I sure hope this bill passes soon. I have several clients who are waiting for a loan modification for as long as 6-8 months now, and they still have no answer...

The Hope for Homeowner's "carrot" (i.e financial incentives for banks to modify) didn't work... perhaps the the "stick" will?  It will be interesting to watch.

I don't understand Agents to who support this bill. What this means, is that mortgages will now be harder to get, for no lender in their right mind will give their loans without scrutinizing the purchase even more diligently than before.

It's interesting how things workout.  When it comes to healthcare, insurance industry is the problem, when it comes to Real Estate, it's the BANKS who are the problem.

Yes, Mr. Lender, please get my loan payment down, as I can no longer afford my house payment.  That new jet ski, riding lawnmover, big screen tv, and a small boat need my payments too.

Work with me you evil bank

I hope this passes, but I just hope that the borrowers are truly offered a loan modification that would benefit them.  I hope that the banks won't just say they tried a loan modification like the so many that I have heard of lately...just a couple of examples... bank says we will spread the 3 payments that you are behind on, over the next 6 months, so your payment for the next 6 months is going to go up by X amount.  If the borrower couldn't pay the lower payment in the last 3 months because of job loss or decreased income, etc...why do they think that the borrower would be able to make a higher payment???  Also have seen the following (in writing, I can attest to these) your payment will be lowered by X amount for the next 5 months and on the 6th month you will make your payment plus the difference that you did not pay over the past 5 months... WHAT???? It is so frustrating to see this, someone needs to step in and talk some sense into these loan modification people.  I guess they are basing their modification on "hopes that your income and financial situation will get better".  How is that any different from getting a mortgage based on... I have a job that pays me $10/hr now but can you lend me money based on that I hope to have a job that pays me $20/hr in the next 6 months??? 

It's a shame the loan modification doesn't help the small business men.  You know the ones I'm referring to..... they went to the bank to borrow to build a business on a 5 yr loan with a balloon.  When the economy tanked last year they saw their profits go down and now can't get approved to refinance that balloon.  Seems like our congress men & women should be focusing on helping the backbone of our economy "the small business men & women".  Small town banks are going under left and right the BIG Government Spending didn't help the small guys.....

What is going to happen to the economy when all the small businesses go under and all the small local banks go under and all we have left is BOA and Wells Fargo?????  I think they should do loan mods for these balloon loans too!  Make the banks change to a 30 year fixed rate. 

Great, another huge slush fund for Washington to mis-manage. How about we let the lending industry find some footing instead of changing the lending rules every 90 days. Has everyone forgotten that one of the large contributing factors that led to the current situation was well-intentioned but horribly implemented legislation in regards to lending?

Seriously, one of the largest motivating factors in life is fear. I have heard the same horror stories, but I have also heard the stories from alot of people who really can afford their current situation but have just decided they no longer want to because they either overpaid for their house, or they cannot get it to appraise for current mortgage value due to a HELOC or some other refi scenario. Somehow it has become okay to decide that the bank should have to eat the loss since they "took the risk"?

Each and every week I get people in my office who want me to help them "get one of those government mods" because they are either going to get the mod or walk away from a house they could stay in with alittle belt tightening. They agreed to pay a certain price for a certain home. Now they have buyers remorse and want everyone else to pay for it.

Sorry, I work my regular job, a second job a side job and sell things on Ebay and Craigslist. I don't like having to work that much, but in Michigan right now things are all about survival. When I suggest getting a second job to help offset costs, most clients act as though I just asked them to cut off an arm. Sorry, but the fund created by this bill will either come from tax dollars or higher costs associtaed with banking. I am already working too much, I can't afford to work anymore!

I drive used cars, I shop at discount stores, I eat what is on sale, I make coffee at home..etc. I am not saying everyone has to do it, but I am not doing to pay for someone elses poor choices. There are already programs to help those in a bad financial situation, but some of them are overloaded by people who just don't want to pay for what they agreed to pay for. Just my two cents.

Live frugally, that has always been the best defense against market flucuations.

Where is the justice for the thousands who all ready lost homes or had to short sale for lack of help at the time. If they pass the bill now, it is like a get out of jail free card. What  about everyone else ..all ready ran throught the ringer left with no money, house, credit or job? I guess "oh well..."

