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This is why homeowners are screwed. You can either read this with an open mind or continue to believe in loan modification fairy dust. There are also a few bad words here and there to emphasize the vulgarity of this subject.

It has been three years since I started preaching the loan modification gospel from my blogging pulpit here on LoanSafe.org and over on my other blog, LoanWorkout.org. I have come to the conclusion recently that the vast majority of struggling homeowners who cannot maintain their current mortgage contracts are on the foreclosure creek without a loan modification paddle.

They are simply and 100% unequivocally screwed. There is no other way to put it. I am not going to sugar coat these shitty mortgages any longer. If it tastes like shit, looks like shit, feels like shit and smells like shit, then by golly, it's shit.

I am asking the media, Congress, banks, Obama and anyone else who will listen to please just be honest with the people who are losing their homes. Inform them they are up foreclosure creek without a paddle. So, lets stop the loan mod chit chat. There is no reason to reason to put lipstick on the mortgage pig for any longer.

So why such loan modification doom and gloom from Moe?

Hell, I have researched and blogged about loan mods more than anyone on earth. YES, more than any living soul on planet earth. I have seen and or counseled thousands of homeowners in the last 3 plus years. I guess you can call me somewhat of an expert on this subject. So, I tend to know what is "really" going on out there with people who are attempting to save their homes.

What is really NOT going on are loan modifications. They never have been, nor will they ever be.

So, why aren't banks saving homes and or the government making laws mandating it? Simple, loan modifications do not stimulate the economy. Hence, there is no money in helping people saving their homes. The money is in new home loans, refinances and home buying. Just off one new real estate transaction,hundreds of people will be stimulated. The money trickles to the broker, loan officer, underwriter, processor, agent, lender, title firm, notary, inspector, appraiser, Wall Street, city governments, state governments, Feds and the list can go on and on.

With a loan modification, really only the homeowner who may or may not be able to keep making payments is stimulated.

This is simple real estate economics.

1. It is NOT the banks money, but depositors (AKA you and I) taxpayers (AKA TARP) and investors (AKA Wall Street). Hence, what do they have to lose?
2. The buying and selling of real estate is 25% of our economy
3. Loan Modifications are 0% of our economy or maybe .0000001%
4. A loan modification is not good for the economy in general. It is only good for "your" family's economic world
5. A loan mod does NOT stimulate the economy even 1% of what one new real estate and mortgage transaction will
6. In order to bring homes down to an affordable level for this fresh debt meat, you all who cannot abide by the terms of your mortgage contracts must lose their homes in order for the new meat to buy them. We are not there yet
7. Once this starts to happen, jobs come back in because people are buying and selling homes
8. It is not personal, it is just American business.

The sooner we all come to terms with this, the better off we will all be. Loan mods are obviously not in the grand plan and never have been. Is this the way I want things to be? NO! But it is what it is and I cannot lie for the sake of making you feel better.

Let's take a look back at the various programs, plans, guidelines, press releases and propaganda over the last three long years to prove my theory here:

From Hope Now we were left a little hopeless so we instituted the Hope Line that really made us frustrated so we switched it to Hope for Homeowners then we realized we had to leave No Homeowners Left Behind so we had to keep them FHA Secure through the FHA Modernization Act via the Emergency Loan Modification ACT of 2007 so we could provide them the Emergency Economic Stabilization Act of 2008 in order to make the Making Home Affordable, but them we realized we had to change course with the Home Affordable Modification Program and finishing it off with a foreclosure bang with the Hardest Hit Fund.

No, I do not wear a tin foil mortgage hat either.....

How many plans and programs do we all need to understand that homeowners are on their own? Personally, I think the sooner we all realize this fact, the sooner we will be on the road to recovery.

Unfortunately, most people will never get this fact or they fail to recognize it because they are waist deep in their own personal great depressions. Homeowners make irrational decisions as they try and bail themselves out of a sinking real estate boat. I don't blame them. I am just trying to assist them as I try to open their eyes to their true realities. Some listen, some don't.

If you are listening to me, you need to understand that the real estate and mortgage markets were never designed for people to stay in their homes for 30 years and pay of their mortgages. They were never designed to offer loan modifications and stop foreclosures. It was designed and managed to perpetuate buying, selling, refinancing and speculation. Real estate and loans are Main Street's Wall Street or legal Vegas.

