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Watch CBS News Videos Online‘ >Loan Modification Ca Housing Crisis

“We had the greatest asset bubble in history and now that bubble is bursting. The single biggest piece of the bubble is the U.S. mortgage market and we’re probably about halfway through the unwinding and bursting of the bubble,” Tilson explains. “It may seem like all the carnage out there, we must be almost finished. But there’s still a lot of pain to come in terms of write-downs and losses that have yet to be recognized.”

In 2007, Tilson teamed up with Amherst Securities, an investment firm that specializes in mortgages. Amherst had done some financial detective work, analyzing the millions of mortgages that were bundled into those mortgage-backed securities that Wall Street was peddling. It found that the sub-primes, loans to the least credit-worthy borrowers, were defaulting. But Amherst also ran the numbers on what were supposed to be higher quality mortgages.

“It was data we’d never seen before and that’s what made us realize, ‘Holy cow, things are gonna be much worse than anyone anticipates,’” Tilson says.

“The defaults right now are incredibly high. At unprecedented levels. And there’s no evidence that the default rate is tapering off. Those defaults almost inevitably are leading to foreclosures, and homes being auctioned, and home prices continuing to fall,” Tilson explains.

“What you seem to be saying is that there is a very predictable time bomb effect here?” Pelley asks.

“Exactly. I mean, you can look back at what was written in ‘05 and ‘07. You can look at the reset dates. You can look at the current default rates, and it’s really very clear and predictable what’s gonna happen here,” Tilson says.

“How big is the potential damage from the Alt As compared to what we just saw in the sub-primes?” Pelley asks.

“Well, the sub-prime is, was approaching $1 trillion, the Alt-A is about $1 trillion. And then you have option ARMs on top of that. That’s probably another $500 billion to $600 billion on top of that,” Tilson says.

Source: 60 Minutes

Publisher- Michael Kench Uncategorized Amherst, Array, Borrowers, Carnage, Cbs, Cbs News, Detective Work, Investment Firm, Loan Modification, Loans, Losses, Mortgage Backed Securities, Mortgage Market, Mortgage Meltdown, Mortgage News, Mortgage Online, Online Loan, Primes, Quality Mortgages, Tilson, Wall Street

5 Reasons California Loan Modifications Are Going Bad Again

In 2009 more loan modifications are going bad. Why?  To many borrowers that were at the mercy of their lenders accepted mortgage modifications that were not in the borrowers best interest.  Most home owners when presented with a loan modification Ca program  did not know how to negotiate better terms and accepted the first offer that was presented to them.  The loss mitigation representative who is negotiating the modification is representing the bank and has the lenders interest that they represent and they are trying to achieve a home loan mortgage modification that is in the lenders best interest and not necessarily the borrowers best interest.  So it is important to way all options before you accept a loan modification proposal on your home loan.

There are other factors that are affecting loan modifications to go bad which have caused some borrowers to give up and throw in the towel.  5 of the reasons are as follows

 
5 factors behind the trend:
1. Overextended borrowers: With the ease of credit and negative-amortized, adjustable, pick-a-pay, interest only loans.  Many unknowing borrowers were led into the American Dream of home ownerships, with ease of qualifying, the fear that many first time homeowners would simply miss the boat of owning a home with the rise in real estate values and the speculative gold rush of of home appreciation.  Many borrowers not only fell into the real estate trap, but also overextended their consumer credit cards, personal loans and luxury items. Unfortunately many of these over extended consumers won’t be able to make their payments even in the most generous of loan modification Ca programs.
2. Underwater effect: IN several parts of the country for example California, housing prices have declined over 50 % in value and borrowers are having a hard time trying to deal with making a mortgage payment on an asset that is not worth nearly what it was when they bought it.  And in most cases even if they were to have they mortgage modified it would not address the negative amount of equity in their homes and know one knows when values will increase again.
3. Housing Market decline: Has the home market reached a bottom yet?  Is the housing market going to continue a decline?  These are questions that troubled homeowners have to deal with in deciding if the loan modification Ca program they received is worth paying into an investment that will continue to devalue.  Historically speaking real estate prices have increased in value over time.  Unfortunately we do not have a crystal ball that will tell us when home prices will return and home appreciation will become a benefit of home ownership.  One thing most homeowners need to remember is that they will need shelter, and it may be better to own a home in the long run than to rent, taking into account that your home is still one of the only tax write offs you have and that if you get a loan modification that will work for you short term and long term you should focus on paying down and eventually off your mortgage so you can own your home free and clear. Owning a home without out payments and with the benefit of future appreciation.
4. Original Loan Modification Ca terms: Some of the modified loans weren’t modified appropriately to make them affordable for troubled borrowers.  The loans could have been adjusted to more in line with the borrowers debt to income ratios to make there loan payments more viable for long term success.

