Upside Down Mortgage

Archive for June, 2009

Loan Modification Principal Reductions

Question: Does Bank of America do Principal Reduction on Loan Modification?

I am applying for loan modification with Bank of America. Currently they want to just lower my interest rate from 6.3% to 3.1% for a period of 5 years. What I really want is for them to lower my principal to whatever the house is worth right now (420k from 650k). Is this possible?

Answer: That's not going to happen. Why should Bank of America reduce the principal on your loan because your property value decreased ? That's not their fault.

The idea of a 'loan modification' is not to reduce your principal, but to make it possible for you to make lower payments so that you CAN eventually retire the full debt owed to the lender.

Loan Modification Principal Reductions and a Question

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Best Loan Modification Firms

Question: Loan modification firm scam?

Hi,
thank you for your time in viewing my post. Long story, short;

I hired an attorney/loan modification firm, in CA, in late August. Who said they can modify my mother's property, to get a loan modification. They had me pay $1,200.00 upfront, and another $1,200.00 in September. They pretty much had nothing, got no where. They had been giving me a runaround, ignoring my calls, seems like a one man show type firm. I had sent them check stubs, sign paper work, and no results. Pretty much the foreclosure is in effect (Oct 15.) and the lender does not want to offer a modification.

I feel like I been scammed, or this firm has done NOTHING in their end, they suggested "your mother needs to file Chapter 13 to stop foreclosure, or find an attorney who can do it". They did not modify anything.

Now I'm working with a REAL lawyer, who is stopping my Mother's foreclosure in 3 days (Oct. 15).

Is there anything I can do? to get my money back?

Thank you

Answer: This just happened to one of my family members. She had an attorney write the company a letter plus she notified the attorney generals office in the state she lives in plus the one the company is in. Both opened investigations and one of the states filed a law suit against the company on her behalf because what they were doing violated the state laws. She promptly got a refund. Of course this will depend on the laws in your state but I would definitely notify the attorney generals office.

Best Loan Modification Firm: Choose Wisely

Japan Housing Bubble Chart

The reaction of mainstream analysts to the events of last spring and summer was as amusing as it was predictable. As soon as commodity and metals prices weakened, they were out in droves, tut tutting and warning the great unwashed that we had seen the top of the cycle. They patiently explained to those too dim to

understand their market insights (which included us, I suppose) that the "abnormal" commodity markets were coming to an end and the "bubble" had burst.

It is to laugh. These articles did not surprise me. Many of the best known market strategists and market generalists have not understood this cycle from day one. Anyone who makes even a cursory study of commodity markets could see that there was something very different about the current cycle. The opinion of many commentators and business journalists is that most commodities, but especially metals and energy have not been acting in a "predictable" fashion. Their definition of predictable is a short cycle that passes through phases of under production, shortage, price increases, production scale up, oversupply and price collapse.

This cycle is not different from all others; it's just different from the garden variety economic boom and bust cycle. It actually looks pretty normal so far compared to past secular commodity bull markets. Those don't come along very often. There have only been a couple true secular commodity cycles in the past century prior to this one. So generalists can be forgiven for gloating about the demise of the "old economy sector", even if its based on an ignorance of the data.

The generalist view was based solely on the strength and speed of the up move this spring. They believe that it had to be a bubble because things moved too fast. There is some truth to this view. The momentum buying -and selling- they exhibited was scary. Scary enough in fact that i think it influenced the world's major central banks. There were real concerns about inflation and the economies of both Europe and Japan were accelerating quicker than expected. I think central bankers were also worried about markets getting carried away by speculative money their loose monetary policies created. In response, central bankers sucked an enormous amount of liquidity out of the system in the second quarter. That led to a lot of trades, especially leveraged hedge fund trades, getting unwound. That is where most of the selling came from in commodities and emerging markets. Keep in mind that in most commodity and futures markets the speculative money far outweighs the trades of "real" suppliers and buyers. It always has and it always will. That didn't make the nose dives less real or painful. Nor does it mean that buyers won't use the price cuts to advantage. It does mean the price drops were driven at least as much by trading considerations as by supply and demand. They were trades. There have been no mountains of copper or nickel or lakes of crude oil appearing in front of NYMEX or the London Metal Exchange. Where inventories changed at all in the past two months is has been to the downside. The cycle is intact and supply still needs to catch up to demand in most metals. As long as synchronized growth in North America, Europe, Japan and BRIC (Brazil, Russia, India and China) continues, the balance between supply and demand will be tight. This did not change just because traders saw bearish chart signals. It's worth noting that metals that do not have developed forward markets and that are not "traded" like tungsten, uranium and molybdenum did not see much of a down move in this period.

Some commodities may not exceed their May highs but most will. Oil already did thanks to political tensions and the start of hurricane season. Nickel already has thanks to tight supply and zinc probably will for the same reasons. Copper may not, but it will also not see prices anything like old cycle lows for a very long time, if ever. Silver, as we predicted, fell harder once an expected "ETF Lift-off' didn't materialize but it has bounced and started climbing. Gold has too. We still have inflation concerns. I'm very concerned about just how much drag the US housing market creates. Remember though, that one of the lasting changes from this cycles is that the US will be less dominant in most markets. It actually already is, but it will take time for traders to accept that. If the US can hold to a slower growth track without over shooting rates, the rest of the world can take up the slack and keep this party going for a while. If the Fed really is done the Euro and Yen in particular will keep gaining. This will add to the upward pressure on metals prices - especially gold and silver.

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Fine, Totally Fine - Japanese comedy - trailer NYAFF 2008