Unfortunately, if you are underwater and or in foreclosure, then you lost the bet.

You can cry, kick and scream at the banks or government all you want, but it is really just a waste of your energy. That energy would be better spent on improving yourself or life somehow. Maybe you can figure a way to make more income by starting a business or a new career that will fit in our new economy. I am just trying to help you "get" the fact that you may be fighting a losing battle by bailing out a boat that is going down like the Titanic.

Let's stop sugar coating things to make them appear to be sweet deals and programs when they are really BS or should I say rather shitty. The sad truth is saving homeowners is not good nor wise business for our banks or government. Thus, you are all being sacrificed to the foreclosure gods for the greater good of man kind who is waiting on the side lines to take your place.

It's a hard pill to swallow, but gulp.........

Sources:

LoanWorkout.org: FHA Secure

Forbes: Hope Now Alliance announces new guidelines to help troubled borrowers

BusinesWeek: 'Hope Now' Hot Line Frustrates Borrowers Needing Help Now -..

NPR: Federal Program To Help Homeowners Takes Effect : NPR

New York Times: MORTGAGES; FHASecure: How Much Help? - New York Times LoanWorkout.org: FHA Secure Flop. Only 266 Borrowers Have Been Assisted!

Money CNN: Next steps for FHA bills - Dec. 17, 2007

LoanWorkout.org: Emergency Mortgage Loan Modification Act of 2007 | LoanWorkout.org

Wikipedia: Emergency Economic Stabilization Act of 2008 - Wikipedia, the free

LoanWorkout.org: Will Project Lifeline be Another Foreclosure Flop?

Orginla Post: LoanSafe

Q.Dear LoanSafe.org, I have come to a conclusion that I would like to sell my home instead or continuing trying for a loan modification. It has been hard over the past few months to pay the mortgage payment, but somehow I am able to manage it. I’m not at all worried about having to short sale my home because I only owe 150,000 and my home has recently been appraised at $210,000.

My question to you, “Is it possible to sell my home without a real estate agent? The only reason I ask is because I would like to come up on as much profit as possible for a down payment on my next home.”

A. Selling your home without a real estate agent can be an efficient method to help cut out the middle man and save some money, while making as much profit as possible from your home. Realtors do make selling your home a lot easier, but it certainly can be done on your own.

To read more information on this article, please visit LoanSafe.org

Ocwen Financial Corporation, servicer of subprime mortgages, continues to direct the industry in main routine metrics under the government’s Home Affordable Modification Program (HAMP).

The U.S. Treasury’s just-released HAMP record card verifies Ocwen’s better performance on three critical fronts: % of trial modifications changed into permanent solutions, aging of trial modifications and a new metric initiated in this report card, “Trial Length at Conversion (months).”

The report card shows Ocwen’s Trial Length at Conversion is three months, significantly faster than the four to over seven months accounted for the larger banks that are HAMP servicers. A three-month trial length is certainly better, as three monthly payments must be received by the servicer from the homeowner on a trial modification before it can be converted to permanent status. Only one other HAMP contributor was able to attain a three-month turn time on its conversions.

For more information on this article, please visit LoanSafe.org

Today’s mortgage rates have officially hit all-time record lows according to Freddie Mac.

The average interest rate for a thirty-year fixed rate mortgage yesterday was at 4.65%, this is down from last week when the thirty-year fixed averaged 4.75%. This time last year the average rate for this type of loan was 5.42%.

To read more information on this article, please visit LoanSafe.org

State Housing Finance Agencies in several states such as California and Nevada can start using $1.5 billion in “Hardest Hit Fund” foreclosure-prevention funding in plans approved today by the government. This aid will support pioneering local plans to assist struggling homeowners in those states, as part of the original round of funding available from this program.

“These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure,” said Treasury Assistant Secretary for Financial Stability Herbert M. Allison, Jr. “While we’ve made important progress stabilizing the housing market and keeping responsible families in their homes, the Obama Administration will continue to do everything it can to help those who are struggling the most during this difficult time. Today marks an important milestone for delivering relief to homeowners through the Hardest Hit Fund program.”

President Obama established the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (”Hardest Hit Fund”) in February 2010 to provide targeted aid to families in the states hit hardest by the housing downturn. The states accepted to collect aid today as part of the first round of supporting provided through this program each experienced a 20% or larger decline in normal housing prices.

