Upside Down Mortgage

Archive for May, 2009

Subprime Mortgage Statistics 2008

Rising unemployment is throwing a wrench into the Obama administration's effort to reduce foreclosures and stabilize the housing market through various initiatives like “Making Home Affordable”. When the first wave of delinquencies and foreclosures started in the fourth quarter of 2006, it was centered on the risky adjustable subprime mortgages which, in many cases, were destined to failure due to the unsuitability of the borrowers. The majority of industry watchers at the time felt that defaults would be contained to those unsuitable borrowers, with a small percentage of Alt-A mortgages at risk as well. Underestimated at the time was the effect that unemployment, resulting from the first wave of foreclosures, would have on the rest of the mortgages, including those originated for prime borrowers. According to economists, the current accelerating wave of foreclosures is directly related to unemployment or underemployment which started with the subprime mortgage meltdown and has grown to engulf the entire economy.

Also assuming that the foreclosure problems would be contained to subprime borrowers, the Obama Administration’s foreclosure prevention and loan modification plans were "built around the subprime crisis model, not the unemployment crisis model," said Michael van Zalingen, director of homeownership services for the nonprofit Neighborhood Housing Services of Chicago.

The Obama program provides starting interest rates as low as 2% and financial incentives to mortgage-servicing companies and investors to reduce mortgage-related payments to the target of 31% of the homeowner’s monthly income. The jump in unemployment, however, has resulted in many borrowers that don't have sufficient income to qualify for a loan modification under the plan. Mr. van Zalingen said, “ …roughly 45% of the more than 900 borrowers who sought help at two recent counseling events would fall into that category even if their interest rate were dropped to 2% and their loan term were extended to 40 years.” Many of those who couldn’t qualify had recently suffered job losses or a reduction in income, Mr. van Zalingen said. Approximately 27% of borrowers who called the mortgage industry's national "Hope Hotline" in the second quarter of 2009 blamed unemployment as the first or second cause for their mortgage problems. That number was almost three times the amount of homeowners that cited unemployment as a major issue in the second quarter of 2008. "We recognize that unemployment is a significant complicating factor," said Deputy Assistant Treasury Secretary Seth Wheeler. "We are studying what more we can do." Unfortunately, it’s going to take more than study to stem the crisis. The administration is considering making changes to the Making Home Affordable plan to address the downward spiral of unemployment and the number of homeowners that are being knocked out of the plan because of it.

The administration is also contemplating whether stronger guidelines should be added to the plan concerning the way mortgage companies work with homeowners who are current unemployed but have good prospects re-employment. One option would take the form of a forbearance plan with incentives to lenders that could be offered to good employment prospects would allow them to miss a set number of payments while they seek work. The issue here is that setting the protocol for determining good employment prospects, what kind of caps would put in place, and figuring out how many payments could be missed is a circuitous process in itself which could take years to put in place. Other options include having the government pay a portion of unemployed homeowners’ payments, short term loans to newly unemployed homeowners, or loosening the requirements for home loan modifications in general. Nobody is claiming ownership of any of these ideas due to the complexity of getting multiple parties in agreement where some would be sacrificing more than others.

Making Home Affordable has run into multiple problems including an extremely slow rollout of the plan. Getting lenders and servicers up to speed on the plan’s guidelines while getting hit with a tidal wave of applications has led to frustration from homeowners and lenders alike. The dynamic between loan servicers and the mortgage investors behind them has also slowed matters to a crawl as they navigate issues like the recently passed safe harbor bill and the net present value test. The increasing unemployment rates and the related delinquencies comes as 20 mortgage-servicing companies are coming online with the ability to modify troubled loans under the Obama plan. While the Treasury boasts that more than 200,000 borrowers have received modification offers under the program, they recently declined to give statistics on completed loan modifications, saying they were fine tuning reporting systems. Industry watchers are saying that when home loan modifications get done they are producing positive results, particularly when legal counsel is brought in to lead the modifications for the homeowner.

Meanwhile, delinquencies are rising on a monthly basis and the foreclosure backlog continues to grow. The percentage of mortgages that had gone to at least 30 days past due but not yet in foreclosure climbed to a record 8.49% in May, up from 8.08% in April and 5.66% a year earlier, according to LPS Applied Analytics. These numbers are real and growing which has homeowners hoping that the government’s planning and theoretical thinking lead to an answer sooner, rather than later.

For more information visit: http://www.loanmodificationhelpcenter.org

About the Author:

Loan Modification Help Center is a free gathering place for resources and information on the rapidly evolving field of loan modifications.For more information visit: http://www.loanmodificationhelpcenter.org. California loan modifications / fdic loan modification / loan modification programs

Article Source: ArticlesBase.com - Making Home Affordable gets Thrown a Curve

Obama - McCain - Obama Will Win; The Economic Problem Is Why

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Mortgage Fraud Blogs

You hear all the time about bad SEOs. Bad SEOs are offering worthless services, failing to deliver on their internet marketing promises, polluting the search engine results—well, a lot of bad things. But how much ever gets said about bad SEOs' spiritual counterparts: bad SEO clients?

