More & More people are taking the easier road...... Should they?

By
Mortgage and Lending with Mortgage Resource Plus NMLS LO#138228

 

Left and right more people are taking the easier road if it is really easy and leaving their homes behind. I spoke with an agent that knocks on people's doors on behalf of the lender and offers 2,000 to 4,000 for them to leave now so that they don't destroy the home.

Would you take the offer or would you ride it out to the end and them move?

It seems so unreal that our conversation's day in and day out, on the TV & on the radio are about leaving our responsibilities behind us. Understandability people have had pay cuts, lost jobs, or had to start all over. It seems that if the banks are offering people money to leave on a moments notice why won't they modify the current loans for the sake of leaving the homeowner in their once dream home, make the payment more manageable for them?

 

If you were a consumer and you got a call from your current bank saying, Mrs. Jones we see that is getting difficult to make your house payment.

"Oh we understand that your husband lost his job. OK let's see if we can help you out and get you a more manageable payment for a while. How does that sound?" YOU WOULD FLIP OUT!

We should be having more success stories like that. Homes would stay in tacked, Consumers would feel better about their banks, neighborhoods would not be depreciating as fast. If banks could help out their current customers then the focus for Realtors and Lenders would be the renter, the first time buyers or those relocating.

 

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Rainmaker
1,431,803
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

YOu are so right.  Big banks are going to pay a big price for how they have treated the consumers, not for what happens to the consumers.

Feb 04, 2010 03:59 AM #1
Rainmaker
260,556
Lisa Delzompo 951-704-4559
PRW Lending, Inc - Temecula, CA
Experienced, Trusted, & On Your Mission: Home

I believe the problem is the size of the money we're talking about (hundreds of thousands of dollars versus about $3000), and the fact that many of these borrowers who are losing their homes did not qualify for the payment they were taking on originally, nor would they qualify under current lending guidelines for the payment that would be associated with either simply lowering the rate on the old (high) balance, or reducing the principal balance of the loan.  If the borrower's debt-to-income ratio tells us under current back-end ratio guidelines (i.e., that the monthly debt is so high compared to the monthly income that we know at some point that borrower will struggle with and/or fail to make the new payment as well), then I don't see how the bank has the choice to try to keep that person in the home.  If the person is one of the small minority that would qualify if the loan were modified, then I believe incentives are out there for banks to go ahead and make that loan modification.  Thank you for the post.

Feb 04, 2010 04:04 AM #2
Rainmaker
621,734
Deborah Byron Leffler BzyBee Real Estate Lady!
Keller Williams Realty Boise - Nampa, ID

Oh you are so right!   Seems so simple but I don't truly think people even get that if they take the "easy" way out there still might be ramifications later on!   I think they should negotiate til the end.   So many I have talked to .... haven't even talked to their banks yet!  Yikes!!!  It won't go away!  

Feb 04, 2010 04:05 AM #3
Rainmaker
44,817
Natalie De Leo
Mortgage Resource Plus - Southfield, MI
Former Realtor now Mortgage Consultants

Thank you for the comments. I am from the old school and have lived through all of the changes as many of us have. You are right many people got it to these loans not being able to qualify.

The loans purpose were for the convenience of the stable income professional person with little debt and long history of employment.

If we could get the banks to look at this crisis differently then the best use of our time would be focused on the new business at hand. Getting first time buyers, move up buyers, and educating for our future clientele.

Thank you once again for your opinions!!!!!

Feb 04, 2010 04:13 AM #4
Rainmaker
1,938,042
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

You know keeping the current owners in the house and reducing their current loan balances is starting to make sense to me !!!

Feb 05, 2010 08:07 AM #5
Rainmaker
44,817
Natalie De Leo
Mortgage Resource Plus - Southfield, MI
Former Realtor now Mortgage Consultants
 

Michael- You are absolutely right! Thank you for your support. Less short sales, Less Short Payoff Refinances, we still would have the foreclosures that already exist but won't it be a better use of your time finding the renters that could buy the foreclosures. Take these houses off the banks books and take the people foreclosed on and find them the rental property. Now refer those people to a mortgage broker to educate them on the re-establishing credit for your future purchase 5 years down the line. Win, Win.

Feb 05, 2010 11:27 PM #7
Rainer
225,444
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

I think that the borrowers need to be held accountable for the damage the fact that backs are give people money to leave a loan that they have not paid on in months?   hold to original borrower accountable. 

Jan 11, 2012 11:10 AM #8
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Rainmaker
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Natalie De Leo

Former Realtor now Mortgage Consultants
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