Upside Down Mortgage

Archive for December, 2008

Cdo Subprime

Question: Is Merrill Lynch like BearStearns in that they have losses tied to selling subprime CDO"s to their investors?

This is the fully worded Q that would not fit the Q -box: Is Merrill Lynch like Bear Stearns in they that they are another investment-wall street stock broker that participated in selling risky subprime CDO's to their investors for fat fees?
(note: CDO is the acronym for Collateralized Debt Obligations)

I ask the Q after seeing this news blurb: MERRILL SEEN POSTING 1Q LOSS ON WRITE-DOWNS

Oppenheimer analyst Meredith Whitney now sees Merrill writing down $6 billion and posting a $3 per share loss in its 1Q, and BernsteinResearch analyst Brad Hintz expects $4.5 billion in write-downs and a loss of $1.60 per share..
I have to note in connection to the informative answer to my Q, a beautifully explained answer, that we do NOT hear about Japanse or Middle East banks(fat on oil profits) going bust like here and in Europe! Ther must be a difference in philosophy or other elements at work.

Answer: I suspect that most, if not all, of those firms were involved to some degree in all those exotic "investments" that are causing so much trouble. Even the wiser firms that were skeptical and didn't want to were likely pretty much forced to because the others were doing it and (for awhile) they were profitable.

Avoiding that stuff would clearly have been the wise approach in the long-term, but would have meant less profits in the short-term. Since bonuses (and to a large extent stock price and therefore stock options value) are tied to short-term performance, there was significant incentive to participate for the short-term profits regardless of the long-term risk.

Act II: CDO's, Housing Prices and Subprime

If you're new around here, you might want to subscribe to our Upside-Down Mortgage RSS feed. It's quite likely the only feed of it's type on the internet!

Wells Fargo Loan Modification Number

As newspapers, regulators and consumers investigate how the entire subprime mortgage crisis began the current "Great Recession," there is a great deal of blame to go around. As California loan modification attorneys help homeowners avoid foreclosure, it seems everyone wants to point fingers.

Federal Government

One of the major challenges in trying to decipher the current real estate crisis is that a number of factors came together over a period of time to create this nightmarish scenario. There was an important law that was repealed under the Clinton Administration known as The Glass-Steagall Act of 1933. This law created a wall between certain kinds of banks, so that if one area of the financial world fell apart it would not impact every other area. This led to many banks buying each other until the financial world became like the accounting industry where there are a handful of megabanks that have all the sway. As a result, when Citi Group, Bank of America, Wells Fargo, JPMorgan Chase and a couple of others started to get into dangerous territory with the mortgage servicing arms, it had a ripple effect throughout the economy.

Wall Street

As any California loan modification attorney will tell you, the world's megabanks have had an incredibly negative impact on the world's economy. Between mortgage service companies such as Countrywide utilizing predatory lending tactics and banks such as IndyMac going out of business at an alarming rate, consumers, borrowers and homeowners were blindsided by Wall Street's activities. Each of the major banks has played an important role in the current economic crisis, as each adopted similar policies and tactics in their lending.

Wall Street further compounded the challenges most homeowners are facing by radically changing their lending policies and by taking months, and sometimes years, in responding to loan modification ,requests. This has been a one-two punch to borrowers who cannot get the credit they need to stay afloat during these tough times and who are being road blocked by certain banks.

The Answer?

An experienced California loan modification attorney might just be the answer people have been searching for. A qualified, knowledgeable California loan modification attorney can help analyze your situation let you know whether or not you are eligible for any loan modification programs and help you examine all of your options. While you could handle your loan modification on your own, or even attempt to contact a government approved nonprofit agency, a California loan modification attorney with a successful track record might just be your best bet. Trying to handle a California loan modification on your own might be too overwhelming, and many nonprofit agencies might be too overwhelmed with requests. A California loan modification attorney will provide top-notch legal advice, high-quality financial knowledge and help guide you in the right direction. A California loan modification attorney can even negotiate with the lender on your behalf, which will be a big help in getting exactly the loan modification
you need to avoid foreclosure and stay in your home.

Visit us at http://www.loanmodificationhelpcenter.org/ or call 800-486-9836.

Legal Disclaimer

The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guaranty, warranty or predict a similar outcome with respect to any future matter. Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.

About the Author:

I can be reached at my blog here Mandleman Matters

Article Source: ArticlesBase.com - Loan Modification Help Center – Can Homeowners Trust Washington to Oversee Wall Street?

puppycamrm7

Loan Modification Through Chase

One significant action doesn't need congressional approval and can make a big difference. You can't expect miracles unless you have a real plan. If you have wide-scale loan modification programs by lenders that were effective mortgage holders can stop the freefall and rebuild this country to a sustainable economy.

