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Most subprime borrowers required a stated income product if they were self employed or a product that would allow a borrower with a low credit score to still have the ability to purchase a home with little or no money down. The banks created these products and many consumers for the first time in their lives had the opportunity to achieve the american dream. When the market tanked, President Obama bailed out the banks with stimulous funds. Instead of recasting mortgages the banks went out and used much of the government bail out money to purchase other banks, not refinance troubled mortgage consumers. Banks were able to receive the funds at zero or close to zero percent interest rate. If President Obama had taken those same funds and created a new entitiy that would borrow from the Fed at zero percent and lend directly to consumers who were unable to afford their non-fixed rate mortgages and replaced those mortgages with 2% fixed rate products that the consumer could afford, we could have diminished the effects of the housing crash. If banks were paid off at a rate of 100% of the mortgage balance and consumers received the 2% fixed rate mortgages all consumers who required mortgage relief would benefit from the Presidents stimulous plan. This new entity would be entitled to a small percentage of any future equity, if any down the road. Those equity funds would go back into government coffers. The present stimulous package has not halted the downward spiral in real estate values. Too many consumers are still losing their homes. Each foreclosure becomes the new most recent comparable for home appraisers. Direct help to those consumers who were harmed by the subprime and alternative to fixed rate mortgage products would have made the consumer whole, the lenders whole and the coffers of government would receive a bonus kicker from any equity build up down the road. Jim Thornton 2PercentCommission.com 1-866-642-1145
In Pennsylvania state agencies have identified approved credit counseling agencies in their literature. This information is mailed to those behind in their mortgage payments when they receive an Act 91 notice which is a notice unique to Pennsylvania borrowers who are behind in their payments. The cost of counseling is free to the consumer and the approved credit counselors receive a fee from a state funded agency to help the consumer work through the loan modification process. The amount of Act 91's are staggering and the amount of time required to appropriately help a consumer work through the loan modification process can be overwhelming to the credit counseling agencies. The fees the agencies receive are fixed per client but the amount of hours trying to service a consumer who is poorly organized in their personal record keeping can far surpass the fees the credit counselors receive from the state. There are too many borrowers who need help and not enough counselors to service them. Most of the successful loan modifications that I have seen approved required the assistance of an attorney who understands the unique issues related to the process. In my limited experience I have found that introducing an attorney into the process early helps to stall the foreclosure process and adds the ample time required for the loan modification process to take place. Too many consumers have made prepayments to loan modification firms and never received proper service. When an attorney intervenes they bring an arsenal of weapons to the loan modification and foreclosure process that lay persons don't have access to. To save your home, have a greater chance at mortgage or credit card debt reduction, achieve a loan modification or be able to stay in your home for up to a year while attempting to resolve your mortgage issues you need the services of a good attorney with the specialized skills and background knowledge required to successfully achieve a loan modification. Not all attorneys are created equal and choosing a competent loan modification negotiator is key to achieving an acceptable outcome. Fees that I have seen in Pennsylvania have ranged from $1250 to $2500 for the loan modification and fees of 10% to 20% percent of any mortgage or other debt reduction negotiated by the attorney. Most recently a former client of mine had their attorney negotiate a $125,000 reduction in the mortgage amount on a mortgage amount just above $900,000. The process is not yet complete but that is the offer the lender made to the borrower. That same attorney negotiated a rate reduction from 8 7/8% to 3.6% for another client with a $220,000 mortgage. The new rate is good for thirty years. Unfortunately, most borrowers do not know who to turn to when they find themselves having difficulty paying their mortgage. Jim Thornton Re/Max Preferred 610-325-4100 Mobile 610-506-0802
Does an average of 15 quotes equal 15 credit report pulls? I would not want to be responsible for dropping an innocent consumers credit score because of so many credit reports being accessed by so many originators. A Philadelphia police officer I worked with was on the internet and had so many lender offers and so many credit reports pulled that his score dropped over 100 points pushing his final interest rate up over three percentage points. He started with excellent credit and ended up with a terrible rate. He thought he was being an informed consumeer. How does Zillow deal with this issue? Jim Thornton 2PercentCommission.com