The argument can be made that such legislation is tantamount to financial socialism as the government would interpose itself between the parties to a bilateral contract. Such objections would be worth hearing if cause for intervention did not exist. The problem is, cause does exist. Fraud, or inducement to fraud, renders a bilateral contract voidable; meaning, the defrauded party is no longer bound by the terms of the contract. If the defrauded party received some benefit from the contract, then that benefit must be restored or repaid, hence the basis for mortgage modification. Most always this process involves court proceedings as the defrauded party has filed a legal complaint. To expect a party who engaged in less than ethical dealing to voluntarily come clean, admit fault, and recast the terms of the contract in an equitable manner does strain the credulity to the breaking point. We have given the mortgage industry the benefit of the doubt and there is no doubt that they have benefited to our loss. The proposed legislation says, "We asked you to behave and we tried to be good Americans about this but you wouldn't have it and treated us as the chumps you lent the money to; now the gloves are off, you will do what's right by the mortgagor who trusted you to do the right thing with their money and their future." I have two years worth of research into this subject. I am ashamed to be regarded as a member of America's financial establishment as a real estate appraiser. God only knows what they did with the appraisals I performed for them. Steven Davis, A`Cuara Appraisal, Claremont, Ca

I am sure there are more blogs of this nature out there.  Some feel banks made bad loans to unqualified borrowers because Congress made them.  I find that impossible to believe.  What percentage of loans do the banks actually hold?  Most are held by Gov't backed programs and other investors.  Who owns the 20 on the 80/20?  Who owns the Home improvement and LOC loans?   The banks made the money on the processing(origination).  I bet if they had to hold all the loans, they would not have made a lot of the bad ones.

Taxpayers in some cases?

I do not hear this very often.  In my opinion, the reason why all this poor legislation is passed, and why good legislation is not passed, Public options health care for example, and this  presently discussed legislation.  Simple, the senate and house committees are bought and paid for by the very industries they affect.  Modifications are going down in flames in the banking committees.

%  I think most would agree with you on Gov't intervention, if all conducted themselves with high moral and ethical standards good business practices. you would not need Gov't intervention.  Problem becomes on who's definition of those standards.  We have historically high levels of bad business behavior, high levels of bad individual behavior, and historically high levels of Government intervention.  We all were there.  The first two were proved wrong.  I hope the Fed Gov't is proved right.   I liked the Einstein comment;  It takes someone smarter than the one who made the mistake to fix it.  Bankers! 

It doesn't bother me that we are going to hold their feet to the fire (the banks).  i think they have made out allright.  Someone pointed out that the bailout money has not gone to help the homeowners.  i thought Biden was in charge of keeping track of that.  Somebody is not doing his job.  As usual, the little guy is the one paying the tab and not getting squat for it.  It majorly ticks me off.  What are our unions (to which we pay such large dues) doing about this mess?

This would not be a good idea!  Everyone needs to remember, the banking industry under the instruction of the U.S. Government and Fannie and Freddie made the decision to "open the flood gates" and make loans to ANYONE! 

Now people feel sorry for those same borrowers (renters) because they are losing their homes.  They did not qualify to own the home or refinance the home to start.  We cannot fix the system without the pain of the process.  There is no SOFT landing!

When asked about loan modification processes a few months back, Jamie Dimond (CEO Chase) said the biggest problem they were finding was that a majority of the loans requesting mods were originally done fraudulently! And the mods that they had performed were going to foreclosure anyway within 6 months after the modification date.

We cannot turn back the clock, we must proceed forward without more government injection.  Let the  lending industry work the kinks out by what they have already done with stricter guidelines.

The Politicians should be focusing on abolishing the HVCC instead.  Which has just added another reason for the market to not recover!

I think it would be easier if Government would just give every tax payer $100K, to do with what they want, save it, paydown the mortgage, invest it, bottomline everyone would benefit and the reality is it would probably be cheaper. As long as everyone is looking for someone to fix their own irresponsible activities, this would compensate the responsible people.

After yesterday's thread about the $100k tax credit, I'm really surprised to see so many people supporting more government involvement. We don't get it both ways.

To those of you who think homeowners shouldn't get a loan modification or short sale because they were financially irresponsible, I agree. But, in case you haven't heard the unemployment rate in this country has gone from 5% to almost 10% (closer to 15% here in SoCal).

