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Banks Forgive Mostly Worthless Seconds

Posted in Second Mortgages

The Second-Mortgage Shell Game By ELIZABETH M. LYNCH   Thanks to the New York Times IN January, federal regulators announced an $8.5 billion agreement with 10 mortgage servicers to settle claims of foreclosure abuses, including bungled loan modifications and the wrongful evictions of borrowers who were either current on their payments or making reduced monthly payments. Under the deal, announced by the Federal Reserve and the Office of the Comptroller of the Currency, the mortgage servicers will pay $3.3 billion to borrowers who went through foreclosure in 2009 and 2010 and an additional $5.2 billion to reduce the principal or the monthly payments of borrowers in danger of losing their homes. Those numbers might look impressive, but the deal is far too modest to be a credible deterrent to reckless foreclosure practices. Consider the last big mortgage settlement. Last February,...

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Happy Clients

Posted in Mortgage Modification, Principal Reduction, Second Mortgages

I only post a quarter of the modifications we complete, and I have not posted any of them for some time.I will get caught up on that job when we get back from our road trip vacation. But I just have to post this letter from a client regarding a modification that is just now wrapping up. This is a big, old, charming house with a view in a city north of Seattle, the kind that requires a lot of upkeep. The clients owed around $550,000 on a property with a Zillow value of $458,000. They had a 7.5% interest-only loan on the property and were paying around $3,200 per month plus taxes and insurance of around $900. The monthly payments of around $4,100 were killing them, and they had no money to pay for needed repairs. The client...

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