Tag Archives: Reductions

Partnering with Addvent Funding, a Provider of Motgage Principal Reductions, Can Be Much more Advantageous then Working with a Loan Modification Organization

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Tampa, FL (PRWEB) April 26, 2010

The most current housing statistics indicate loan modification could not be adequate a principal reduction could be the only answer to address anticipated increase in foreclosures. Addvent Funding publishes present housing market statistics, hoping to educate current property owners on what actions they can take to reclaim lost equity.

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The most current statistics released about loan modification and unfavorable equity indicate lenders may possibly want to speedily re-consider their refusal to provide mortgage principal reductions if they want to avoid monumental and systemic foreclosure prices.

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According to the OCC and OTS Mortgage Metrics Report for Q4 2009, here are the sobering details about the relative ineffectiveness of loan modification hence far:&#13

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The report covers practically 34 million loans totaling almost $ six trillion in principal balances and gives data on their functionality via the finish of the fourth quarter of 2009 (December 31, 2009).&#13

All round mortgage efficiency declined for the seventh consecutive quarter, with the percentage of current and performing mortgages falling to 86.four % at the end of the fourth quarter of 2009.&#13

This decline is attributable to the 21.1 percent improve in mortgages 90 or much more days past due to 4.7 % of all mortgages in the portfolio at the end of 2009. The increase in seriously delinquent mortgages was most pronounced among prime borrowers, where the quantity of seriously delinquent mortgages improved by 16.five % throughout the fourth quarter.&#13

all round re-default prices remained high with more than half of all modifications falling 60 or much more days past due by 9 months right after modification, and more than half of all modifications have been 90 or much more days past due by 12 months following modification. Nearly 40 percent of modifications that had lowered month-to-month principal and interest payments by much more than 20 percent have been 60 or much more days previous due 12 months soon after modification.

Even though loan modification is the hot subject among members of the federal government and the common media, statistics show the most substantial aspect contributing to the depressed housing marketplace is the overwhelming presence of negative equity. Adverse equity is a term that describes the situation when a homeowner owes a lot more in debt on their house than the present market value of the house. The difference in between what is owed and the worth of the home is referred to as negative equity.

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Negative equity impacts 1 in four homeowners with a mortgage in our country according to information compiled by 1st American Core Logic and published on February 23rd 2010. Right here are some far more statistics from the 1st American Core Logic report that speak to the depth and severity of adverse equity:

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Initial American CoreLogic reported nowadays that more than 11.3 million, or 24 %, of all residential properties with mortgages, were in unfavorable equity at the end of the fourth quarter of 2009, up from ten.7 million and 23 % at the end of the third quarter of 2009.&#13

An added 2.three million mortgages had been approaching negative equity at the finish of last year, which means they had much less than 5 percent equity. With each other, unfavorable equity and near-damaging equity mortgages accounted for almost 29 % of all residential properties with a mortgage nationwide.&#13

The net enhance in the number of unfavorable equity borrowers in Q4 2009 was 620,000&#13

The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a main issue in altering homeowners default behavior. Once unfavorable equity exceeds 25 %, or the mortgage balance is $ 70,000 higher than the present home values, owners begin to default with the same propensity as investors.&#13

The aggregate dollar value of unfavorable equity was $ 801 billion, up $ 55 billion from $ 746 billion in Q3 2009. The average negative equity for an underwater borrower in Q4 was $ 70,700, up from $ 69,700 in Q3 2009. The segment of borrowers that are 25 percent or more in negative equity account for over $ 660 billion in aggregate adverse equity.

And this quote from Mark Fleming, chief economist with FA Core Logic, sums up what to anticipate for the close to future:

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“Negative equity is a significant drag on both the housing market and on financial growth. It is driving foreclosures and decreasing mobility for millions of homeowners. Since we anticipate property costs to slightly improve in the course of 2010, unfavorable equity will stay the dominant issue in the housing and mortgage markets for some time to come.

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So what is the answer to dealing with the escalating crisis of adverse equity and the relative ineffectiveness of loan modification? It would appear the only plausible conclusion is for lenders to consider principal reduction in an effort to bring mortgage loans more in line with property values.

