CHASE - MOD my loan or I walk! (article)

[SwillerAlesbane]

Homeowners who 'strategically default' on loans a growing problem -- latimes.com

How do you like me now?

[NewDad]

Geez. Did you read that part at the end?

"The Experian-Wyman study does not try to explore the ethical or legal aspects of mortgage walkaways. But it does suggest that lenders and loan servicers take steps to screen and identify strategic defaulters in advance and possibly avoid offering them loan modifications, since they'll probably just re-default on them anyway."

[caldwellb02]

Not a good morning. No good news. This seems like an assault on all of us. Of Course the payments abruptly stop! Good grief. We work and work for months and months to stay current. And we tell them that there is a month coming up that we will not be able to pay. then we have to stop. There is no way a bank will accept a partial payment. It's all or nothing. And then they say we are scammers because we are also trying to stay current onour credit cards? We are supposed to get late on those first or else we are bad people? This is War.

[Believe]

Caldwell, I feel your pain. A couple of weeks ago I read a comment by Irish Gal that summed it up perfectly for me. There is ONLY one plan these mortgage companies have in place. They may claim to have other plans, but those are only diversions from the ONE plan that they have set in stone - MAKE THE HOMEOWNERS DANCE LIKE CIRCUS MONKEYS AD NAUSEUM WHILE WE HOLD A FORECLOSURE AX OVER THEIR HEADS. I hope Irish Gal doesn't mind me repeating her post.

[Chased around and around]

Originally Posted by NewDad

But it does suggest that lenders and loan servicers take steps to screen and identify strategic defaulters in advance and possibly avoid offering them loan modifications, since they'll probably just re-default on them anyway."

What is being told about the part of mods being re-defaulted is nothing but a lie. The truth is in 2007 some 67% of mods re-defaulted, why because they were sub primers who got loans with stated incomes, that were not even close to the truth of their monthly incomes. So some sub primers made $1200.00 to $1500.00 a month and got into ARM interest only loans on some 700K-800K homes paying a measly $600.00-$800.00 a month in payments, including impounds. Then when they adjusted some as high as 10% after 2 years of course they could not pay. Banks did mods on these and of course the sub primers re-defaulted. Some had payments go from $800.00 a month to over $5000.00 a month. All of the mods had just a few dollar reduction from their monthly so they just walked.

Most of us on this board can afford our homes if we got out from under these ARMs and interest only loans.

If the banks were intelligent and not so damned greedy, make all loans across the country, 4% for 30 years. I bet you would not even see 1% foreclosures across the country...

[SBBLUEWATER1]

If the banks would follow the MHA guidelines and start issuing the permanent loan mods to those of us that qualify I'm sure you would see the walk-away numbers decline. The banks are not playing by the rules so I think many, many people are starting to look at it as a business decision of how long they can stay in the home and how much money they can save before getting kicked out. The banks are doing very little to give people hope that they will in fact get permanent loan mods and I think people are starting to really understand this. The banks are in business to make money and the way the MHA program was written up they have no real incentive to modify loans and there is certainly no mechanism in place to monitor non-compliance by the banks.

I think that one of the things that happens is that as we go through the loan mod process we start with a strong emotional attachment to our homes but as we have to send in our documets to the banks over and over and over again trying to get a loan mod the process starts to wear us down and we slowly digest ourselves of that emotional attachment. Then we start looking at it as business decision like the article points out.