There's no denying in many cases loan modifications prevent foreclosure but by the "re-default" figures these solutions are just band aids not cures. Unless loan modifications start including principal reductions, the negative equity will continue to drag down the housing market.

The banks aren't obligated to do loan mods, but should they? If it's a sound financial decision for their bottom line then do it! If not, determine the hardship and the value and tell them they have an approved short sale and move to the next one.

Unless something is done to get the banks to have reasonable standards and procedures to either approve or deny loan mods and short sales we will continue to have this mess and we can't have housing recovery until we get through the glut of inventory (shadow included) of foreclosures and distressed homeowners.

I don't believe our constitution says, we must be "capitalist" and we must protect "capitalism". It is my opinion that true capitalism in our society has failed the masses. We have listened to banks and corporations and assumed they were looking out for our best interest, just like many used to believe our doctors and insurance companies were looking for out for our best interest.

How many people were told in the last 10 years "if you don't refinance your house and put all your credit card debt or all those hospital bills to your mortgage you're just ignorant, after all, you can deduct the interest".  I watched an old gal in my town lose her house of over 40 years because someone talked her into taking a mortgage on her house to pay medical bills for her husband, who died a year later and left her with not enough income to make the new mortgage payment. Sadly, those mortgage companies used young, hungry, naive loan officers to extort money from people like this. Sometimes, much of the time, there does need to be some government or community intervention so people aren't taken advantage of like that. Do banks owe it to a lot of people to at least give loan modification a try, they sure do!!! It's a much better option for them. Perhaps give them the option, work out a loan mod or we'll investigate the circumstances in which this loan was orignated, I'm sure they would be much more eager to do a loan mod, than to be exposed to the public for some of the bottom feeder activity that was going on when these loans originated.

Susan,

To address the issue about people buying , not knowing what they could afford, I told many borrowers they could not afford the home they were looking at and should down scale their thinking, only to be told that " We have already been approved by another lender and you don't know what you are talking about, we can afford it." Off they went only to call back a year or 2 later begging for me to help them. Many home purchasers new exactly what htey were doing but you could get into a purchase for less money then a rental property with 1st last and a damage deposit, so lets BUY!!!!!

Ruthmarie Hicks, why don't you be compassionate with your OWN money?  Forcing banks to break their contracts in favor of those who default is NOT compassion.  That's BIG GOVERNMENT tyranny.

I feel bad for those who lost their job and you know what?  I blame the government for raising min. wage laws, resulting in up to 50% unemployment for college kids.  Do you think government taxes will drive the rich to open up more businesses?

Oh, and on the issue of perfect health, you WILL die if the government has it's way, as there won't be incentive for anyone to spend their cash to go inth a profession where the government will dictate how much you'll be making and how you are going to be administering medicine.

If you guys like socialism so much, why don't you move to Cuba?  I heard medicine is great there.  So great that Cubans are dying to get to the US.

As you described this bill, it forces banks to negotiate, but does not neccessarily force them to do the modification.  I'm reminded of the old saying, "You can lead a horse to water, but you can't make them drink".  I think for this bill to work, it would have to spell out the details about under which financial situations the bank had to do the loan mod.  I really don't get the banks resistance to the loan mods any way, as the numbers typically look like the bank would come off way ahead over the cost & loss found in doing a foreclosure. 

I keep thinking we must be seeing the tip of the iceberg, & that there is much more under the surface, & we probably would not like what we saw, if we could see it. 

As you described this bill, it forces banks to negotiate, but does not neccessarily force them to do the modification.  I'm remined of the old saying, "You can lead a horse to water, but you can't make them drink".  I think for this bill to work, it would have to spell out the details about under which financial situations the bank had to do the loan mod.  I really don't get the banks resistance to the loan mods any way, as the numbers typically look like the bank would come off way ahead over the cost & loss found in doing a foreclosure. 

I keep thinking we must be seeing the tip of the iceberg, & that there is much more under the surface, & we probably would not like what we saw, if we could see it. 

As you described this bill, it forces banks to negotiate, but does not neccessarily force them to do the modification.  I'm reminded of the old saying, "You can lead a horse to water, but you can't make them drink".  I think for this bill to work, it would have to spell out the details about under which financial situations the bank had to do the loan mod.  I really don't get the banks resistance to the loan mods any way, as the numbers typically look like the bank would come off way ahead over the cost & loss found in doing a foreclosure. 

