More Loan Modifications involve principal reduction than in the past.

By -

10% of loan mods that occurred in the last quarter involved forbearance (where a portion is set aside on which no interest is charged but has to be paid off upon sale) or principal reduction.

I also got a chance to meet SVP’s at BofA, Chase, and Wells Fargo at the C.A.R. show this weekend, and they all said they’re getting better at it. However the decision to grant a loan modification is still based on a business decision. That does the Net Present Value of the new Loan exceed what the property would net the investor in foreclosure. If yes, than loan modification is the answer.

Also both the BofA and WF rep confirmed the recent increase in deferment of foreclosures is because the Obama government (ala Treasury Dept), is pressuring the banks to attempt loan modifications if requested.

One other interesting tid bit was I got was even though currently the loan mod decision is a business decision, this could change in the future and will depend what direction the government pushes the banks.

Read the full story here at the Wall Street Journal.

Please comment on your experiences.

Sunil Sethi
SMA Realty

Comments

Post a Comment

Popular posts from this blog

Mission Lakes Neighbors Ask Union City Mayor and Council to ​Rethink East West Connector

By -
Tomorrow ​ (2/27/18)​ will be your LAST, but also BEST opportunity to stop the East West Connector as currently planned.   The city council was trying to rush this decision through quietly.  But this is now receiving the attention it deserves.  Mercury News blasts funding diversion from Rail to Highway: https://www.mercurynews.com/ 2018/02/26/union-city-looks- to-divert-75-million-in- public-transit-funds-for-new- 320-million-road/ Bike East Bay declares Opposition to East West Connector Proposal: https://www.mercurynews.com/ wp-content/uploads/2018/02/ bike-east-bay-opposition-to- east-west-connector-proposal. pdf East Bay Times provides additional information on UC fiscal emergency: https://www.eastbaytimes.com/ 2018/02/22/union-city-council- to-weigh-fiscal-emergency- declaration/ The East West Connector has been on the books since the 60s and reflects the thinking of that era.  This $320M road is oversized.  This 90ft wide road will cross the Old Alameda Creek twice and will const
Read more

Fremont's New Housing Legislation is another step in the right direction!

By -
Image
Fremont has now taken another step into the future, requiring that all new houses be delivered ready for the installation of electric-car charging stations.  According to the  East Bay Times , the city of Fremont has announced that any new housing project must include both solar panels and the electrical wiring required for the installation of a charging station Will this new legislation make the ownership of electric vehicles even more appealing to residents? Will Fremont turn into a zero-emission vehicle hub? http://www.greencarreports.com/news/1110317_solar-panels-ev-chargers-required-in-new-homes-in-fremont-ca Sunil Sethi  /  REALTOR,  Broker, MBA, CPA(inactive), GREEN Sunil Sethi Real Estate   38750 Paseo Padre Pkwy #B3, Fremont, CA 94536   www.sunilsethi.com BRE #01173766                              
Read more

how to lower your Modified Adjusted Gross Income to qualify for the $8000 1st time home buyer credit

By -
A client was asking my how they could reduce they MAGI (modified adjusted gross income), below the $150,000 threshold for Married Filing Jointly. The answer was I don't practice as a CPA anymore. Having said, that I was still curious, so the the only way to reduce MAGI which is AGI (line 37 on the bottom of page 1 of the 2008 form 1040) is to reduce taxable income (defer income or increase 401k withholding) or increase the deductions to get to AGI (which are IRA, SEP and Healthcare account deductions). Take a look at the 1040 Form Or one could choose to quit working or take some unpaid time off - hey it's worth considering. If anyone other ideas, please do share. FAQ on the $8000 credit
Read more