 actually raised the monthly payment for the people facing foreclosure. Second this changed for the loan modifications on 2008. In most of the modifications made in 2008 the monthly payment was actually reduced. Third, only 20% of the people who had their subprime loans modified in 2008 have fallen behind on their payments again.

Mr. Brown’s letter confirmed what I had written in that earlier post. The news media is commenting how loan modifications have failed. In the process they are scaring the average person. Yet the reporters are not doing the research to determine the reasons loan modifications may not be working.

It is sad that the Wall Street Journal did not give Mr. Brown’s letter as much prominence as it did the original article on this. I am not sure how many people actually saw his letter.

If you are facing foreclosure or on the verge of falling behind on your mortgage payments, don’t be discouraged by articles and news reports indicating that loan modifications are failing. Please contact a lawyer or an expert in helping people facing foreclosure. Let them know what your situation is. Find out from them what you need to do to protect your family and save your home.

Much Success,

Mark Elkins

Did you hear about the lady in Tennessee?

A widow and a senior citizen she has lived in her home for the last 32 years. Needless to say her income is fixed and she fell behind on her mortgage payments. Her mortgage company, Wells Fargo, started foreclosure and her home was scheduled to be auctioned off at the end of May.

Her community rallied to help her save her home. A local mortgage company took on her case and is trying to get her a reverse mortgage. The challenge is that the property values in her community have fallen significantly. The mortgage she can get is $30,000 short of being able to pay off her loan with Wells Fargo. The balance on that loan was $123,000.

A local church scheduled a car wash to try to raise enough cash to save her home. In my opinion they would have had to wash quite a few cars to raise enough money to even put a slight dent in the amount that she was short.

Wells Fargo indicated that they had tried quite a few loan modifications with this woman and they failed.

Her home is now scheduled to be auctioned off on June 26.

I wonder what type of modifications Wells Fargo offered this woman. Were they serious attempts to help her or were they just attempts to have her pay the amount that she had fallen behind and then resume making her monthly payments again?

If Wells Fargo had talked to her about a reverse mortgage earlier before the property values had dropped could she have gotten more and would the shortage have been less?

Would Wells Fargo and their lawyers consider forgiving a portion of the shortage on the mortgage? $30,000 is a huge difference on a $123,000 mortgage. The proceeds from the car wash probably came nowhere near that amount. If Wells Fargo takes the home through foreclosure, how much would they be able to sell it for? Would they lose more on it than they would by accepting whatever she could offer?

It does not look like this lady ever got a lawyer or an expert in loan modifications to help her. If she did, she may not have been in the bind that she is now.

If you are facing foreclosure, you may think that you don’t need outside help. You can just negotiate with your mortgage company. Just remember that the people at the mortgage company are protecting the interests of the mortgage company. They are not working in your behalf. They may offer you a loan modification that may not be in your best interests.

Don’t become their victim.

Much Success,

Mark Elkins

I just want to warn you. What I have to say today may disturb you. These statistics are really frightening.

The Center for Responsible Lending just estimated that from the beginning of 2009 to June 1 over 1 million new foreclosures have been filed in the United States. That is just about 200,000 a month.

There is a new foreclosure every 13 seconds.

6,500 new foreclosures start every day.

2,400.000 foreclosures will start in 2009.

2009 property values will drop by $502 billion.

By the end of 2012 there will be 9 million new foreclosures.

Property values will drop $1.9 trillion by the end of 2012.

What does all this mean?

First – it is going to be very difficult for mortgage companies to keep up with the requests for loan modifications that they are going to receive. They are going to have to increase the size of their staffs tremendously to handle the volume.

Second – The amount of time it is going to take to get a loan modification is going to be very long.

Third – With new inexperienced people at mortgage companies working on these files, the quality of the work will be questionable. The modifications that will be made will probably not be as good as they can be. Many people facing foreclosure may not be offered as low a monthly payment as necessary based on their circumstances. The number of people defaulting again will continue to remain high.

General Motors has just declared bankruptcy. 21,000 of their workers will be let go nationwide. Many of General Motors’ suppliers will be forced to downsize too. No one knows how many of their employees will be let go. Some of these people will be facing foreclosure. Did the Center for Responsible Lending include these in their estimates?

The picture is not good. Much trouble lies ahead. If you are facing foreclosure, you want to do all you can to protect your family and save your home. Don’t try to do it yourself. Get help from a lawyer or an expert.

Much Success,

Marl Elkins

You may wonder why I am writing about a new horror movie, “Drag Me to Hell,” which opened in theaters on 5/29.

If you have looked at my website, www.stopforclosureanswer.com, you can see that I am not a fan of mortgage lenders. I have seen far too many instances where they have just zapped people on their mortgages. When people fall behind on their payments and face foreclosure, the people working for the lender frequently are rude and abusive with them. They don’t try to help them to take the steps necessary to protect their families and save their homes.

As the mortgage crisis has intensified the American public has started to become more aware of what is actually happening. All too frequently they have heard horror stories of people facing foreclosure because of crises in their lives. Their mortgage lender won’t do anything to help them. Total strangers have jumped in and offered their help. In the process the mortgage lender has modified their mortgages in the eleventh hour right before the people facing foreclosure have to give up and move from their homes.

This has caught the attention of Hollywood. “Drag Me to Hell” is a horror movie about the foreclosure crisis. A loan officer wants to get ahead at the bank at which she works. An old Slavic woman who is behind on her mortgage payments comes in to ask for an extension on her mortgage payments. The loan officer denies her extension and foreclosure is imminent. The old woman retaliates the only way she can. She places a curse on the loan officer.

I just love that. The movie does what I could never do. The old woman really sticks it to her loan officer. In addition to being a horror movie there are a lot of laughs.

If you are facing foreclosure, get the help you need to take control of the process and save your home. However, please don’t place a curse on your mortgage lender or any of their employees.

Much Success,

Mark Elkins

Sometime ago I listed the initial eleven mortgage companies that were participating in the Making Home Affordable Modification Program. These companies and their web sites are:

NameBank of America www.bankofamerica.com/mha/