Sarasota homeowners see loan mods and refinances as “band-aid” only, postponing exploding foreclosures while doing NOTHING about “underwater” home values.
Call Sarasota Realtor Mike Payne for help avoiding foreclosure!
Forget what you’re hearing on the nightly news.
Sarasota’s home values continue dropping despite increased home sales.
FACT: 1 in 4 homeowners with a mortgage owes more than the house is worth.
More and more homeowners are making a business decision about their “homes”: they’re walking away! They’re taking the credit hit and filing bankruptcy if necessary.
Forget morality. Don’t waste your breath. When banks screw with people, sanctioned completely by the government, homeowners must do what’s best for THEM.
- Loan modifications are not the answer (guess what’s happening with loan mods?).
- Refinancing is not the answer (especially if debt owners refuse to reduce principal).
Click Read More for reality check on how many homeowners are getting help avoiding losing their homes.
BANKS HOLD HOMEOWNERS HOSTAGE
A progress report from the Treasury says 650,000 mortgages are in trial modification. But under questioning last month, a Treasury official revealed that less than 10,000 mortgages had been permanently modified.
That’s a dismal result for a program launched at the start of March. It’s even worse when you work face-to-face with homeowners held in limbo about keeping their homes.
It’s the government’s other mortgage bailout–the Federal Reserve’s efforts to lower mortgage rates, as well as a bit of help from Treasury’s new rules for refinancing Fannie Mae and Freddie Mac mortgages.
Sarasota homes for sale do not want to see increased job losses and delinquencies!
While less than 10,000 mortgages have been modified, more than 3 million mortgages have been refinanced. The purpose of the modification effort is to make payments more affordable for borrowers. However, it’s refinancing that’s actually making some progress on this front, reducing payments on average by $150 a month.
There’s a simple reason that there have been 300 refinancings for every permanent modification: Banks know how to refinance mortgages.
It’s a simple service they’ve offered for years. The modification program–under which the government is offering incentives for loan servicers to lower interest rates, extend the term of mortgages and defer payment of a portion of the principal until the maturity of the loan–is new and confusing to customers and banks.
Homes Sarasota see increased delinquencies, as home values drop.
Simple but still a band-aid.
Without jobs, homeowners cannot make their house payments, regardless of the reduced monthly payment. Without principal reduction, the band-aid comes off when (not if) the homeowner needs to sell within 4-5 years. What, you think home values will jump 40-50% in the next couple years?
NO WAY!!!! And I’m a horrible prognosticator. In Sarasota (and other Florida areas where I work including Bradenton, Brandon, Palmetto, Tampa, Orlando & Kissimmee), home values have dropped up to 50%. These areas will not see 10% years anytime soon.
“MBA (Mortgage Banker Association) survey claims Delinquencies and Foreclosures Continue to Climb in Latest MBA National Delinquency Survey May 28, 2009.”
The seasonally adjusted rate is the highest in the MBA’s records going back to 1972 and the unadjusted rate is the highest recorded in the first quarter of any year back to 1972.”
“What has not changed, however, is the oversized impact of California, Florida, Arizona and Nevada in driving up the national numbers. Those states continue to account for about 46 percent of the foreclosure starts in the country, and represented 56 percent of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts.”
“It is difficult to overstate the severe impact home price declines have had on mortgage performance in those four states. 10.6 percent of the mortgages in Florida are now somewhere in the process of foreclosure. In Nevada it is 7.8 percent, Arizona 5.6 percent and California 5.2 percent. ”
“MBA is suggesting worse of subprime is likely over, now we are going to start the foreclosure on Alt-A and prime loans – a much larger market. Prime fixed-rate loans now represent the largest share of new foreclosures. In addition, almost half of the overall increase in foreclosure starts we saw in the first quarter was due to the increase in prime fixed-rate loans.”
Sarasota homeowners will do what’s best for them, now and later. Refinancing an “underwater” property & basing the payment on today’s value while adding the remaining balance to the backend does NOTHING to help the market or the homeowners. What do you think? Agree? Disagree? Leave your comments below, even if you disagree. At a minimum, I want debt owners to consent to principal reduction. Base the refinance on today’s value & write down the remaining balance. Debt owners are not going to recover the remaining balance anyway. It’s a trick to reconcile debt owners’ books.
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