I keep thinking we must be seeing the tip of the iceberg, & that there is much more under the surface, & we probably would not like what we saw, if we could see it. 

I know this may sound very simple, but; that's often times the best answer. Forgiveness is the answer here. First and foremost all home owners who bought in the years from 2003 though 2006/07 need to have there values and loans adjusted to what current appraised value is using a fixed interest rate equal to 5% across the board. This will solve the problem of foreclosures immediately.

I agree with Ryan, what's the benefit for people that make payments on time?  There should be language included in this bill to help people who are holding on by their fingernails to their hard earned good credit.  Why must people let their good credit go bad in order to get help?

I encourage everyone I know to write their elected officials urging them to support measures like this and the extensio of the 1st Time Homebuyers Tax Credit.  Spread the word.

How about letting everyone have the option of a 1 year break from making mortgage payments? Automatically add the missed payments to the principle balance. That way if someone is unemployed or underemployed they will have a chance to get back on their feet. And trying to get a loan mod is especially hard for the self-employed at this time. If anyone that wanted or needed a break from payments were allowed the one year break from mortgage payments, they could concentrate on finding work and could catch up on credit card payments. Those who are making their house payments wouldn't feel so bad because they'd know that that option is open to them if they should need it in the future and that the others are not getting away with not making payments, but rather delaying making payments. These are extraordinary times that require extraordinary measures. That's my 2 cents worth.

Well there is some need for this but it will hurt small banks even worse. I just had lunch with the president of a small local bank and he said the FDIC is killing their profits and they could go out of business if they keep taking the banks profits. Several small to midsize banks already have gone out of business and some of those never had mortgage divisions. Someone has to pay for this and it won't be the people in congress and the senate. The current Obama plan is really a joke and gives really little incentive for banks to modify someone's loan.

I agree, If the business you are in in is not profiable,AKA an Agent or Lender GET OUT, Do not expect the Government to keep programs in place so you make a living. This has been a great year for me as a lender I am just tired of all the changes. Most of my lending business plan was high end custom construction in years past, although my check has been reduced I am actually closing more refi's and purchase and sales then ever before. It is marketing not complaining that is making a difference.

Unfortunetly people have been dealing with life circumstances forever. The current conditions are considerably tougher than most post depression babies have ever had to deal with, but the point is people should have been living within their means and putting money away for the storm. I do feel sorry for those who have lost the jobs they thought were invinsible, I do feel sorry for those dealing with medical issues but these things in life have always been present and people have managed to make it through without government programs. It is all about restructuring the American value system.

I'm not really sure, but there is so much resistance from the banks to work out anything with homeowners, I have to wonder if the PMI companies' rules for paying on these loans have an effect on the bank's motivation to act quickly.

On the surface, this bill looks like it would rescue many homeowners from foreclosure, but I'm always worried that the final bill- once it gets past all the politics- may not even resemble the original bill.  (Sorry for my pessimism)

Dynamic Real Estate Network, whom will you blame next, after the banks stop lending due to tight restrictions and actually move somewhere ELSE where they can make more money?

And.. the governmetn will turn on YOU for also getting too greedy and not helping those poor homeowners realize that they are getting way over their head?  Lets regulate everyone, including Realtors, agree?  Let's dictate how much commission is fair.  After all, why is a home inspection costing $400-$1000 but a comission for the agent can run 10-30 times higher?

Don't like where this is going?  Don't think the government will stop at regulating the banks.

Anyone who is saving their money in their 401K is an idiot.  If this legislation passess, I'll not plan for my retirement, will spend on my money on toys and then let the government take care of me.

Hey, let's be compassionate here.

And so the Story goes:  The Highly Educated TOO Big Too Fail Financier's they were sailing there Wondrous Big Unsinkable Ship at the high seas all seemed well. The many aggressive agents had booked the voyage solid for all wanted to ride and they were well rewarded but the All Knowing TOO Big Too Fail Financier's they navigated carelessly and then they hit something and there Wondrous Unsinkable Big Ship it stopped dead in the water. They saw a young fellow and said Here hold this wheel you are the New Captain well be right back and they ran to the bailout life boats and abandon all too small too save on-board young and old rich and poor , agents and all who were bound in steerage by there boarding pass contracts as the young Captain grabbed the wheel wide eyed and who wouldn't . But little did he know they hit an Iceberg and the Wonderous Big Unsinkable Ship was now sinking so now here is his dilemma should he try to fix the problem saying Lets make a heroic repair to save what we have to get to Port and relieve all the pain and suffering  of this catastrophe to then reestablish sea worthiness or should he say let US sink We should have known better than to book passage with the previous Captain , crew and associates "And the Band played on"

