25 May 10 No 2nd Mortgage Modifications for Obama Loan Relief Efforts
According to the Huffington Post, 11 million homeowners owe more on their home loan than their house is worth, putting them “underwater.” Obama’s 2nd mortgage modification program has failed miserably because after one year and millions of 2nd loan candidates they have not modified even one second mortgage loan. This mortgage relief plan was supposed to reward mortgage servicers to coordinate principal reductions on second mortgage loans when the first mortgage is modified under the administration’s Home Affordable Modification Program.
In today’s upside-down market, homeowners who are stuck with under-water mortgages are seeking principal reductions. Many second mortgage lenders are actually lowering the principal for these borrowers because in many cases it is a better option than taking over the property from a foreclosure or surrender. Loan modification sthat simply lower the interest rate are often not enough for homeowners residing in these heavily depreciated regions like Southern California, Las Vegas and Phoenix, Arizona. According to Citi’s regulatory filings, about 28% of its first mortgages are now worth more than the underlying assets, along with about 42% of their second mortgages. Read the original article > Obama Second Mortgage Loan Modification Plan Failing
Tags: Home Affordable Modification Program, principal reductions, second mortgage loans
20 May 10 Should Fannie Mae and Freddie Mac Unify?
In a recent Mortgage Rates Pulse article, they re-stated the obvious — The mortgage industry continues to struggle. Even with 30-year fixed rate mortgage programs below 5%, we can’t fix the mortgage debacle simply by inducing another refinance boom. Most mortgage executives would concur that regulatory reform for mortgage financing is a “done deal” with this democratic controlled Congress and Senate. Yes we all agree there needs to be some checks and balances installed to prevent future home finance melt-downs, but the Obama Admin is out of control with their shallow and short-sided mortgage relief efforts. Most of the government initiatives look good on paper, but lack the inner back-bone to succeed. Read the entire Mortgage Rates Pulse article > Suggestions for Fannie Mac Mortgage Reform.
