Upside Down Mortgage

Posts Tagged ‘statistics’

Subprime Analytics

Fitch Ratings has put out a report examining the effectiveness of loan modifications in terms of keeping homeowners out of foreclosure. Their findings make the initial reports of massive failure rates seem like the good old days. Reports that had come out earlier in year found that fifty percent of modifications done in the first half of 2008 had gone back into default by year-end. The new study by Fitch estimates that between 65% and 75% of modified subprime loans will become 60-days or more delinquent again within a year of the loan modification.

Feldman Law Center Ripoff - Modifications

Modifications can combine lower interest rates, maturity date extensions, changing from adjustable to fixed interest rates, and the reduction of principle. Of the four, principle reductions are statistically the best way to ensure the long term success of a loan modification. According to LPS Applied Analytics, modifications that included principle reductions have a 25% lower refault rate than those without a reduction. Fitch's numbers concurred with those numbers, finding that modifications with principle reductions had a 40% to 50% chance of a refault. Not surprisingly, Fitch found that modifications where loan principle was increased due to missed payments and penalties being added to the backend of the loan had a refault rate of 60% to 70%

At issue is whether homeowners going it alone in negotiations with lenders are getting enough in the way of concessions to make their modifications sustainable. The do it yourself modification typically takes into account only the homeowners income in relation to a modified payment. Lenders, who are trying to mitigate their own losses during the negotiation process, aren't volunteering to give more than what the homeowner is negotiating for during the process so the modification ends up buying time but not much else. Additional consumer debt and other expenses are often not factored in to the negotiations leaving the homeowner with a continuing monthly payment deficit which then leads to re-default.

Feldman Law Center Ripoff - Solution

One solution to this problem is for the homeowner to retain professional counsel to both analyze the total financial picture and to negotiate the modification according to what is going to work within the specific circumstances of the homeowner. The objectivity and experience of a professional negotiator will undoubtedly yield better a better outcome for the loan modification, which in turn will result in a sustainable monthly payment.

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.
Feldman Law Center Ripoff

About the Author:

Claude Adkins is the author of felman law center. For more information visit us at http://www.youtube.com/watch?v=_im-6FjAFW4. Feldman Law Center, headquatered in Mission Viejo, CA specializes in loan modification and debt settlement, helping people keep their homes!

Source - Do Loan Modifications Work?

Silicon Valley Bank: The U.S. Government Is Responsible For Sub-Prime Mess, Not Wall Street!

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Mortgage Help From Government

Question: Did government have anything to do with the Mortgage mess?

Everyone knows that Wallstreet knew the mortgages were predatory loans to ensure big profits. Do you believe government went along with it to boast short-TERM construction, GDP, jobs and political stability? Is there enough potential GDP in America today to sustain our standard of living and political stability?

Answer: In a sense, the government had established a policy of affordable home ownership and that encouraged mortgage brokers and financial institutions to develop products that enabled people who previously could not qualify for mortgages to easily obtain one.

5 Standards for Solving the Mortgage Madness

Subprime Statistics

Question: Does anyone have any interesting facts or statistics about the subprime loan fiasco going on?

I would like to know some of the interesting details that effect the market. Thanks folks!

Answer: Ask anyone with a statistical degree and they will give you a pretty interesting story. I was lucky enough to hear part of it today. It seems that this isn't the economy at all. IT is the loans that were written in 2003/2004 that hit the adjusting time frame so that they are higher now and the people who committed to paying them may not have received the raises or whatever they had planned on happening didn't happen so we may see even more hit in the next year than have happened so far but, it is old news. Not new news! The mortgage industry could have predicted this would have happened and perhaps there was a bit of greed involved. I do know that the industry is scrambling to find away to help the people who are looking to buy today. We had a suggestion from our favorite lender today that said simply-look at the FHA products-they aren't as big a pain as they used to be. He also cautioned us to not expect 100% ffinancing for people who are in the 500's for their credit scores-not out there anymore. Hope this helps a bit. Good luck if you are moving. I can refer you if you have a need for it.

Ron Paul: The Entire Economic System is Subprime