A loan modification done correctly could assist in getting our economy back on the right track.  As most anyone will tell you, the nation is pretty much moving in the right direction if construction of homes is.  With the high cost of materials, many would be homeowners had to choose not to build, or to build less.  My clients are decent hard working people.  Some have older cars, some newer.  Some may even have the big screen TV's, but what has that got to do with the price of eggs?  If there jobs had not been eliminated or sent overseas, then they could have continued to pay their bills on time.  My heart goes out to the families that contact me and tell me that their life is totally upset by the economy.

The News Media has had a wonderful ride of telling everyone how bad the economy is.  Say your foot hurts long enough and it will begin to hurt.  The News Media can't sell positive statements !

I don't know if loan modification will be the magic bullet, but watching people suffer is certainly not a stress relief either.  I don't think the average homeowner is trying to be Barney Madoff and abscond with the fortunes of others.  Home values have sunk to the level that most cannot sell their homes to get out of their situation.

Dear Private:

There is plenty of blame all around...the banks are not going anywhere.  They received plenty of bailout money and they are not using it for what it was intended instead they are buying smaller banks that failed and already have new products so please don't feel sorry for the banks....they always come out ahead or have you not noticed your new interest rate, cut on your credit limit, new bank overdraft fees, etc.  They know how to make plenty of money right here.

Private....why can't you show your face or name.????

..and a house inspector gets paid upfront for his work or immediately afterwards, we Realtors on the other hand may spend hours and hours working with buyers, marketing a listing, doing a short sale and may never get paid but that is the risk we take.

You are so luckly that you were able to foresee everything and make all the right moves...thank your lucky star for the crystal ball and the foresight that you have. and that you can admonish the rest of us for not doing the right things at the right time.  Kudos to you and may you continue to be lucky in business and your personal life.

The rest of us will continue to try to do what we can to help those that are struggling to keep their homes, find loans to buy new homes and continue to survive, thrive and change with the times.

Feel free to send more personal comments to my blog instead of taking Claudettes blog to counter my comments on her post.

My apologies to Claudette and the rest of those that have to read this.

Alot of great posts , recently had a client that wanted a mod to keep from loing their second home the bank was only willing to drop the rate from 6.25 to 6.0. They are giving loans out all day long at 4-5%. a 4.5-5% would have kept them from loosing it but BOA(previou;y countywide) would not budge they said they would rather do a short sale! just keep in mind they will only be able to get 40-50 thousand for this condo and have to eat close to 110,000 plus expenses. maybe the bank don't like the negotiator, but what ever it is they could have lost "30,000 in interest" over the period of the loan and got all the principle money back.  50k vs 230k. so are they making sound decison in this case no! should the home owner got a little more help probably! but why should they care wnen they get bail out money?

Why does the government have the right to take away the rights of the bank.  There is a contract between the home buyer and the bank.  When that contract is breached, the bank should have the right to reclaim their assets.  The home belongs to the bank after all...not the buyer.  It is the fault of the buyer if they default, they should have put money away for a rainy day, and if they could not do that they should not have over stretched their finances.  It's sad that so many people do not take care of their financial obligations but it's not the banks fault.

BANKS DON’T LEND THEIR OWN MONEY,

THEY LEND OTHER PEOPLES MONEY!!

I have read all these comments and I can’t believe what I’m reading!!

I have been in the Real Estate Industry 39 years and cannot understand how a Real Estate Professional could not know how the lending system works.

Basically Banks have always lent money put under their care by you, me and others. That is why they talk about the funds deposited in the Bank being insured to $250,000 by the FDIC.

Bank profit is generated by the spread between what the Banks pay us and what they can get borrowers’ to pay them.

The Banks have a fiduciary obligation to us to try and protect the principal and interest they have agreed to pay.

The Federal Reserve sets the amount of money they have to keep in reserve to insure the repayment of our principal. The Banks can’t summarily give away or forgive what has been agreed in writing to be paid back to the investors (us) without the people who gave them the money agreeing to take less (i.e.: loan modification).

