Partial Release of Lien for Short sales

Inman News: 3 tips for leaving an underwater home behind

Since the onset of housing crisis, there has been instances where homeowners who were not in distress made strategic defaults in order to get out of underwater homes.  Although ethically and morally questionable, this  practice is still practiced. It takes careful planning to exit from your current home into next home. Here is an interesting article from Inman News about the topic.

Inman News:3 tips for leaving an underwater home behind.

HOUSING: Hours before short sale closes, bank forecloses

Another example of rampant banks'mistake of handling clients'record or just new attitude toward their willingness to foreclose of borrowers ?

HOUSING: Hours before short sale closes, bank forecloses

Have You Heard ? Financial Exemption for short sale is about to expire.

Fannie Mae, Freddie Mac OK limited principal reduction in California

Fannie Mae, Freddie Mac OK limited principal reduction in California

Nonprofit Counselors: Missing Link Between Borrower and Servicer?

By: Esther Cho 09/09/2012

Delinquent borrowers oftentimes make themselves as elusive and unavailable as possible when it comes to communicating with their servicers. During a panel at the Five Star Conference, industry experts discussed the reasons behind the difficulty in reaching borrowers.

Colleen Hernandez, CEO and president of the Homeownership Preservation Foundation (HPF), explained three main reasons why borrowers won’t respond or reach out to their servicer.
For one, when borrowers don’t have the money to bring their account current, then for them, it seems pointless to contact their servicer.

“They think that their servicer wants money, and, since a struggling homeowner often doesn’t have that money, they think, ‘What’s the point?’” said Hernandez in a follow-up email interview. “Additionally, many homeowners believe that calling their servicer will actually speed up the foreclosure process.”
A second reason is borrowers don’t know who to trust. With the countless scams that exist to target struggling homeowners, it can be difficult to know who is there to truly help.

Hernandez said that when she Googles foreclosure prevention every morning, she’s amazed by those who have morphed from yesterday’s name to today’s name based on headlines.
Hernandez said the third reason borrowers don’t reach out is they need help with more than their mortgage. Instead, they need a financial advisor who can look at the entire picture.

Additionally, Hernandez said, “What homeowners typically don’t understand is that, more than anything, servicers want performing loans and are often willing to explore ways in which they can bring a loan back to performing status and avoid a costly foreclosure.”
For borrowers, however, they are oftentimes in a situation where their loan has been sold several times to different servicers, in addition to the scammers reaching out to them.

To help borrowers get the information they need as they maneuver their way through confusing terrain, HPF is able to act as a bridge between borrowers and servicers.

“While many servicers now send out letters advising delinquent borrowers to contact them directly, they also recommend that homeowners contact a nonprofit housing counselor, like those available by calling the Homeowner’s HOPE Hotline at 888-995-HOPE. Homeowners often feel more comfortable speaking with someone who doesn’t have any ‘skin in the game’ and is providing honest, non-judgemental advice on what their options are, the potential impact on their family and their finances, and a lifeline to call for future questions,” said Hernandez.

Besides enlisting the help of a third-party counselor, another strategy to ensure borrowers get the information they need is face-to-face contact.
Jay Loeb, VP of Strategic Development at National Creditors Connection, explained that after the phone calls and letters have gone out and neither has worked, face-to-face contact can be another solution to engage borrowers.
[Editor’s note: The Five Star Conference is hosted by The Five Star Institute, DS News’ parent company.]

DSNEWS: Negative Equity and Its Impact on Current Loans

Negative Equity and Its Impact on Current Loans: Report

By: Esther Cho 09/10/2012

Eighteen percent of current loans remain underwater, according to Lender Processing Services’ (LPS) July Mortgage Monitor report. In states where the percent of current loans sitting underwater is extremely high, the percentage of new problem loans was also higher.

For example, the state with the highest share of new problem loans was Nevada, where 54.7 percent of current loans are underwater, followed by Florida (33.1 percent), Arizona (28.4 percent), and Georgia (42.8 percent).

LPS also examined the relationship between high loan-to-value ratios (LTV) and the likelihood of becoming a new problem loan. For loans that had an LTV greater than 150 percent, 4.4 percent went from being current to delinquent.

For loans with an LTV of 110-120 percent, 2.2 percent became new problem loans.
“As negative equity increases, we see corresponding increases in the number of new problem loans. In Nevada and Florida, two of the states with the highest percentage of underwater borrowers, more than three percent of borrowers who were up to date on their payments are 60 or more days delinquent six months later. This suggests that further home price declines – should they occur – could jeopardize recent improvements,” explained Herb Blecher, senior vice president of LPS Applied Analytics.

Overall, the delinquency rate for July was 7.03 percent, a yearly drop of 11 percent and a 30 percent decline from the January 2010 peak.

The percent of inventory in foreclosure stood at 4.08 percent and remained mostly unchanged both monthly (-0.2 percent) and yearly (-0.9 percent).
July saw about 186,000 foreclosure starts, down 10.5 percent yearly but up 7.1 percent monthly. There were about twice as many foreclosure starts as foreclosure sales or liquidations, which numbered about 93,000.

Foreclosure inventory in judicial states continued to be elevated at 6.46 percent compared to non-judicial states (2.38 percent). Also, foreclosure sales was much lower in judicial states, where 2.09 percent of foreclosure inventory went to sale compared to 6.71 percent in non-judicial states.