Orlando Short Sale Expert | Orlando Short Sales, Orlando Short Sale Realtor / Agent

Orlando foreclosure

It would be unfair to say that the Obama administration hasn’t been trying to restore the health of the housing market. Unfortunately, it would be inaccurate to say that its programs are having much success. The loan modification program is a worrisome case in point

On February 18, 2009 the Treasury Department announced the Homeowner Affordability and Stability Plan. The Loan Modification portion of that program had a goal “to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.”

August 4, 2009 the administration released its first monthly Servicer Performance Report which claimed that the program was “on pace.” It noted that by July more than 230,000 trial modifications had begun. By November, however, the administration announced a campaign to pressure mortgage companies because, said assistant Treasury Secretary, Michael Barr, “The banks are not doing a good enough job.”

Recently, a detailed report of the program’s progress was made available on the website . The report showed results through December, 2009. As of December, 66,465 permanent loan modifications had been granted. Another 46,000 had been approved but had not yet been accepted by the borrowers. Now, in many ways those are nice numbers; and many of us – not all, I know – would be happy for the borrowers. But, in the context of the entire situation, those numbers are rather paltry. Taken together they represent only 3% of the estimated eligible mortgages, and only 12% of the modification programs that have been started. More than ½ million trial modifications had been started by August; yet, by December almost 800,000 were still in the trial stage.

The slow pace and the low ratio of trial modifications becoming permanent modifications does not bode well for the administration to meet its goal of keeping 3 – 4 million borrowers in their homes over the next three years.

The problem isn’t a lack of participation by lenders. 107 servicers have signed up so far in addition to approximately 2300 lenders who service Fannie Mae and Freddie Mac loans. It is estimated that 89% of eligible mortgage debt outstanding is covered by participating servicers. Admittedly, though, their performance is uneven. Those who have the highest percentage of trial and permanent modifications are Citimortgage (47%), Saxon Mortgage Services (46%), and GMAC (44%). Not quite so stellar is Wachovia at 3%. Nine servicers have only offered modifications to fewer than 20% of their estimated eligible borrowers.

Nor do all borrowers find the modifications offered to be acceptable. 22% who were offered plans did not take them. There are no data as to why this is so. One can speculate though. For one thing, it is quite possible that eligible borrowers facing seriously negative equity will decide that, even with lower payments, it just doesn’t make sense to try to hang on There is no clear reason why the ratio of permanent modifications to trial plans is so low. Certainly bureaucratic inertia and interminably convoluted paperwork issues may have a lot to do with it.

In as much as plans have been offered to only 35% of estimated eligible borrowers, it would appear that one reason the program isn’t receiving its desired results is simply that many potential beneficiaries are not applying. There could be a number of reasons for this, many of them having to do both with ignorance of the program and with denial of the issues.

Many real estate agents do an exceptionally good job of communicating with the public. They can provide a useful service by making people aware of the attempts to resolve issues related to delinquencies and foreclosure. People should know that they can obtain a good deal of useful information by visiting the Making Home Affordable website at http://makinghomeaffordable.gov/

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Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange or Osceola County Florida and Orlando, Windermere, Winter Garden,  Kissimmee or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales

Q: The interest rate on my loan just adjusted to 9.25 percent last month. We are upside down on our house by 5 percent, so we aren’t sure we can refinance. I’m trying to do a loan modification, but am being told that I have to be late on my mortgage or the lender won’t work with me.

I am now current and don’t want to miss a payment just so someone will help me. The loan modification company I’m working with wants to charge me a fee of $1,700. Will this save my house? Should I spend this money?

A: I have good news for you. The good news is that President Obama’s new mortgage refinance program should help you if your mortgage is only 105 percent of the value of your property.

For example, if your house is worth $100,000, and your primary loan is $105,000, you can refinance your home as long as you have the income to pay the new loan. The home must also be your primary residence.

Lenders will work with you on this program to lower your interest rate so that it is no more than 31 percent to 38 percent of your gross monthly income. The nice part about Obama’s $75 billion loan program is that lenders and borrowers have an added financial incentive to keep paying these loans current.

Mortgage lenders will receive a “pay for success” fee of $1,000 for each eligible loan modification, plus additional fees of up to $1,000 per year (paid monthly) as long as the borrower pays on time. Homeowners will receive up to $5,000 (up to $1,000 per year for five years) to reduce the balance owed if they pay on time through these years.

The details of this plan were announced early last month. Please contact your lender as soon as possible. If your lender refuses to help, please call the Hope Now Hotline (toll-free 1-888-995-HOPE) and speak to a federally certified housing counselor.

There are many credit and loan companies out there claiming that they can help borrowers for a fee. Be careful in dealing with these companies. If you pay them almost $2,000, you may not necessarily be getting the best deal. You should first work with your lender, then call the Hope Now Hotline and talk to a housing counselor.

You need to become informed about your options. You may find that your current lender is now willing to talk to you. When you call your lender, ask to speak with their loan mitigation department, particularly if that wasn’t the department you were talking to. That department is the one that should be able to work with you on your issue. And, keep that $1,700 in your pocket for now.

Once you’ve discussed loan modification with your lender and they’ve denied you a loan modification most people think that there’s no hope and let the home go into foreclosure. There is another way to save your credit and keep a foreclosure off your record. That would be what’s called a Short Sale. That’s where we would negotiate with your lender to accept less than the full amount owed on your home so that you can sell it. We list your home with our listing agent and we have our professional negotiator, negotiate the transaction. Please contact us for more information. jerry@jerrylarose.com or 407-580-7011

Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit http://OrlandoShortSaleExpert.com or www.JerrySellsOrlando.com for your real estate needs.  Please give me a call if you have questions about the Orlando and Central Florida real estate market.

P.S. If you are listing your home as a short sale in Orange County Florida and Orlando, Windermere, Winter Garden,  or Ocoee Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Orange County Short Sales and Orlando Area Short Sales.