To read more information on this article, please visit LoanSafe.org

Fannie Mae has publicized that fresh mortgages will not be backed for 7 years if the borrower has walked away from a mortgage in the past although he or she would have been able to afford the monthly payments or even though he or she would have been able to find a first-rate faith substitute by communicating with the lender.

Even more so, they will also be suing strategic defaulters in states where these approaches are allowed in order to recover the losses they dealt with as a result of the truth that certain people have decided to walk away even though they had more options.

While this account seems two-faced especially given the fact that it comes from Fannie Mae, this much is exact: more people are becoming financially reckless and this problem is affecting everyone as a whole.

For more information on this article, please visit LoanSafe.org

Booms and busts can pretty much be considered opposites if you stop and think about the meaning of it. During a boom such as the one we had experienced a few years ago, nearly everyone is content enough to think about the worst. However, during the bust mostly everyone is pointing fingers and looking for someone to blame.

It is true that some people buy homes they cannot afford, then add cars they cannot afford; and let’s not forget about the useless wants that people buy simply for the pleasure of it all such as several large screen TVs, expensive phones, laptops and the list could go on and on. The consumer in us feels right at home during a boom and the operative word is “want”. Not everyone is guilty of this but many in America had participated in the previous decade of mass consumption. Regardless of what people say, mostly every-one’s mortgage hands are dirty.

We want to have the best looking home on the block, the nicest car, and the best possible life. Most people feel that way, and are even willing to make unwise decisions in order to at least try to “fake it to the top”. Are lending institutions blameless in all of this? Of course not! Borrowers want to have, lenders want to take and both parties are willing to let common sense take a day off during a boom.

To read more information on this article at LoanSafe.org

Mortgage rates continue to remain at very constant levels as the average rate for a thirty-year fixed home loan remains at 4.75% today, unchanged from yesterday. With mortgage rates this low it's no surprise why so many people are looking to refinance their mortgages. New home loan applications are also still up.

You will find that many of America’s leading lending institutions including Wells Fargo and Bank of America are offering rates this low to qualified home buyers. Always remember to shop around for the best deal possible before dedicating to a brand new mortgage.

For more information on this article, please visit LoanSafe.org

Oregon Attorney General John Kroger today proclaimed two settlements that will supply refunds to homeowners in Oregon and completely ban two connected Orange County California firms from doing anymore loan modification business in Oregon.

“This office is committed to stopping abuses in the mortgage industry that harm Oregon consumers,” said Deputy Attorney General Mary Williams.

The Oregon Department of Justice investigated claims that Noah Savings Mortgage violated Oregon state law by collecting upfront fees for mortgage modifications aimed at stopping foreclosure. The investigation also looked at charges that Liberty Law Firm asked for to collect advance fees for loan modifications. Both firms were involved in the investigation.

See full article at LoanSafe.org

Today, the lead Cabinet secretaries from the United States Interagency Council on Homelessness (USICH) – from the Departments of Housing and Urban Development (HUD), Labor (DOL), Health and Human Services (HHS), and Veterans Affairs (VA) – joined Executive Director of the USICH Barbara Poppe to announce and submit to the Congress and the President the nation’s first complete strategy to stop and end homelessness. Domestic Policy Council Director Melody Barnes accepted the proposal on behalf of President Barack Obama.

The USICH is chaired by HUD Secretary Shaun Donovan and the Vice Chair is Labor Secretary Hilda Solis. The small member agencies span the nation’s housing, human services, health job, and education to manage the Federal response to homelessness and to build a nationwide partnership at each level of government and with the private sector to lessen and put a stop homelessness in the U.S while increasing the effectiveness of the Federal government in helping put an end to homelessness.

“As the most extensive and ambitious plan to end homelessness in our history, this plan will both strengthen existing programs and forge new partnerships,” said Donovan. “Working together with Congress, state and local officials, faith-based and community organizations, and business and philanthropic leaders across our country, we will harness public and private resources to build on the innovations that have been demonstrated at the local level nationwide. No one should be without a safe, stable place to call home and today we unveil a plan that will put our nation on the path toward ending all types of homelessness.”

To read more information on this article, please visit LoanSafe.org