Some are frustrated that Congress cannot agree on what to do. Do you just bail everyone out and suffer the consequence? The FDIC has their hands full with INDYMAC and WAMU as well as several other small defunct banks. The unfortunate thing is they currently do not have the resources necessary to stop the record pace of foreclosures. The creators of these risky investment products wait for Washington to do something fast. The problem is Washington just can't move fast enough, and whatever they come up with will be too little too late to help home owners facing foreclosure. Wall Street firms and lenders, however, should ask themselves whether they have done enough to get their own act together; they don't need any more delays. They need to take action to help themselves, homeowners, and our economy.

 Last year, the Legislature enacted a 90-day "right-to-cure" provision giving homeowners more time to seek loan workouts before foreclosure. Our office has worked closely with lenders and mortgage services to use that time to offer sensible loan modifications to distressed homeowners. Because a foreclosure costs the lender an average of $50,000 in fees not to mention devalued real estate, preventing foreclosure is in everyone's best interests. While some lenders are reaching out to borrowers struggling with their mortgage most are scurrying to stay afloat. Countrywide Home loans now B of A, WAMU now JP Morgan Chase, CITI now backing off the troubled Wachovia to allow Wells Fargo to step in, it appears as if we are left with the four major banks in the country. Not to mention nearly all our failed brokerage houses now we have Goldman Sachs taking out hard money loans. What are the next steps, food and gas lines?  

Some banks may have modified some terms in some loans, but most lenders have failed to offer loan modifications in meaningful numbers. Most are simply unaffordable forbearance agreements that can't perform at all.  In the last three months, lenders issued 4,721 new foreclosure notices in Massachusetts alone. During that time, only 144 loan modifications were filed in the Registry of Deeds. We have reviewed those 144 modified mortgages and found that virtually none reduced the monthly payment owed by the homeowner. The latest report of the Multi-State Foreclosure Prevention Group for the period January through May 2008 confirms this dismal record. California and Florida's numbers are even worse, says Attorney Steven C. Feldman with the Feldman Law Center who provides loan modification services for troubled borrowers. Feldman goes on to say "We have see so many files come our way from clients failed in attempts to modify their home loans with loan modification companies or directly with their lender, the saddest part of it all is we get the loan modified to agreeable and affordable terms in as little as 3 weeks. If the lenders had the resources available to reach out and modify mortgages prior to default our country would be in much better shape. At the end of the day it's a numbers game; just do the math, 700 Billion is lot money!

Many families struggling to hold onto their homes and savings are not looking for charity or a bailout, and that is not what loan modifications are about. If they had true hardships that are one thing but bad investments from speculators is another.  Real loan modification programs by lenders, servicers, and investors are necessary to stop foreclosures, stabilize cash-flow on the mortgages owned by failing financial instruments, and help put a floor under the downward asset spiral that exacerbates the crisis in the credit markets.

The Bush administration's original plan of simply throwing $700 billion into the hole without putting a floor on the bottom would have wasted money and would not have worked. Representative Barney Frank and others in Congress have improved that proposal, and should be applauded for incorporating homeowners' interests. The proposal rejected by the US House of Representatives this week, however, did not do enough to require the scope of loan modifications necessary, and misplaced the cost of modifications on the taxpayers, rather than on the creators of the unsustainable loans.

An effective rescue package should require, as a condition of participation that current mortgage holders and servicers rewrite delinquent loans to avoid foreclosure when the borrower's current ability to pay will provide an income stream preferable to expected losses at foreclosure. Transferring of toxic mortgage products from the books of financial firms to taxpayers' books without systemic loan modifications first isn't the solution. Feldman Law Center as others are working with home owners facing default or foreclosure providing loan modification services but these struggling home owners are also being victimized by ex mortgage brokers and telemarketing scammers trying to squeeze the last bit of juice from these poor home owners. The bottom line is if you can't get the help you need from your lender then hire an attorney. The Feldman Law Center is a Law Office that specializes in loan modification services for struggling home owners. You can find them at www.feldmanlawcenter.com

About the Author:

The Feldman Law Center is owned and operated by Steven C. Feldman, attorney at law. Mr. Feldman has been a member of the California State Bar since 1983 and is well versed in federal
loan modification
law.

Article Source: ArticlesBase.com - Loan Modification - President Bush On Loan Modifications