Is our government lying about mortgage modification?
I was interview on a local radio station about the current mortgage crisis in the U.S. and the listeners thought I cleared up some of the questions that the government and banks haven’t been willing to answer in a manner that they could understand.
Point #1 – why don’t the banks just modify their mortgage when it would allow them to stay in their home and pay something to the mortgage company? What the government and banks don’t want you to know about is that they have 2 contracts. One with the mortgagee and one with the underwriter/investors. Even if the bank uses its own funds to secure a mortgage the bank has a contract with itself and the only legal procedure is to foreclose on the mortgagee. They cannot just make up the rules as they go because the federal banking auditors will have a field day when they audited their books.
Point #2 – this proves my point in a ABC News Report stated that only 1.7 million home mortgages where modified but only temporarily and only 170,000 where permanent. That is nothing and it proves my point above that modification is very difficult.
Point #3 – when a bank forecloses do they make any money. Well it depends on if they had private mortgage insurance which almost every mortgage company slipped into the contract during the easy mortgage boom. If the mortgage company has a 3rd party investor or they sold the loan and they are just servicing the loan (ie collecting monthly payments) they have nothing to lose as a matter of fact some mortgage servicers can actually end up in-charge of selling the property at a lose for the investors for a fee.
Mortgage companies are really not interested in modifying mortgages because its not in the interest of the banks. You might be asking well way are so many banks being closed down? That’s mainly due to the under capitalization of the bank. If they take a property back they have to up the amount of cash they have in deposits if they don’t have it the FDIC can step in to protect the depositors in that bank.
I have a personal friend that is a banker but ___________ has not been willing to answer that question for me because __________ feels that if I wrote about it it could lead back to ________. There’s more to it than just shutting banks down and I’m going to find out ASAP!
The video stated that most of the people just decided to quite during the process, but the facts are that the process is set up to make them quit. I recently found out that the mortgage companies hardship department could tell you to stop paying your payments and their collections department would instantly start the foreclosure process and when the homeowner tried to have the two department talk to each other they refused. And most of them lost their homes!
We’ve got to do something about this!
