Posts Tagged ‘HAMP’

Credit Fueled Drunken Debauchery

Come on, you had to know I was going to write about this: Her no longer royal highness Sarah Ferguson is blaming booze (and her debt) for her lapse in judgment in seeking money in exchange for access to her ex-husband, Prince Andrew.  I’m still not entirely clear what “access” really meant… that alone could be another blog, on another website.

Oddly, this reminded me of among the many colorful jobs I had when I was going through school was that of a bartender.  In the movie “Cocktail”, Tom Cruise made bartending look sort of cool.  And to an extent it is… but for the smells of dirty bar rags that still sometimes haunt me in my dreams.  It also helps to have the physical stamina of a 20-something and be able to be cheerful and attentive past midnight.  Or 4am.

Then there’s another aspect of being a bartender that isn’t so fun: having to shut someone off.  That’s when a bartender has to make the call that a patron has had a wee-too-much and can be served no more alcohol.  Any bartender will tell you – this aspect of the job stinks.  But I see this emerging attitude about lenders and their reckless credit underwriting standards that resembles the same often righteous indignation I see when I would tell people they were on their last drink of the night.

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Some ‘Provocative’ Questions about ‘Extend and Pretend’

I read this today on HousingWire.  Its publisher, Paul Jackson, poses the following “provocative” question about all of those modification plans and programs we keep hearing about (and I often write about):

[W]hat if ‘extend and pretend’ within our nation’s troubled mortgage markets is actually providing a lift to consumer spending?

Or, perhaps it can be said like this: what if consumer confidence statistics are actually being artificially buoyed by the extra cash homeowners (at homeowners ‘on paper’) who are not making mortgage payments, but instead, allocating those resources to things they would not otherwise purchase? (more…)

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That Servicemembers Notice & Your Loan Mod Request

I received a call today from a client what we in the biz refer to as a “Soldiers and Sailor’s Notice.”  I had met this caller a few weeks ago – and at that time, was told that the home mortgage and loan were “in review” by the lender and servicer.  The caller was confident that a modification would be offered – and it would be one they could live with.  I have “I’ll believe it when I see it” view.  But today, the caller had this notice – which was found tied to the front door knob by a rubber bank.  The caller’s question for me: “what does this mean?” (more…)

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Saving the Home: Thinking Beyond “Delay and Pray”

The foreclosure numbers don’t lie.  According to ForeclosuresMass.com, a total of 478 new foreclosures were filed this week (ending January 29, 2010).  Approximately 56 homes slipped into foreclosure every day for the last 60 days.  The economy is far from a turn around.

HAMP is not really working – at least in not any meaningful way.  Homeowners can expect a “delay and pray” modification or an “extend and pretend.”  Taking arrears and putting on the tail end of the note, “delay” (which is a nice way of saying a “balloon” payment), means that for it to be paid off, the value of the property will have to increase (hence, the term “pray”).  What seems more accurate is “extend and pretend.”  You can extend the terms, such as turning a 30 year note into a 40 year note.  Of course, the “pretend” comes into play when you want to “pretend” you want to live in the property, “pretend” that the economy and the housing market will turn around so that you still won’t have to come to the closing table with a checkbook in hand.

HAMP is not the only option available to homeowners trying to avoid foreclosure.  There’s HARP, there are short sales and there is the possibility of keeping the home under bankruptcy court protection (either in chapter 13 or 11).  While bankruptcy should be one of the last options, I am always surprised at people who quickly dismiss it altogether – especially when it’s the best option available.

Consider this scenario:

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State of the Union Decompression: The Whole Mortgage Modification Thing

After taking many months learning and understanding HAMP and how it works (and in many cases doesn’t), and after sitting through (and tweeting through) the President’s State of the Union Speech, I am admittedly still mulling it all over.  Some tout the speech as the longest in President Obama’s career.  Others are debating the propriety of the Nation’s Chief Executive chastising the Supreme Court in the House Chamber.  Yet despite its length, its controversies and its platitudes, the word “foreclosure” was not used once.  And that should be incredibly disheartening for any homeowner concerned about losing their home.  As an insolvency professional who works with homeowners in financial crisis, it was for me. (more…)

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The State of Our Union

Tonight, like many Americans, I’m going to be watching the State of the Union speech.  While I have many concerns as a citizen, as a bankruptcy and insolvency professional my concerns continue to be on the economy, and the government’s efforts in moving the country through the current economic mess it is in.

I’m not sensing any real effort from the White House, Capital Hill or even Beacon Hill in giving any meaningful solutions to distressed homeowners.  Perhaps better said, all I am hearing is double-speak and mish-mash emanating from our elected officials who talk about programs like HAMP, while at the same time, skirt around the statistics that suggest that the program is an abysmal failure.  Remember, Obama says HAMP is for “responsible homeowners” but we don’t really know how the term “responsible homeowner” is actually defined.  And in no uncertain terms, what I am hearing from my clients, and what I am hearing from my colleagues all fuels my sense that things are not getting better, and Washington appears impotent to do anything about it.

Since tonight is the State of the Union speech, I’m going to hold off – for now – from telling my readers what my view of where things are and where I think things may be going.  I do have some idea of what I think we need to do to make things better.  And in the coming days, I’ll be sharing what I and McLeod Law Offices is going to do for our clients…and why.  But first, tonight I will listen to what our President has to say.

And I’ll also be tweeting – so be sure and follow me on Twitter.

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