As an SEO, I can see things from the other side of the table. You see, despite trying hard to make it clear I'm a good, ethical, results-oriented, smarter marketing, white-hat SEO, I have gotten no end of inquiries from bad prospective SEO clients. Sure, no one who gets cheated is ever entirely to blame, and some cheated businesses are entirely blameless. But the bad SEOs would have too small a market to stay in business if it weren't for almost-as-bad clients.

Shades of Bad SEO Clients

First, let me make clear what I mean by "bad" SEOs. Bad SEOs are bad because they either do unethical things to get e-marketing results, or because they consistently fail to deliver results. A good SEO delivers results and does it without trampling over other people's rights (like submitting automated comments to their websites or trying to get good sites de-indexed).

A bad SEO client, in turn, is someone who will only be satisfied (albeit temporarily) with a bad SEO. Because they refuse to consider ethical web consultants or smarter marketing strategies, they are creating markets for the e-marketing charlatans and black-hats. There are two basic types of bad SEO clients: crooks and fool--oops, I mean, ethically challenged and judgmentally-challenged.

Ethically-Challenged SEO Clients

I haven't gotten so many inquiries asking for out-and-out unethical services. Still, I've been asked about blog-sp@mming software and other shady internet marketing tactics a couple times. A colleague shared this gem with me: "Have you thought about just scanning a book from the library and using it for web content? Or is that too high-risk?" (Seriously, someone asked him this.)

Of course, judging from the amount of comment sp@m and SEO-motivated hacking on the web, there is plenty of demand for this stuff.

Judgmentally-Challenged SEO Clients

A much larger group of bad SEO clients are simply those who insist on putting themselves in the way of fraud. Yes, that's right: I'm blaming the victim. Someone who goes looking for a $5 gold watch can't cry too long if the watch turns out to be fake or hot. With SEO, there are a few more nuances, but it's the same essential idea.

The overwhelming majority of these judgmentally challenged souls are private individuals whose only business is the business-in-a-kit variety. Yet they are also sometimes representatives of actual successful companies. The real businesspeople tend to be quicker to let their misconceptions go (after all, they can afford the real SEO alternatives), but not always. Let's look at some representative types of this group, straight out of my own inbox (note: these are inquiries from prospects, not actual clients).

1. Something-for-(Little More than)-Nothing Clients

Really, I tend to think these people should be in the ethically challenged group, but maybe that's just the remnant of my work ethic making me be mean There are actually two kinds of these clients:

* The ambitious but cheap client: "I'd like to get to the top of Google for the keyword, 'mortgage' so I can turn over $100,000/month in revenue. I can spend up to $1,000." * The Adsense-is-my-business-plan client: you wouldn't believe the numbers of inquiries I get from people who only plan to make money off Adsense or other on-site advertising—they don't even have a plan for getting repeat traffic, nor do they have content to synergize with the SEO effort. By buying promotional services, they would essentially be buying advertising in order to make money off advertising—you see where that could be a problem?

Another way of looking at it: why wouldn't I just create a site myself and keep all the profit from my efforts? In fact, most SEOs do have their own project sites, which are often monetized by Adsense. The money we could otherwise get from Adsense is one very low baseline for pricing our services. Legitimate SEO clients are typically selling goods or services at a profit rate that works out to ten or more times what they could get from Adsense.

In addition to the greedy, I also see a few other kinds of less common, but still problematic prospective SEO clients:

2. SEO-Starry-Eyed Clients: "Search engine traffic is definitely the best way for me to get pet-sitting clients in my tiny Himalayan village."3. The Little-Knowledge-Is-a-Dangerous-Thing Client: "Don't tell me about keyword research, content, anchor text, or natural linking strategy, just get me the PageRank (or links, keyword density, or whatever the fad is)."4. Gullible-and-Not-Letting-Go Client: "I know of at least two services that will submit my site to thousands of search engines for $29.95. If you can't do that, I'll take my business elsewhere."5. I-Will-Never-Trust-SEO-But-I'll-Consider-It-Anyway Client: "No one can guarantee a good search engine ranking so this is all pointless—I'll just go with that $29.95 search engine submission package someone just emailed me about. At least it's cheap."

In short, if you are going to find good SEO web consultants, you need: 1) realistic expectations; 2) a realistic budget; 3) solid information. Don't expect something for nothing, do a little reading, and it's much less likely you'll fall victim to bad SEOs.

About the Author:

Lee Rummage is a good SEO and internet marketer. Check out his seo firm website at: http://www.onlinewebconsultants.com

Article Source: ArticlesBase.com - Bad SEOs? What about Bad SEO Clients?

Rachel Dollar Mortgage Fraud Blog Update - July 24, 2009

upside down mortgage short sale

Question: If I stop making my mortgage payment, other than a hit on my credit what can happen to me?

We want out of the house that we are in and we want to move. We will never get out of our house due to the upside down market. If we walk or take a short sale what could possibly happen. My credit would be shot for a few years but my husband could put the new house in his name. What do you think?

Answer: Why did you buy a house you couldn't afford to begin with?

How Securitized Mortgage Loans Affect Short Sale Negotiation...