Myths and Facts About Lenders? Assistance to Homeowners
October 22nd, 2010 | 
Author: About Lenders’ Assistance to Homeowners
(as found in the article Myths and Facts about Lenders’ Assistance to Homeowners)
We are now in this financial mess due to past runaway liberal loan policies. Prospective homeowners succumbed to attractive mortgage baits by lenders. One example of this is- Orange County, though small, was home to almost 300 failed subprime lenders; who gave high–risk mortgages. We can’t completely blame them on these disastrous moves, because they had the impression then that our financial system was a rock-solid mountain. They were just being Americans, who are bold and risk takers. But we can’t be right all the times.
Lenders do not want these houses, but they need to recover their investments, thus they have to foreclose. They are sincere in their intention to help the borrowers, but just to certain extent that it will not affect their profits to survive. JP Morgan is expanding its loan modification plan, aimed to reduce foreclosures, on about $70 billion in loans of 400,000 borrowers; who currently have obligations to the firm. It is going to put a hold on foreclosure moves, until the new program is installed. Bank of America has begun to make similar moves as well. These moves are not all that surprising, given the fact that enough delinquent mortgage securities are already in their books. These lenders are eager to help homeowners stay in their homes, as long as it’s still profitable for them to do so. As large numbers of homeowners sought help of their lenders, the responses of big lenders like the Countrywide are quite revealing – “Cut back on groceries to pay your mortgage or maybe you can eat less.”
Given these recent efforts made by financial institutions, one has to wonder if government intervention is necessary to help 1800 banks lining up for a piece of the $700 billion pie. It seems that not all of them need it. Homeowners might demand better terms, if they see that Uncle Sam is ready to step in and rescue them? This is a dangerous territory we are threading into. Taxpayers are right to be concerned, on how this government will spend the $700 billions that Congress recently approved.
Myth: Do you have to be late on your mortgage payments, in order to be eligible for a loan modification?
Fact: No, you do not have to be late, but it helps if you are. In other words, you will get more attention and help on your mortgage problems, if you are an intensive care patient.
Myth: Lenders are offering reductions on loan principals of borrowers, whose mortgage balances are more than their houses’ worth.
Fact: Yes, but this is very rare. If lenders start writing down mortgage balances to borrowers on a regular basis, then everyone would demand the same treatment.
Myth: Lenders are doing everything they can to assist distressed homeowners.
Fact: Fiction. They do not have enough cash and man power to help all homeowners.
Myth: Is this the start of the downfall of the Great American Economy?
Fact: No. We have survived greater challenges.
To learn more about how to stop foreclosure please visit our website dedicated to helping home owners, where you will also find direct links to all rulings mentioned in the article as well as links to definitions of all the legal terms used.
Originally published here.
Kevin Levonas operates a website designed to help homeowners stop foreclosure. The site offers free resources such as articles, news and case law studies published for the benefit of home owners fighting to save their homes.
Posted in Eager Lender Articles