Loan Modifications For Gainesville Short Sale
Loan Modifications For Gainesville Short Sale
Your Gainesville short sale has just been turned down and you are wondering why. Perhaps, you know the reason but it doesn’t seem to make sense.
As a Gainesville short sale agent, I have witnessed homeowners – who settle their trial payments on time – being subjected on trial modifications only to end up rejected.
Here are some scenarios that will point out reasons – perhaps, mere excuses by lenders – why a Gainesville short sale is rejected:
You make your mortgage payment to Bank of America. You apply for a loan modification with the Bank of America since you are behind on your payments and can no longer settle it. Though you are in a foreclosure, the judge has not released an order to auction your home yet and you are still living in your home. You are in total fear seeing your neighbors lose their homes. You start hoping upon learning on the news that the Federal Making Homes Affordable Program is able to aid homeowners keep their homes by getting a loan modification. You keep on hearing about loan programs that seemingly would help you keep your home but to your dismay, nothing would work. Your hope just turns into hopelessness.
Your adjustable rate application has been submitted and your mortgage payment is up from $1600 a month to $2300 per month; therefore, you are no longer able to make your payments.The reality is that you can’t afford these payments anymore. For nearly 2 years, you’ve been awaiting for the Bank of America’s approval on your loan modification and to be certain, you hired an attorney to aid in defense of foreclosure.
Suddenly, the Bank of America rejects your application on loan modification. You become totally confused about the situation and wonder why such thing happened. It seems unlikely since the Bank of America is one of the large lenders. It also participates in the government’s Federal Making Homes Affordable program, the HAFA program, and other programs by the government.
Later you learn from Bank of America that the investor had the final say in turning down your loan modification application. The biggest question is, “How come an investor is able to make such decision?” The reality is, the confusion is all around us. There are people in the real estate business who are not knowledgeable about the process and how it is being handled.
The Bank of America is the servicer and when you make your payments to them, it’s not indicative of their ownership on the note that you are paying on.
The vital thing to do firsthand is to find out who truly owns your note. Inquire from who make your mortgage payments.
The very first thing you need to do before you ask for a loan modification is to find out who actually owns your note. You can do this by calling who you make your mortgage payments to and asking them. It may be necessary for you to make a written request to be forwarded by certified US mail, since a lot of servicers don’t disclose such information.
Many of the servicers don’t want to give you that information so you may have to make this request in writing and send it by certified US mail. You have a bigger chance at getting an approval on your loan modification if you qualify and Freddie Mac or Fannie Mae own your note. Your chances blurs if your note goes to a private group of investors.
A ratio of one for every eight homeowners’ loans were sold to investors on Wall Street. A collection of loans are grouped together – called as mortgage-backed securities – , which are sold off to investors. It will be five times more likely for homeowners to be late on their house payments if they have mortgage-backed securitized loan. A lot of these borrowers were provided with loans that from the beginning, they were not qualified for. Most of these homeowners getting the loans were not able to read the fine print and were not able to assess how high their mortgage payments might go when they are adjusted.
The parameters in qualifying on short sales, modifications, and terms of foreclosures and deficiencies are inconclusive. Homeowners who are told no by the investor have little recourse.
The federal Making Homes Affordable program lenders participating in the program must alter all those homeowners that qualify. The exception is when the investor has a rule that they do not permit alterations. It has been reported to congress by the Federal Housing Finance Agency that such securitized mortgages are a barrier to the success of the Making Homes Affordable program. The reasons why the changes are rejected have not been revealed so there are little to no facts to proceed with.
Investors declining to the homeowner’s application on loan modification doesn’t seem to make any sense.
Bank of America’s defense is that the money is needed by investors also. For instance, there is a situation with Chase wherein the homeowners are applying for a loan modified but Goldman Sachs is the issuer and Deutsche Bank is the trustee. On few occasions during Gainesville short sale negotiations, the investor gives the ball back to the servicer arguing that the latter is responsible for the decision in approving a loan or not.
Investors somehow think that they are being treated as the scapegoats. There are easily blames for everything. It’s difficult to determine the truth because you rarely get a chance to talk to any representative at the investors’ group. Chase bank, for this particular situation, claims that the payment goes up on a loan modification because the investors do not cancel the past due debt. Chase then had to account the past due balance along with other fees and penalties into the loan modification. This will then lead the disqualification for the loam modification of the homeowner.
Servicers do have contracts and agreements that they sign together with investors. Such agreements have the rules for modifications. The agreements are called Pooling and Servicing Agreements, also known as PSA’s. PSA is oftenly what the servicer claims is the reason for them not being able to do the loan modification or release the deficiency on a Gainesville short sale.
When you inquire with other people in the management areas or with investors, they claim that there is nothing in the PSA’s that would hinder the servicer from accepting loan modifications, Gainesville short sales and releases. A new study is about to be released from a law school wherein they discover that only about 8% of these mortgage-backed securities agreements have any language that indicates the servicer is not qualified to do a loan modification for these notes. That indicates about 92% of all the NO’s could be YES’s in reality.
They are fearful about law suits! Chase Bank or Bank of America or any other servicer and Deutsche Bank- it says that SERVICER can “waive, modify or alter any term” given that the servicer gives a “reasonable determination” that the modification is in the investor’s best interest. The Attorneys studying these agreements say there is quite a bit of room for servicers to make these decisions. The language itself in the agreement is suffcient for the servicers legal counsel to be focused with the investor suing them for not acting in the best interest of the investor. They are not allowed to put the homeowner ahead of the investor. This is about business and if they want business from investors they have to make sure they are looking out for the investors’ interest.
The fear of law suits is the biggest deterrent to getting the servicers to approve loan modifications and Gainesville short sales, says the Treasury department. Simply turning down the loan modifications are the answer many servicers opt to choose. Nothing personal and this is not against the homeowner. The role of the servicers is to watch their own backs and to protect the assets to which they have been entrusted with – your mortgage-backed security. The Treasury Department says they can relieve some of the pressure of the fear of lawsuits by standardizing requirements for loan modifications and also laying out some type of calculation to determine if the investor will make more money by the loan modification or by the foreclosure.
Investors end up being normal people because most of these mortgage-backed securities were bought by pension funds and retirement plans of folks like your grandparents, your parents, your aunts and uncles or even yourselves. You may well be one of the shareholders of the very loan you can not pay.
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Call Stephanie Anson today at 352-260-0153 for a confidential phone interview regarding your options.
Please seek legal advice. This information is for informational purposes only.
Contact Stephanie Anson, CLHMS, CDPE, SFR, Realtor®, Anson Properties LLC. Licensed Realtors® in Florida at 352-260-0153 to list your property for sale or to purchase a property in Gainesville, Archer, Alachua, High Springs, Waldo, Keystone Heights, Hawthorne, Melrose, Cross Creek, LaCrosse, Williston, Earlton, Ocala, Micanopy, Newberry, Kanapaha, Haile Plantation, Duck Pond and the rest of Alachua County Florida, Orange County Florida and Seminole County Florida. We are accepting referrals.