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There are a number of businesses starting to leverage this details in a manner that makes it possible for them to negotiate principal reductions and lessen mortgage amounts for qualified home owners. Whilst numerous of the information of this procedure are proprietary in nature, the idea is equivalent to a private investor approaching a lender with a large inventory of REOs (True Estate Owned properties) and negotiating the purchase of a portfolio of these loans at much less than face worth of the debt owned on them, a practice that is commonplace in todays volatile actual estate market place.

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Addvent Funding is a Tampa, FL primarily based firm that engages in this kind of portfolio quick-refinance strategy. As a business primarily based in Florida, Addvent Funding is strategically located at ground-zero of the adverse equity crisis, as Florida is amongst the prime 5 states in virtually each and every statistical category relating to the impact of adverse equity. Addvent Funding and its affiliates identify homeowners that could qualify for a mortgage principal reduction, then go via the essential processing steps to prepare certified clients to have their mortgages incorporated in a portfolio for negotiation with a lender.

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The result of this negotiation is normally a principal reduction of the borrowers mortgage principal balance down to the existing market worth of the property. In turn, the lender receives a much needed infusion of capital and is capable to off-load a severely beneath-performing asset, and the elevated capital in turn assists the lender to resume normal lending practices.

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Workplace of the Comptroller of the Currency&#13
Office of Thrift Supervision

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Strategic Asset Solutions Indicates Rising Willingness Of Lenders To Accept Principal Reductions Of Industrial Real Estate Loans

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Woodland Hills, CA (PRWEB) August 11, 2010

Commercial actual estate lenders normally are motivated to safe a non-recourse loan by adding a powerful guarantor, stated Kevin Levine, Executive Vice President of Strategic Asset Services (SAS) of Woodland Hills, California a business that specializes in industrial workouts and quick sales. In a workout situation they could even be prepared to minimize the principal balance, in exchange for a complete-recourse guarantee by a financially solid guarantor. However lenders in no way will lessen the principal obligation without acquiring some thing of significant value in return.

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Levine explained that SAS recently was capable to negotiate a reduction of a industrial actual estate loan with a principal balance of $ four.7 million to $ three million. The lender performed its own valuation analysis, and agreed with our conclusion that the property securing the loan was not worth much more than $ three million and really possibly considerably much less, Levine said. The creating had been unoccupied for some time, and the borrower had provided notice to the lender that it would not continue to make the big month-to-month mortgage payments out of his personal funds, plus pay the house taxes, insurance coverage and ongoing upkeep expenses on the property. So the lender was faced with foreclosing on an empty building and holding it for an indefinite period of time, or accepting a new principal balance of $ three million but with a complete-recourse assure assuring ultimate recovery of that amount.

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Each lender has its personal internal policies and procedures, and organization culture, Levine explained. Some lenders have policies in spot that definitely prohibit getting into into a principal reduction with the existing borrowers. In these circumstances, we often can negotiate a short sale or note buy to a third celebration. In other circumstances, the lender has no formal policy prohibiting a principal reduction but the organization culture is resistant to such a outcome, and we have to present a compelling case as to why this is the best course for the lender to comply with in order to maximize its recovery in an already poor scenario. Typically there are multiple levels of authority to be convinced: loan officers, asset managers, problem loan committees, and board of directors.

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SAS (http://www.strategicworkouts.com) gives commercial loan modification and short sale services in California and all through the country. The organization is dealing with multi residential, retail, offices, industrial, land and its specialists bring extensive industrial real estate knowledge to each and every assignment, like marketplace evaluation, valuation, legal, and negotiation knowledge. Each borrowers special lending circumstance is totally analyzed, and the borrower is assisted in preparing existing operating reports and projections. Primarily based on the detailed analysis, SAS submits to the lender a loan modification proposal. That proposal may possibly consist of a principal reduction, interest rate reduction, and waiver of penalty charges. In those situations where a loan modification will not function to the mutual advantage of the borrower and lender, SAS will try to broker a short sale of the commercial real estate at a significant discount from the loan balance, or will seek to negotiate a sale of the note to a third-celebration.