40% of all monies lent in our country came from investors overseas like from: China, Russia, Europe and Asia. How is a law created by our Government going to force them, the ultimate lenders to take less? Who’s going to enforce the collection of those penalties?

If the Federal Reserve dictates the Bank reserve requirements and also determines who is insolvent by whether or not they meet the Federal Reserve’s arbitrarily determined numbers, aren’t they creating this crises and the inability of Banks to have excess capital to lend (TARP funds)?

This means the Federal Reserve is controlling the number of smaller Bank failures. Ideas like this are why no investors are willing to lend in the secondary market to create new financing for anything other than Government guaranteed/insured FNMA /FHA type loans.

The "Preserving Homes and Communities Act" is nothing more than a continuation of the transfer of wealth now going on in our current Government policies. Who do you think is going to be providing the money for?

“For borrowers who do not fit into this program, the bill would create a multi-billion national fund for states to make loans or grants in order to prevent foreclosures.”

Loan Modifications currently have a 40% failure rate according to the Government.

This policy will only extend the length of time there is a drop of home values across the country as the continual REO determining value mess is extended by the non payment of "loan modifications plan" fail.

Thus providing a continual feeling of no hope for the future by homeowners as they watch the dropping equity in their home investment. Not being told they could go back from the great depression forward and see over time the value of Real Estate has always gone UP!!!

Daniel O. Boor

BROKER/REALTOR

WONDERFUL!  I think it's about time someone does something on behalf of the borrowers...it just makes common sense.  But.... we know that some of these lenders don't have this, do they?  After all wouldn't you rather have the borrower pay something rather than you (lender) have to pay for holding cost, etc.   Great INFO!!!

Dan,

You are correct as I have a chart that even with the highs and lows, Real Estate has averaged 3.3% per year since 1989. Yes there were some huge drop years but there were also some over priced run ups. Anyone in Real Estate should know that the 100 year average is an annual appreciation of 3-6%.

I hear what is being said... but in this market, with banks only giving 1-2 percent interest (am I'm being generaous) on savings or CD's, it is my understanding that Banks make most of their money on FEES they charge YOU and I.  They agree to protect the principle and interest they have agreed to pay, ...then what are they (lenders) getting when a property sits, and sits, and sits?  They go up on Fees,(nickel and dime us), and the principle and interest they have a fudiiciary responsibility to pay us, becomes null and void so to speak.  Huge Spread....You pay me 1 percent or less, collect 4-8 percent ???   It would be interesting to learn WHY 40 % Loan Mods Fail.  This would be something to explore!

Thank you for your post. If I'm not mistaken, one of the reasons the banking industry got so much money so quickly from the stimulus package was for them to try to help American homeowners keep their homes. If they received money to stay in business, homeowners should be treated with understanding, especially if they are responsible borrowers who have been hit by hard times.

Evelyn Santiago,

Apparently you have not read the Wall Street Journal editorials in the past, explaining how government sponsored (NOT PRIVATE) Fannie Mae and Freddie were taking risks FAR BEYOND those of the private companies

http://online.wsj.com/article/SB1014169323358510560.html

It seems that Fan and Fred, two "government-sponsored enterprises" that hold the majority of all home mortgages in the U.S., have been growing their debt at an annual rate of 25%. They now have about $2.6 trillion in debt outstanding, a big number in any case, but really big considering that taxpayers are on the hook for it. The budgeteers also expressed some anxiety about Fan and Fred's increasing dependence on derivatives.

and another quote

Last year, Fan's debt/equity ratio was about 60 to 1, more than five times the average for commercial banks. Moreover, as mortgage lenders, Fannie's equity can hardly be said to be well-diversified. Risk thus becomes a critical question.

This article was written in 2002, a while before the mess we are in now came to fruition.

So, Governmtn IS the problem in this case.  A BIG problem.

Regarding fixing Real Estate Agent's comissions, you say:

we Realtors on the other hand may spend hours and hours working with buyers, marketing a listing, doing a short sale and may never get paid but that is the risk we take

Yes, but the banks are in the same boat, are they not?  They took the risk by giving the money they have been entrusted with to the buyers and the buyer is now not paying them.  Why can't they sell the collateral?  Why should they be required to TRY to keep that buyer in their house?

