Oh, The Stories We Hear
December 6, 2011
As professional real estate agents, we can be in the thick of the human costs of the real estate crisis. Homeowners come to us with questions about foreclosure processes, short sales, loan modifications and deed-in-lieu. Even with the many educational opportunities that are offered by the California Association of Realtors and the National Association of Realtors, we share in the helplessness of these upside down homeowners.
Yes, some of them brought it on themselves when they refinanced at the peak of the market and took equity from their homes. However, some just purchased a home at the peak of the market. Most find themselves with a total equity loss and even with a loan that exceeds the present value of their property.
The government continues to propose programs to aid the homeowners who want to retain possession. Thus far most of these programs have not worked very well. Unfortunately when a lender is contacted by the homeowners they are told that they cannot have a loan modification unless they have missed payments. The homeowner follows this direction and then a program comes out that says the homeowner must not have missed payments.
Even after at least three years of the real estate crisis, it would seem that lending/banking industry has not figured out how to turn these upside down loans into positive assets for the lending banks. It is still taking 6 months for a short sale from most of the major lending institutions. Loan modifications are pretty well impossible to obtain and homeowners who were otherwise good borrowers are stopping their payments.
Why not modify a loan to the current market value of the home. Request shared equity or a note that gives the lender any additional monies if the property is sold for more. There must be a way.
As professional real estate agents, we can be in the thick of the human costs of the real estate crisis. Homeowners come to us with questions about foreclosure processes, short sales, loan modifications and deed-in-lieu. Even with the many educational opportunities that are offered by the California Association of Realtors and the National Association of Realtors, we share in the helplessness of these upside down homeowners.
Yes, some of them brought it on themselves when they refinanced at the peak of the market and took equity from their homes. However, some just purchased a home at the peak of the market. Most find themselves with a total equity loss and even with a loan that exceeds the present value of their property.
The government continues to propose programs to aid the homeowners who want to retain possession. Thus far most of these programs have not worked very well. Unfortunately when a lender is contacted by the homeowners they are told that they cannot have a loan modification unless they have missed payments. The homeowner follows this direction and then a program comes out that says the homeowner must not have missed payments.
Even after at least three years of the real estate crisis, it would seem that lending/banking industry has not figured out how to turn these upside down loans into positive assets for the lending banks. It is still taking 6 months for a short sale from most of the major lending institutions. Loan modifications are pretty well impossible to obtain and homeowners who were otherwise good borrowers are stopping their payments.
Why not modify a loan to the current market value of the home. Request shared equity or a note that gives the lender any additional monies if the property is sold for more. There must be a way.
posted by shirley harry at 9:39 AM
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