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SAS is a member of the Peak Corporate Network (http://www.peakcorp.net) headquartered in Woodland Hills, California. In addition to industrial loan modifications, PCN provides mortgage lending, loan servicing, residential brief sale, 1031 exchange, trustee perform, foreclosure solutions, Escrow and actual estate sale brokerage solutions. These solutions are accessible mostly throughout the Western United States for both residential and industrial real estate properties and loans.

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FHFAs Hard Call on Underwater Mortgages and Principal Reductions and the Motives Why

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Minnepolis, Minnesota (PRWEB) August 02, 2012

Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA) which oversees Fannie Mae and Freddie Mac, lately stated “Nowadays, I offered a response to several congressional inquiries as to regardless of whether the Federal Housing Finance Agency (FHFA) would direct Fannie Mae and Freddie Mac to implement the House Inexpensive Modification Program Principal Reduction Alternative (HAMP PRA). FHFA has concluded that the anticipated rewards do not outweigh the costs and dangers.” As the U.S hears this decision, it might not be easy for distressed homeowners to be told “no” and neither is it simple to say “no”.

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Spending, or lowering principal owed, has instant gains. However, taxpayers will in the end have to pay for mortgage principal reductions. As of the finish of 2011, taxpayers had currently spent practically $ 185 billion to hold the mortgage giants afloat. Residence Destination has a number of inquiries. What can taxpayers actually afford in the balance of it all? Ought to we be reorienting the very first loss order for underwater mortgages?

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DeMarco’s letter to Congress two days ago says, “Although analyses show a advantage to the Enterprises from employing principal forgiveness, the benefit to taxpayers varies from negative to constructive based on the DTI distribution. This additional illustrates the sensitivity of the model-based results to specific assumptions.”

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The letter come to the point by saying, “The beneath-reported story via the housing downturn has been that despite the number of people underwater on their mortgages, the vast majority have continued to spend their mortgages, meeting their contractual obligations. For instance, around 80 percent of the Enterprises underwater borrowers are existing on their loans. Even so, regardless of most underwater borrowers remaining existing on their mortgages, we have also seen borrowers default on their underwater mortgages with out apparent disruption to their other monetary obligation, and different commentators have truly encouraged such strategic default.

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DeMarco’s letter states his forethought and posture to strengthen Fannie Mae and Freddie Mac in that he “previewed for Congress numerous housing-connected initiatives to strengthen the loss mitigation and borrower help efforts of Fannie Mae and Freddie Mac as effectively as increase the operation of the housing finance marketplace.” These initiatives contain:

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1) new and consistent policies for lender representations and warranties&#13

2) alignment and simplification of the Enterprise short sale applications&#13

3) additional enhancements for borrowers hunting to refinance their mortgages.

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It is no light matter to go at odds with Treasury Secretary Timothy Geithner. Public records show that DeMarco has assistance from higher ranking Republican members of Congress, “like Senator Bob Corker (R-TN),Representative Darrell Issa (R-CA) and Representative Spencer Bachus (R-AL)”, as reported by Frobes. They concur with the logic behind his difficult selection and continue searching for how taxpayers can greatest carry the burden of assisting underwater property owners. Along with numerous housing analysts, the American Bankers Association(MBA) has also taken a stance that defends DeMaco and continues to look for much better lengthy-term options that would make credit much more accessible.

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FHFA has created the determination that the long-term national fees of a widespread principal reduction plan are unlikely to outweigh what could be a short-term gain for a couple of choose borrowers in specific states,” declared David H. Stevens, president and chief executive officer of the MBA. “We agree that principal forbearance can aid borrowers recognize a payment reduction in a comparable way as principal reduction. It is crucial to implement solutions that support the American homeowner without incurring the unfavorable lengthy-term effect of generating credit less available and much more high-priced.”

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This should be optimistic for housing by taking off the table the threat of a wave of defaults by borrowers seeking to get principal reduction, Jaret Seiberg, senior policy analyst at Guggenheim Partners, wrote in a note to investors.

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“The heat is so intense due to the fact DeMarco holds the key to Fannie and Freddie Mac along with 12 other residence Federal House Loan Banks,” says Jenna Thuening, owner of Home Destination. According to the FHFA, these agencies provide a staggering $ 5.7 trillion in funding for the U.S. mortgage markets and monetary institutions including important lenders. Even with TARP funds possibly added to the mix, DeMarco holds his ground that it does not figure out productively to take income from one pocket and place it in one more.

