Short Sale Tip of The Week 7-29-09

Posted on 30. Jul, 2009 by ctlms in Short Sale, foreclosure

Loan Modifications...So what's the deal?

We have heard a lot about loan modifications in the news this year.  The government has come out with a litany of new programs aimed at helping struggling homeowners to avoid foreclosure.

However the numbers so far do not show a stem to the foreclosure crisis.  In the first half of this year there have been more than 1.9 Million foreclosure fillings nationwide.

Part of the reason these programs are not working as desired is that they were developed by Congress not mortgage professionals.  The programs are Pass or Fail type  programs.  The mortgage servicer enters in some data about the homeowner and the system says yes or no.  That's it, there is no manual underwriting averrable for these programs.  If the income is too high or to low, you fail.  If you debts are too high or too low, you fail.

The other reason for the lack of results is that only Fannie Mae and Freddie Mac are the only investors that the Government can dictate these guidelines to.  Additionally any banks that took TARP money have to participate.  But this has obviously not been enough so far.

The good news is that there is the "Old School" way of doing loan mods that  complete bypasses these programs and has had a much higher likelihood of success for many years.  Loan mods are nothing new, they are just more publicized now then they ever were before.

As a real estate professional you are likely one of the first people on of your past clients will call when they are in trouble with their house.  As much as making a commission is important, helping the client should be first priority.  If they want to, and can afford to save their home, we all should do whatever we can to help them.  You could never have a better referral source than a homeowner you helped stay in their home when they were struggling.

My company can offer this service to your clients well as as the short sale processing services we provide.  We have aligned ourselves with the nations top loan modification service.  We can let your client know within 24-48 hours if they fit the qualifications for a loan mod.  If they do not, then you probably have a new short sale listing on your hands and we can help there to.

Either way you have looked after the best interests of your clients, and they will thank you for it.

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