Comments on: News and Notes from Inside Sources http://blownmortgage.com/2007/07/02/news-and-notes-from-inside-sources/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Mon, 09 Nov 2009 22:42:54 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: Morgan Brown http://blownmortgage.com/2007/07/02/news-and-notes-from-inside-sources/comment-page-1/#comment-349 Morgan Brown Thu, 05 Jul 2007 19:27:28 +0000 http://blownmortgage.com/2007/07/02/news-and-notes-from-inside-sources/#comment-349 Hi Schahrzad, I don't know the percentage of workouts that are approved. I will ask for just some anecdotal evidence. I think the reason that workouts aren't approved at a very high rate is that lenders don't want to delay the inevitable. If you can only handle the minimum payment on a loan and it doesn't look like any type of work out would help then they aren't going to approve you for the work out. I don't know if there are problems getting work outs approved up the ladder as well. If the end investors have criteria that they place on what work outs will be approved vs. not. On the short sales I believe that the lenders are really scrutinizing each short sale to make sure that they are getting value on their property and minimizing losses. For example there is a short sale in our neighborhood for $595,000 for a 4-bedroom home. Recently a 3-bedroom home in the same tract sold for $635,000. There is no way a lender is approving that short sale with those types of comps. I think there are the economics of the lenders that butt up against the personal finances of the homeowners and its not a matter of each individual property for the lender; but more of a portfolio performance issue where the fate of the portfolio is of greater concern than an individual property. While the home owner may be panicking the investor is not ready to start the fire sale yet. Hi Schahrzad,

I don’t know the percentage of workouts that are approved. I will ask for just some anecdotal evidence. I think the reason that workouts aren’t approved at a very high rate is that lenders don’t want to delay the inevitable. If you can only handle the minimum payment on a loan and it doesn’t look like any type of work out would help then they aren’t going to approve you for the work out.

I don’t know if there are problems getting work outs approved up the ladder as well. If the end investors have criteria that they place on what work outs will be approved vs. not.

On the short sales I believe that the lenders are really scrutinizing each short sale to make sure that they are getting value on their property and minimizing losses. For example there is a short sale in our neighborhood for $595,000 for a 4-bedroom home. Recently a 3-bedroom home in the same tract sold for $635,000. There is no way a lender is approving that short sale with those types of comps.

I think there are the economics of the lenders that butt up against the personal finances of the homeowners and its not a matter of each individual property for the lender; but more of a portfolio performance issue where the fate of the portfolio is of greater concern than an individual property.

While the home owner may be panicking the investor is not ready to start the fire sale yet.

]]> By: Schahrzad Berkland http://blownmortgage.com/2007/07/02/news-and-notes-from-inside-sources/comment-page-1/#comment-338 Schahrzad Berkland Tue, 03 Jul 2007 16:34:28 +0000 http://blownmortgage.com/2007/07/02/news-and-notes-from-inside-sources/#comment-338 Morgan, my friend called the Countrywide Loss Mitigation Dept, and was told that they approve only 20% of requested short sales. What % of workouts is approved? Why is this percentage so low? Because it's obviously better for them financially to go to foreclosure. Is it better for the servicer or better for the investor? Any insider insight is greatly needed. I was told the SDAR had a short sale seminar last week, and told their realtors they need a short sale expert on their team, bec. those guys have access to a proprietary list of insiders at the servicers. The servicers will only talk to the real estate insiders who bought the list. It's all very confusing. To date, in all my queries, nobody has ever been able to explain how/why the servicers act as they do. This is troubling, because it is preventing too many reasonable solutions to foreclosure. Morgan, my friend called the Countrywide Loss Mitigation Dept, and was told that they approve only 20% of requested short sales.

What % of workouts is approved?

Why is this percentage so low? Because it’s obviously better for them financially to go to foreclosure. Is it better for the servicer or better for the investor?

Any insider insight is greatly needed.

I was told the SDAR had a short sale seminar last week, and told their realtors they need a short sale expert on their team, bec. those guys have access to a proprietary list of insiders at the servicers. The servicers will only talk to the real estate insiders who bought the list. It’s all very confusing.

To date, in all my queries, nobody has ever been able to explain how/why the servicers act as they do. This is troubling, because it is preventing too many reasonable solutions to foreclosure.

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