Is this the Home Owner "bailout" everyone is waiting For?

Real Estate Broker/Owner with Remax 24/7 Real Estate

A new article published 2/12/2010 states that mortgage companies need to give incentives to people to stay in they home and not walk away or strategically default.

Upside down property values are leaving nearly 25% of homeowners owing more on their mortgage than the home is worth, and many are getting advised or may find it tempting to walk away even if they are financially able to keep making their mortgage payments.  The idea of this may be easier or less stressful if they “strategic default”  to get out from under the debt completely or to force the servicer’s hand for a loan modification.  It is growing concern within the mortgage industry, and I struggle with this everyday dealing with short sales, as a CDPE, and the communication breakdowns with stressed out sellers.

In the article, the Loan Value Group LLC (LVG), is proposing it is time to pay current borrowers to stay in their homes. The company is introducing a new program this past week to help lenders and servicer identify borrowers at risk of walking away and implement an incentive program in which the homeowner receives a monetary rewards, "bailout", if they stay in the home, remain current on their payments, and do not change the terms of the original mortgage note or reducing principal. The Responsible Homeowner Reward (RH Reward) program was developed on a foundation of behavioral economics and employs patent-pending technology developed by LVG.

According to the Loan Value Group, there are more than 10 million homes in the United States with substantial negative equity, representing nearly $2 trillion of mortgage debt, WOW!

This is not a proposed program the article says it is going to be implemented by a largest investors in consumer and mortgage debt in the United States. The client, who requested anonymity while they roll-out the program, has purchased and sold over $5 billion of debt since 2008. Hum, wonder who that is :)

Well your mail! I know I will!

Until next time,


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About Me: I have been in the real estate broker since 1993. I have a BS from University of Wisconsin-Madison (92). I have experience in real estate, land (subdivision) development, new home construction, and mortgage finance. This experience gives me a well round knowledge base of all aspect of a home and I use that knowledge to help sellers and buyers with highly informative sale style.

I am the first nationally certified distressed property expert (CDPE ) in the fox valley area and specialize in Foreclosures and Short sales. What this means? As a CDPE I am a skilled negotiator with banks on a national level and a savvy marketer of real estate. I set the right market determined price and convey the correct information to the banks, I can help successfully facilitate both residential and commercial situations where financial stress and market changes result in non-performing (upside down) loans as it relates to real estate property. This net result to my clients, is faster resolution and reducing long term credit damage.

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Thomas J. Otis Broker Associate; REALTOR®, ABR®, CDPE©, EAH,e-Pro RE/MAX 24/7 Real Estate 2835 W. College Ave. Appleton, WI 54914 Direct: (920) 284-8508 Office: (920) 734-0247 Fax: (920) 560-5438

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Bank Foreclosure and Short Sale Specialist CDPE: Certified Distressed Property Expert EAH: Employer Assisted Housing certified

Comments (1)

Jason Guetzkow
Palisades Title Company - Washington, DC

It seems that if anyone is keeping someone in a home in an upside down situation that they are actually helping the lender just as much as they are helping the owner.

Feb 15, 2010 02:16 AM