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Homeowners in the Minneapolis area can get in touch with House Location for help taking into consideration choices if facing foreclosure or have an underwater mortgage and want support. Contact 612-396-7832.

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Housing Scorecard Shows HARP’s Success In Gaining Homeowner’s Permanent Mortgage Reductions

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Minneapolis, MN (PRWEB) August 07, 2012

On August 3,2012, The U.S. Division of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the July edition of the White Home Housing Scorecard a complete report on the nations housing market place. Data in the Housing Scorecard shows continued indicators of recovery as foreclosure begins and completions declined in June.

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The report additional says, ‘In addition, the inventory of homes for sale remained low at existing pace, it would take six.6 months to sell the provide of existing homes on the market and four.9 months to clear the new properties on the market place. Authorities contemplate a six month supply of homes to be a balanced industry. Distressed sales stay a key issue, even so, as the effect of significant delinquencies and underwater mortgages continue to temper market gains”.

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“The Residence Cost-effective Refinance Plan (HARP) continues to offer the deepest and most sustainable help offered to avoid foreclosure. Home owners in the program have a high likelihood of effectively overcoming their financial hardship and keeping their mortgage payments for the long term, mentioned Treasury Assistant Secretary for Financial Stability Tim Massad. We remain committed to using the tools we have obtainable to aid our country heal quicker from an unprecedented crisis.

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HUD’s report gives specifics on how homeowners in HAMP continue to demonstrate extended-term good results in the program. Tabulated stats from the end of June show:&#13

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far more than 1 million property owners have received a permanent HAMP modification&#13

individually saving roughly $ 537 on monthly mortgage payments&#13

savings on a national level total $ 13.9 billion&#13

75% of homeowners with non-GSE mortgages benefited from principal reduction with their HAMP modification&#13

distressed property sales accounted for 24% of all re-sales in May possibly, down from a revised 26 % in March and down from 29% the preceding year&#13

86% percent of property owners starting the plan in the final two years have received a permanent modification

The report points to HAMP modifications extended-term achievement by stating that they “continue to exhibit lower delinquency and re-default prices than private business modifications, with 94 percent of homeowners nonetheless current on their modified payments soon after six months”.

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Property Location interrupts DeMarco’s recent letter to Congress to mean that he believes HAMP’s extended-term successes is at threat.

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DeMarco’s has remained powerful in his leadership of Fannie Mae and Freddie Mac funds, standing at odds with The Treasury Division. He believes proposing a broad sweep of mortgage principal reductions would have damaging influence on mortgage markets. He stated, “Longer-term, this view could lead to larger mortgage rates, a constriction in mortgage credit lending or both, outcomes that would be inconsistent with FHFAs mandate to promote stability and liquidity in mortgage markets and access to mortgage credit”.

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This months indicators show momentum not noticed because ahead of the housing crisis as refinances via our enhanced Residence Reasonably priced Refinance Program continue to surge – HARP loans represented 20 % of total refinance volume in Might, the biggest improve given that the plan was launched in 2009,” said HUD Acting Assistant Secretary Erika Poethig. He continued, “But with so a lot of households nevertheless struggling to make ends meet, its clear that we have a lot more function ahead,”

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As the scorecard validates HARP is attaining sustainable mortgage reductions for property owners, Jenna Thuening, owner of Residence Location, hopes this encourages other people to participate in the plan and request an Independent Foreclosure Overview if their home is underwater.

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Extended Term Guidance from mortgagenewsdaily.com states they “continue to advocate against trying to ‘get ahead’ of current marketplace movements due to the high degree of uncertainty. In the past, we would have interpreted that suggestions as a suggestion to lock, but in the recently ‘low and sideways’ environment, it is possibly better-read as a suggestion to go with the flow of steadily decrease prices until we see the pattern definitively break.”

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Minneapolis and St. Paul region home owners might get in touch with Home Destination if needing a mortgage reduction or are facing foreclosure at 612-396-7832.

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