> Message: 3> Date: Tue, 21 Aug 2007 17:59:09 -0400> From: Doug Henwood <dhenwood at panix.com>> Subject: [lbo-talk] note from a foreclosure counselor> To: lbo-talk <lbo-talk at lbo-talk.org>> Message-ID: <4645E205-D473-4DA4-8517-ECB6E68F1357 at panix.com>> Content-Type: text/plain; charset=US-ASCII; delsp=yes; format=flowed> > [just got this note from a radio listener]> > I've been a long time listener to Behind The News - which I love - > but needed to say an extra thanks for all of the coverage on > housing. I'm a HUD approved foreclosure counselor up in > ______________ and over the past 2 years that part of my job has > become quite the hell on earth. I have looked forward to Thursday's > drive home for some validation that things ain't so great out there!> > Unfortunately it's getting worse. Used to be I could feel > comfortable telling homeowners that the bank would prefer to keep the > loan, but no more. I now have loss mit telling me that the > 'investors' will only allow such and such plan (which the homeowner > inevitably cannot do). I have a source who tells me investors are > trying to liquidate everything. So foreclosure rates go up 9% in a > month.> > The next horror I see coming down the pike are the loan servicers. > Forced on homeowners, they are severly limiting loss mitigation, some > only offering the most outrageous of plans. Servicing fees are > usually small, their real money comes from the extra charges (late, > legal, and appraisal fees, etc) that they can only charge (and keep) > when someone is behind. So gee, I wonder why they never received > that payment I have a cancelled check for. They are comparable to > collection agencies.> ouch. yes. A few days ago I saw a Larry King episode with Donald Trump, the Rich dad, Poor dad guy Robert Kirosaki(?) (who doesn't sound obnoxious, but still carries a lot of moral burden for this), and some optimists. Donald Trump was being the most pessimistic, but with him, you have to wonder if he has selfish motivations for whatever he projects on television, even if I was most inclined to agree with him. When a Florida homeowner said her rates went up to 8.7% and there was a prepayment penalty of $21,000, their facial expressions showed they thought she was naive, and they said that she needed to return to fixed rate regardless, by negotiating. Many newspapers and tiplines are dispensing advice right now that banks will negotiate once a payment is missed, rather than face the cost of finding a new buyer and doing the foreclosure process. However, this is probably wisdom repeated from other media sources rather than the reality. The shock right now isn't resulting from interest rates actually climbing that much, but the fact that loan approval criteria was suddenly restrengthened... so people in trouble are particularly unable to get out of adjustable contracts. I don't believe that so many people with those mortgages were stupid and naive - they made a very logical decision to leave more expensive contracts for a few years as long as overall rates were down, and then expected to quickly return to their previous fixed loan as soon as that made sense. It is a scam on them that credit rating criteria etc. were suddenly shifted. My acquaintance was able to give her condo back to the builder w/o owing money. I thought it was dumb to buy, but I actually thought she could sell it, because California was still pretty hot last November. She had some sort of pressure about being 33, and paying high rent. Her boyfriend who did that deal was a real estate agent and is back to bartending, and another acquaintance is doing telemarketing.
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