How would you, as Realtor, feel is you have been forced to help the buyer until THEY decided to buy a house?  What if you could not say "NO, Mr. Buyer, I'm not going to drive you around the whole metropolis for free"?

Oh, and if the buyer found a house they liked, but could not come up with all downpayment, why should YOU not be required to reduce your comission so that the buyer can get the house they want?

Be compassionate here!

Sterling Mortgage, you are right now.  Further more, I know people who blame Real Estate Agents for the rising prices.  Realtors, they say, should not have been listing the houses so high.

After the government deals with banks, I think Real Estate industry could be next.  just watch.

Sterling Mortgage, you are right on.  Further more, I know people who blame Real Estate Agents for the rising prices.  Realtors, they say, should not have been listing the houses so high.

After the government deals with banks, I think Real Estate industry could be next.  just watch.

Ryan Servatius,

With regards to your comment below,

Joel, it's great that you are willing to help others.  Noone is against helping others, and that is why you'll find CONSERVATIVES as a whole donating MORE of THEIR money to charities, churches, etc...

The problem WE have is when we are FORCED to help the irresponsible.  And the society is truly in troulble when the bad choices are exused and those who have made the RIGHT choices are punished by being forced to bail out those with poor choices.

Btw, I can't qualify for a mercedez right now.  Will you help me buy it?

I urge every Realtor to support the new Preserving Homes and Communities Act to force banks and lenders to address loan modifications with homeowners now.  The rate of foreclosure is staggering and will continue to rise.  In Phoenix, our foreclosure rate has increased 85% this month alone.  Homeowners need your help now.  It is appalling what the banks are being allowed to do after the bailout by the tax payers!  Sellers are waiting up to a year and a half (Countrywide)for approval on short sales of their homes (because lenders will not modify their loans)and the market continues to decline.  Homes a left vacant, many for more than a year,interiors destroyed from vandals and landscaping ruined for lack of water.  This alone, drives the market value of area homes down, let alone the neighborhoods.  We are in a crisis and it is time that our elected officials act now on behalf of the American Homeowner!

I understand that their is no cash benefit for the person that pays their bills on time but the real benefit could be that their own home values stop declining.  The other positive is that you can go to sleep at night without worrying how you're going to make it.  Like many homeowners, I purchased my home for the long term but when pricing decreases from $900,000.00 to $400,000 and I owe $695,000.00 when do we say enough?  Will I ever see my value increase to this level again or at least to what I owe.

I've been a in real estate for the past 27 years and I have never seen anything like this.  I'm not one of the Realtors that made a fortune during the boom because I would not recommend my clients pay over appraised price or take a loan that would only hurt them in the long run but a great many others did!

Is it fair that the 2 sales agents in my neighborhood that purchased 12 homes among themselves and their families and have now walked away go unscathed?  Since the new home sales market has come to a halt they are now working as Realtors preying on the home owners they sold new construction to and advised them to do 125% financing and are now talking them into short selling their homes. Or they lied and let the investor purchase a home they knew they were not going to occupy.

Is it fair that my median sales price was $400,000.00 and the average commission was 3% and now my average sales price is $125,000.00 and the average commission is 2%.

There is one thing in life that I have learned and that is, nothing is ever fair!  So life is not fair.  Suck it up and help your neighbor because it's the right thing to do.  Support and encourage your elective officials to support Preserving Homes and Communities Act!

Thank you.

Excellent comments from all sides. Louis (#75 )had some great ideas that could really help.Personally,I'm very happy that my Senator Jeff Merkeley is a co-sponsor of this legislation.

Attempting to modify a loan should help all of us; homeowners who are current or own their homes outright benefit by not having to watch their equity fall due to a rash of foreclosures or short sales which devalue their property. I'd rather see my neighbor stay in their home than see it sit empty, get foreclosed on or worse. Rent backs by the bank should be an option. If a bank already loses during the foreclosure process, then why not attempt to mitigate a % of that loss; that benefits their shareholders, the bank, and the current mortgage holder.

good

inurl:blogsview site:activerain.com

Great article! My mom was turned down for a loan modification with her lender and was then scammed out of 4k by a company in Florida. She then hired an A rated company in Glendale, Arizona named Mortgage Assistance Group and finally got a real loan modiification. Their information is below. We as consumers should really start keeping track of the good guys in the industry.

Mortgage Assistance Group

www-mag-az.com

623-486-4505

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