5. Unemployment: This is another major cause of defaults on loan modification programs. Many homeowners who were successful in obtaining a mortgage loan modification were unable to maintain their mortgage payments due to a loss of employment, decrease in income, or other unforeseen events, which made it impossible to keep up with payments or to do another loan modification on their home loan.

Publisher- Michael Kench Uncategorized American Dream, Avoiding Foreclosure, Best Interest, Borrowers, California Loan, Consumer Credit Cards, Example California, First Time Homeowners, Gold Rush, Hard Time, Home Appreciation, Home Loan Mortgage, Interest Only Loans, Loan Modification, loan-modification-ca, Loss Mitigation, Luxury Items, Mortgage Loan Modification, Mortgage Market, Mortgage Payment, Ownerships, Owning A Home, Personal Loans, Posal, Real Estate Values, Underwater Effect

How Can A Loan Modification Ca Agreement Help You?

Can a loan modification Ca agreement protect your home from impending foreclosure? The answer is yes, it can. A loan modification takes place when a lender accepts to alter the terms and conditions of your existing loan. The idea is to make the payments reasonable for you so that you can pay off the loan with ease.

Loan modification programs are now being provided by numerous lenders and financial service providers to assist people who are facing foreclosure or experiencing difficulties to get even with their mortgage payments. As a consequence of the present economic scenario, increasing numbers of people are being compelled to search for a means so that they can prevent losing their homes.

A loan modification agreement is not the same as a forbearance agreement. A loan modification Ca agreement works as a solution for borrowers who would not have the capacity to pay off their current loans whereas a forbearance agreement offers relief to the borrowers to solve their short-term financial difficulties.

Federal loan modification programs rework the terms and conditions of your existing mortgage in such a way that it enables you to make reasonable mortgage payments and live in your home. If you became unemployed for a limited period of time, then these programs might incorporate summing up your missed payments at the end of your loan term. 

A reduced interest rate is another type of loan modification. Some years back, a number of activities in the mortgage market were not entirely considered as principled and if you had fallen prey to any of them, you might have a more than usual interest rate. In such a situation, the loan can be adjusted to incorporate a reduced interest rate and as a consequence, a reduced payment.

One more popular type of loan modification Ca program is switching the form of loan that you have. When you have an adjustable rate mortgage, the loan modification company might permit you to switch your existing loan to a fixed rate mortgage. Most probably, you would have reduced payments and the amount of payment would be equal every month and would not vary according to the prime rate.

When you have the risk of losing your home, there are options to prevent foreclosure. You should not hang around searching for a solution to avoid foreclosure and instead go for loan modification.

Publisher- Michael Kench Uncategorized Adjustable Rate Mortgage, Borrowers, Consequence, Economic Scenario, Existing Mortgage, Facing Foreclosure, Federal Loan, Financial Difficulties, Financial Service Providers, Forbearance Agreement, Interest Rate, Lenders, Loan Modification, Loan Term, loan-modification-ca, Loans, Mortgage Loan, Mortgage Market, Mortgage Payments, Period Of Time, Prey, Principled