ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Mortgage Negotiation.....GOOD NEWS for a change!

Updated on October 16, 2008

The NEW DEAL in refinancing…. It’s a Brave New World

There are things I know to be true…..things that it may take the doom-saying media a few weeks to catch up with and report to you. None of us in the real estate industry ever could have imagined the changes one short month would bring. We are in uncharted territory when it comes to credit, real estate sales, short sales and foreclosures. But what we brokers and loan officers are starting to see is the opportunities, benefits, and advantages for borrowers that come with the turned around market, and $700,000,000,000 rescue plan.

If you are being squeezed by your mortgage payments this is the best opportunity you will ever have to renegotiate your loan, either by having your mortgage company reduce the principal owed, or lowering your interest rate or both.

Here's why......short version:

 

Stopping the bleeding.....

In past years, as you have all recently been informed as you witness our financial base falter and fizzle, mortgage companies have been selling “packages” of bulked-together loans, which are bought by investors as mortgage backed securities. Many of these are good strong borrowers in no danger of defaulting. BUT the loans in these securities were not sorted for risk factors and a percentage of borrowers are in danger of defaulting. Because of the risk factor and the melting market, investors have been buying up these securities for pennies on the dollar. Merrill Lynch recently sold $30.6 billion dollars worth of loans for .22 cents on the dollar. Does that sound like the new owner of those loans is in a position to make a profit even it they do have to give the borrowers a better deal? As Sarah would say....'you betcha!".

When banks failed to take action by rushing to renegotiate loans voluntarilly (well they said they were doing so, but they were rather slow and uninspired about it)..... borrowers just gave up trying. Some just walked away. (NEVER leave your home while you still hold title!) Our housing markets started to glut with repossessed and now bank-owned properties, and fewer borrowers are applying for loans ( but oh yes there IS money to be loaned, just ask for it! It’s a myth that no new home loans are available.) Banks, other lien holders and mortgage backed security holders do not want the expense of taking a property back. Those security holders now find themselves forced to operate in an industry far outside their realm of expertise. And they’d even prefer that you don’t sell your home and try to negotiate a short sale….whereby you are not foreclosed upon but sell your home, with the bank’s okay for less than you owe on it. Often past-due debt can be forgiven or tacked to the back of the loan, and you can secure a fixed rate for the rest of the life of your loan.

 

Stay in your home!
Stay in your home!

Forget everything you thought you knew...

This is history-making: More and more lenders are now willing to help you stay in the home by adjusting your loan so that you can make those monthly payments. It is finally dawning on our institutional leaders in government and the corporate world that the bleeding has to stop. It is not cost effective to foreclose on any more homes. Renegotiated loans are far more profitable, and far less work for the lenders.

There is a trick to adjusting your loan….you must justify the need by showing debt to income, and often you will be asked explain your unique circumstances. And you must find a way to get past the desk jockey’s and find the person at the top that can make a decision. You may have an attorney, but even better is your loan officer. They are the ones who are trained and experienced in negotiating with lenders and funders, they will know how to get the job done. I know professionals who will assist you in this process, so please do call me if you’d like to get out from under the pressure, and go directly to the decider.

As a Realtor® I can tell you it is not to your advantage to try and short-sell your home now that we have motivation and mechanisms in place to help you re-negotiate your terms and stay in your home. This will help keep values stable for everyone. You may have to wait for answers but by getting help from an established loan officer, or an attorney you now have a means keep your home at a monthly payment you can afford.

We are in uncharted territory, and it is absolutely true that things will never be quite the same again. Take advantage of the chance to keep your home by reworkng the terms of your loan. Then tighten your belt and get ready for the ride.

Published 10/16/08

 

 

 

 

 

 

 

 

Comments

    0 of 8192 characters used
    Post Comment

    • nancydodds1 profile image

      nancydodds1 

      10 years ago from Houston, Texas

      Nice information from your hub. I had gone through your hub its an informative. I had added another hub on Mortage Calculator feel free to check my hub.

    • Mary Tinkler profile imageAUTHOR

      Mary Tinkler 

      10 years ago from Gresham

      Oh yeah....big changes coming.  I've said before that I don't think the idea of borrowers actually getting change back from the transaction is in the average American's programming  I never even hear it discussed!  I don't know why citzens not only don't fight to change the practice,,,well law in favor of the lender, or used to be....but really, it never OCCURS to them.

      Here's how smart the banker has been:  they've foreclosed on a lot of homes, flooding the market with bank-owned homes. And they've been approving short sales on behalf of borrowers....effectively setting the reduced market prices that effect the value of their own unsold properties!

      Honestly they should have started restructuring loans instead of foreclosing years ago.  They just didn't know when to get off the gravy train.  There should have been regulation on the packaging of mortgage-backed securities, especially once the democratic-majority Congress was seated two years ago.

      We ought to ban our elected officials from investing in anything other than U.S. based and tooled green stocks.....then we'd see how fast jobs would come back to our country!

    • Lissie profile image

      Elisabeth Sowerbutts 

      10 years ago from New Zealand

      Mary you say: "It is not cost effective to foreclose on any more homes". In other words its taken $700billion for the US mortgage industry to work like every other western countries! That is quite extraordinary: maybe the US govt could follow up with some sensible regulation like: the bank has to sell a the foreclosed property in an open market (ie sold at a properly conducted auction) and any $ left over after the debt and the expenses go back to the property owner!

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)