Mortgage delinquencies back on the rise?

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When the government intervenes and creates programs that attempt to help homeowners, such as the Home Affordable Modification Program, mix results can happen. In this case, 865,000 homeowners were helped with their underwater mortgages. However, almost 1/2, 306,000, ended up … Continue reading

Starbling Loan Modification Series: Part IV

Headlines: First Family Home to be Sold Via Short Sale…If Only the Lender Had Listened

It’s early April, 2010, and I have received an email from Jeff Starbling. You may remember the story, no, the saga.  For those just tuning in, here is a quick recap.  Jeff and his wife purchased a townhouse in Florida for $200,000 at the height of the housing boom. Bank of America (BOA) held both the first and second mortgage, $160,000 and $40,000, respectively.  It was the classic ‘no money down’ purchase with a higher interest rate of 8%.

After purchasing the home, the Starbling’s welcomed a new baby to the family.  Soon after, Jeff’s wife lost her nursing job. They began having problems paying the mortgage due to the lack of income and certainly couldn’t sell the home, as the market values in the area had dropped by 30%. Instead, the Starbling’s decided to apply for a loan modification, widely touted as the answer for many struggling families.  After 5 months of negotiations, the news from the lender was not what they wanted or expected to hear.  The Starbling’s were rejected – due to the home being listed for sale. After exhausting every option available, the Starbling’s gave up on BOA and decided to move out last fall.

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America’s Foreclosure Crisis – Part III of the Starbling Story

On July 16th, I wrote Part II of the series on Jeff and Tiffany Starbling, the Florida couple who was working through the morass of the loan modification process at Bank of America/Countrywide. At that time, they had been in the “process” for over two months and despite the help of a very experienced attorney, Jennifer Shiffer, at the law firm of Pels Anderson PLLC in Bethesda, Maryland, they had yet to receive any formal notification from BOA/Countrywide that their loan had even been assigned to a loan modification specialist. The Starbling’s account had gone delinquent as of July 1st and was in the never ending repetitive quagmire of repeated calls from Shiffer, only to hear “we have nothing to report at this time, your case is being assigned and we will let you know”. Throughout July, August, and into September, the Starblings waited and waited to no avail. Continue reading

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Nero Fiddles, While Rome Is Burning

Part II of the Starbling Loan Modification Process – A Personal Look Into the Country’s Loan Modification Crisis

I really don’t want to be dramatic about a subject that is so serious. But my sense is that in today’s day and age, without drama, there is no real news coverage. While every network in America covered Michael Jackson’s funeral, they should be screaming from the hill tops about the crisis in loan modifications, because soon, this will crisis will reach epidemic proportions. And while I think Jackson’s music will always live on, many Americans’ dreams of homeownership are dying every day.

I have chronicled the story, thus far, of the Starbling family from Florida who bought a home in 2006 only to have its value drop by over 35%. To recap, Mrs. Starbling gave birth to their first baby this last spring, but with benefits running out last month, they have been unable to make the payments on the house. Since they put virtually no money down when they bought it, a traditional sale of the property is not an option. They have contemplated just giving the keys back to the bank, but opted to first see if they could get their loan modified, since they would like to stay in the house. Continue reading

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Loan Modification Process Wastes Valuable Time

What lender is dumb enough to modify a home loan and not reduce the monthly payment for the homeowner? How about almost everybody!  When you are bleeding to death, the doctor doesn’t suggest an IV!  The first order of business is to stop the bleeding.  So, why in the world would a lender modify a delinquent homeowner loan and not reduce the monthly payment? Shockingly, and against all common sense, this was apparently the norm last year.

Today, in an interview on CNBC, Federal Housing Finance Agency (FHFA) Chairman James Lockhart, stated that last year only 16% of loan modifications completed by their agencies (which include Fannie Mae and Freddie Mac) reduced the homeowner’s monthly payment. With that statistic, is there any question why 55% of these loan modification recipients went into default within 6 months?  This was a terrible case of wasted effort and wasted time, when there is no time to waste.  Continue reading

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