Is The Governments Plan To Help Homeowners Avoid Foreclosure Enough??? -www.SellQuickForCash.com-

This is another statistic that lends to the reason why short sales are becoming a popular method of liquidation for lenders. The homeowners usually work out a payment plan with their lender and 80% of them don’t even receive a FIRST PAYMENT! It is no wonder why banks are discounting properties so frequently. Now is the best time to look at short sales as an exit strategy from your home!

CRL Criticizes Government’s Loan Modification Program

Article: Kerri Panchuk

The Center for Responsible Lending (CRL) says the U.S. Treasury Department’s existing plan to help distressed homeowners is ineffective and realistically will only have the impact of preventing 118,200 foreclosures, which is only 3-percent of the outstanding subprime loans that are in the marketplace heading towards rate resets.

CRL said, “This analysis shows the Treasury plan, plus existing lender modifications, barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.”

In a critique of the plan, CRL claims data supplied by the Mortgage Bankers Association points to a disturbing trend in which voluntary loan modifications will be significantly outnumbered by potential foreclosures.

Below is a verbatim list of CRL’s criticisms of the Treasury Department’s plans:(Source: CRL)
On all loans, industry data show that for every loan modification made by a lender, seven times as many foreclosures are initiated. For the subprime adjustable-rate mortgages (ARMs) that are at the root of the current crisis, foreclosures outnumber modifications 13-to-1.

Lenders are giving themselves credit for loan "repayment plans," but these should not count. Repayment plans make homeowners’ monthly mortgage payments higher. And they allow lenders to designate a distressed loan as being current without actually changing any of the terms that made a mortgage unaffordable in the first place.

It is questionable whether even the true loan modifications will be sustainable because lenders have no obligation to report outcomes. In fact, previously Countrywide acknowledged that most of its touted modifications actually "involved deferring overdue interest or adding the past due amount to a loan," not reducing interest rates or principal balances on unaffordable subprime ARMs

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