Geotpf_IHB
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[quote author="trrenter" date=1251846117][quote author="irvine_home_owner" date=1251845906][quote author="RobertLarsen" date=1251842448][quote author="irvine_home_owner" date=1251841410][quote author="Geotpf" date=1251839043]
The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.
</blockquote>
What theory is this?
How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.
"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.
I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?
Since we're both water cooler "experts"... I think this is a fair request.</blockquote>
Gotta go to work! But, here's the most recent article I've seen on it. I'll try to find better cites later if needed.
"Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration?s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before."
"Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions."
http://www.cnbc.com/id/32630317</blockquote>
I read that post in the other thread too... but you left this part out:
<em>
While we have very strong loan modification programs now available, <strong>unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can?t solve...primarily unemployment and underemployment</strong>.
</em>
So even though BofA is trying to use loan mods as an excuse of why their foreclosure process is taking so long, they admit that their number of foreclosures will rise because people just don't qualify for the mods.
And I don't think a bank is going to come out and say "Yeah... we're delaying our foreclosure process because it's going to impact our capital ratios". Look at how those statements are phrased and you can sense there's no real sense of urgency from them to process foreclosures quickly. The comments in that article also come to the same conclusion that BofA isn't really being forthright in their statements. I know this is the Internet and we can't believe anything people say but here is one such comment:
<em>
I am Real Estate and Mortgage broker in Southern Ca; I believe that the statements that are being made by these institutions are inaccurate. I have knowledge of a BofA Countrywide asset manager who stated that in Southern Ca alone, they (the bank) was holding on to approximately 35,000 already foreclosed on properties that have not been released. Many of my counterparts that actively list REO properties have been extremely slow. Banks will attribute this to the 6 month 'moratorium', however many of the properties already foreclosed on prior to the moratorium are held in possession by these banks.
</em>
Now that number may be extreme but common sense just says there are way too many distressed properties as a result of the bubble out there... why are they not on the market? Does it make sense to you that inventory is so low when there are not that many qualified buyers out there? Where is everything going? Are all these people just underwater and not paying their mortgage and living rent free? It just does not compute.</blockquote>
Yes people are living rent free.
Two people that work in my company are doing it now.
One has not paid a mortgage to indymac in 18 mos and has no intention of modifying his loan and actually rents out a room to someone.
The other, I don't know who holds his mortgage, has not paid a mortgage payment in 13 months.
<strong>I read somewhere that only 9% of troubled loans are actually being modified.</strong></blockquote>
That's because the banks are just now getting the loan mod programs up and running, so they haven't modded many loans-yet. That's what the BoA quote in the CNBC article is saying.
Now, IMHO, the real question is, "After the loan mod programs are running full speed, what percentage of the pre-shadow inventory will get loan mods and won't redefault, and what percentage will eventually be foreclosed upon?"
I think the answer is unknown as of now. If very few loan mods are ultimately successful, there will (eventually) be a flood of REOs and prices will drop. If a lot of people get successful loan mods, there won't be and prices will remain stable (I doubt they will rise much).
The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.
</blockquote>
What theory is this?
How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.
"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.
I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?
Since we're both water cooler "experts"... I think this is a fair request.</blockquote>
Gotta go to work! But, here's the most recent article I've seen on it. I'll try to find better cites later if needed.
"Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration?s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before."
"Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions."
http://www.cnbc.com/id/32630317</blockquote>
I read that post in the other thread too... but you left this part out:
<em>
While we have very strong loan modification programs now available, <strong>unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can?t solve...primarily unemployment and underemployment</strong>.
</em>
So even though BofA is trying to use loan mods as an excuse of why their foreclosure process is taking so long, they admit that their number of foreclosures will rise because people just don't qualify for the mods.
And I don't think a bank is going to come out and say "Yeah... we're delaying our foreclosure process because it's going to impact our capital ratios". Look at how those statements are phrased and you can sense there's no real sense of urgency from them to process foreclosures quickly. The comments in that article also come to the same conclusion that BofA isn't really being forthright in their statements. I know this is the Internet and we can't believe anything people say but here is one such comment:
<em>
I am Real Estate and Mortgage broker in Southern Ca; I believe that the statements that are being made by these institutions are inaccurate. I have knowledge of a BofA Countrywide asset manager who stated that in Southern Ca alone, they (the bank) was holding on to approximately 35,000 already foreclosed on properties that have not been released. Many of my counterparts that actively list REO properties have been extremely slow. Banks will attribute this to the 6 month 'moratorium', however many of the properties already foreclosed on prior to the moratorium are held in possession by these banks.
</em>
Now that number may be extreme but common sense just says there are way too many distressed properties as a result of the bubble out there... why are they not on the market? Does it make sense to you that inventory is so low when there are not that many qualified buyers out there? Where is everything going? Are all these people just underwater and not paying their mortgage and living rent free? It just does not compute.</blockquote>
Yes people are living rent free.
Two people that work in my company are doing it now.
One has not paid a mortgage to indymac in 18 mos and has no intention of modifying his loan and actually rents out a room to someone.
The other, I don't know who holds his mortgage, has not paid a mortgage payment in 13 months.
<strong>I read somewhere that only 9% of troubled loans are actually being modified.</strong></blockquote>
That's because the banks are just now getting the loan mod programs up and running, so they haven't modded many loans-yet. That's what the BoA quote in the CNBC article is saying.
Now, IMHO, the real question is, "After the loan mod programs are running full speed, what percentage of the pre-shadow inventory will get loan mods and won't redefault, and what percentage will eventually be foreclosed upon?"
I think the answer is unknown as of now. If very few loan mods are ultimately successful, there will (eventually) be a flood of REOs and prices will drop. If a lot of people get successful loan mods, there won't be and prices will remain stable (I doubt they will rise much).
