October 2009 Entries
Posted ByCarlos LaSallewww.shortsalesdone4.meWhat’s Better – Short Sales or an Annuity?As investors seek safety against a falling dollar and declining stock market, annuities are an option increasingly explored by fearful investors but are annuities all they are cracked up to be? Let’s take a few minutes to compare and contrast annuities versus short sales to see which makes the most sense.Annuity DefinedAn annuity is essentially an insurance product that pays an income for a specified period of time. In a nutshell, you hand over a lump sum and/or regular contributions to an insurance company that is able to use and invest...
Posted byCarlos LaSalleNo to Interest-Only Mods The Mortgage Investors Coalition, a trade group of asset managers holding more than $100bn in residential mortgage-backed securitizations(RMBS) on behalf of pension funds, college endowments, and other investors, is calling on the Treasury Department to reject a proposal to offer distressed borrowers interest-only payments for a certain length of time as part of the terms of a Making Home Affordable Modification Program (HAMP) workout. The coalition said the proposal fails to address the issue of negative equity, and that it is not in the best interest of the housing industry and consumers. “Modifying...
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Carlos LaSalle
The talk of the town has been mortgage modifications. What this article points out that in many instances, the modifications leave the homeowner worse off for the long term.
The problem arises from lenders rolling all of the past due payments, interest, penalties etc etc back into what is owed. When the new mortgage amount is calculated it is oftentimes much higher than the original amount. This action does serve the purpose of keeping families in homes longer (which is good), but it burdens them with a new bill that is very difficult to handle. More and more,...
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Carlos LaSalle
As compared to the 1st quarter of 2009, foreclosure rates rose 17% in the second quarter of 2009. This is despite foreclosure prevention plans implemented by the government and several lending institutions. Rising unemployment continues to be the culprit behind many of these foreclosures. The article also points out that Option ARMS (where a borrower picks their payment over a period of years) is also a contributing factor. When the low payment period ends, the higher payment oftentimes buries the borrower causing them to miss payments. The article points out that, “More than 15 percent of these types...
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Carlos LaSalle
If I have said it once I have said it many times......take out the long board because the commercial short sale wave is coming! In my “travels” I am starting to hear that the “commercial lenders are becoming more reasonable when evaluating short sale offers.” What this means is that short sales (whether residential or commercial) are going to be with us for a long time. Contact us if you or any of your clients have any owners of over leveraged commercial properties.
Second foreclosure wave likely to hit commercial property
The economy and the real...
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Carlos LaSalle
Finally some good news from the Government! It appears that they are in the process of finalizing plans for additional incentives to mortgage companies to approve short sales. The amount of time some lenders/servicing companies are taking to approve short sales borders on crazy! Hopefully additional incentive will assist in getting more approved. A quote from the article states "Presumably, the Treasury is trying to help facilitate a transaction that will result in less loss to the lender than in the case of a foreclosure," John Burns consultants said in a research note dated Oct 1 alerting clients...
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Carlos LaSalle
This article from the Wall Street Journal confirms what many of us in the business have been seeing for months now. The banks willingness to work something out to avoid having to take the property back. Whether it's a short sale or a loan modification, lending institutions are willing to take a loss now in order for them to be viable in the near future.
Banks can afford "to take the pain up front," said Kevin Fitzsimmons an analyst at Sandler O'Neill & Partners LP in New York. "If they want a legitimate chance of salvaging something out of...