Los Altos Real Estate Blog

Hi Bryan... very well said... I also hope that NAR jumps on this...

The banks still have to agree to the refinance. They only get compensated a portion of the writedown, and only if the customer is current. What is the bank's incentive to lose tens of thousands of dollars per customer, if the customer is still current on their mortgage?

I'm going off of news reports of the basic terms of the short-refi. The settlement is only one day old, so the details have not yet hit 'Main Street".

We'll know in a about six months if this program is a success or just another dead-on-arrival experiment.

Wait a minute... $2,000 multiplied by an estimated 750,000 illegal foreclosures doesn't add up to $25 Billion... where is the rest going?

Nice to see someone wrote about this subject.  I have been thinking about it all day.  Quite frankly I need some time to calm down a bit before I can intelligently voice my opinion however I am happy to see the conversation starting.  Besides the homeowners who suffered unnecessarily there are many who suffered unheard which are never mentioned such as builders, developers, real estate professionals who lost their businesses and more.  From what I have read not many are speaking positively. 

Tennessee's reputed 149 Million share in this agreement is a sham.

The losses are staggering and loan officials with Bank of America, J.P. Morgan Chase, Citi, GMAC/Ally Financial, and Wells Fargo are notorious for being intentionally vague, ambiguous with borrowers and consistently delay the mitigation process to suit the needs of the loan officials rewriting the mortgages while outrageous, usurious and uneccesary servicing fees are packed into the new financing documents.

If and when the courts approve the disbursement of the agreement hundreds of thousands of homes will have already entered the foreclosure process and the losses will increase.

Even with the assistance, stellar credit is needed and a consistent record of timely payment is mandatory to refinance any mortgage.

Claims that this program brings the loan current and continues paying the mortgage for up to 18 months with $25,000 total in this state, through a zero-percent loan that’s forgiven if the homeowner stays in the home for five years, will not prevent less-than-scrupulous borrowers from stealing the additional equity, and they will most certainly capitalize on the opportunity to skim the money violating the program within the five year residential requirements.

In addition to the fact that this questionable agreement with the banks hasn't been approved by the courts, the Federal Housing Finance Agency is suing all five of the banks in this agreement for underwriting billions of dollars in fraudulent mortgage backed securities.

This agreement and these 5 banks are both nothing more than a wolf in sheeps's clothing. They want to appear penitant and they're seeking exemption from prosecution for unconscionable, greed-driven, and egregious fraud schemes carried out by dirty loan sharks who swindled millions of America's homeowners.

And what's worse, the Realtor brand is becoming questionable with the recent resignations of hundreds of thousands of members.

Where was NAR when all this S$!@ hit the fan ?

Wining and dining their executives on your dime along with that bogus Political Party Survival Initiative blabber and on the road in their new NAR million dollar tour bus that you paid for ?

My suspicion is this deal will end up the way the rest of them have.  By the time the administrative fees are deducted and all the back room deals are done the homeowner that might have benefited from a refi or mortgage balance reduction won't see a dime.

What are the states doing with their share? Why should they get more than teh peeople? and... why should someone who took a cash out refinance of $100,000 get anythng? they already got $100,00... There are people who were actually harmed that should have been help but how do you tell the real people from those who dont deserve it? Too much government bs for me.

I really have to agree with Scott #7, those owners that used the their home as the proverbial ATM seem to be getting the best of the deal. 

There has to be a better solution than this, but don't hold your breath waiting for NAR to help to find it.

we need more to help housing recovery than just this $2,000 I have spent most of the day trying to understand how this is going to help

Some attorneys . .somewhere. .have a great celebration party  this weekend.. .

Don'f forget it is an election year. Expect more expensive, yet worthless legislation before November.

I still have yet to hear more than a handful of stories of folks who were still paying their mortgages or had homes that were paid off.   The two thousand dollars may initially seem like an insult, but it's akin to cash for keys, which is where most of these deals would have ended up eventually, just through a non-robo-signing route.

Bryan: My sentiments exactly! Thanks for the post!

Hi Bryan.  I don't believe that the banks "literally stole property from hundreds of thousands of people".

Not even close.  Robo signing was a quick way to handle the mass of paperwork.  Not property theft...

We are not protecting the banks.  We are protecting the taxpayers who back the banks.

Thanks for writing,

Ken

Hi Bryan, I read this yesterday.  Congrats on the feature.  The Suggest button works!

In what ever form this finally hits the market, little will be available to the thousands of families uprooted by the collapse of the housing market.  Unfortunately in spite of apparently good intentions not much good will come out of this I'm afraid. 

In the states like California and Arizona where home prices in some areas dropped 75% and hundreds of home were foreclosed upon, where is the help for those families.  $2,000 just won't make much of a difference to those who have lost so much.

Bryan: There's a question for you - why isn't NAR all over this protecting the consumer? The homeowners! Don't we protect America's homeowners? Because the bankers are the stronger lobby. Wouldn't want the consumer friendly (not!) banking industry at odds with the realtors.

There are still many states that did NOT join this suit because they thought it was a sham. I applaud all those AG's that thought it just wasn't right.

The people who did lose their houses "shafted (royally)" now have poor credit and won't be buying for a long time. People who bought investment properties who had to decide to lose them lessened their credit from shortselling or foreclosure.  This still sound like it is favoring the lucky ones and screwing the not-so-lucky folks.

Byran

There seems to be no end to this mess. California just agreed to settlement based upon the possibility of suing the banks in federal courts and not state courts for additional liability. We all know how many lawsuits will be filed and won, probably near none.

I try to stay positive but the void in leadership and integrity in many in power sure makes it hard to do so.

Really good analysis.  Thanks for posting.  Got to re-blog for my clients!

I might take some flak, but I dont think 'homeowners having their propertys stolen' is quite accurate-  the large majority of these people signed an agreement that said 'if I pay, I stay, if I dont, I wont'-  I dont think the banks screwing up the paperwork is really a reason for people who aren't paying their mortgage to avoid foreclosure.

Should the banks be punished for their shortcuts and disregard for the rules...absolutely.  But bottom line is everyone knows when they buy a home, if they dont pay, they'll lose the home. 

Sounds like a great way for NAR to continue to stick their nose into things other than maintaining and promoting the professional image of their members. 

I would appreciate if you would document your statement that banks "literally stole property from hundreds of thousands of people."  Yes, I doubt that you can do that. 

You wrote: In case you hadn't heard, the banking industry and the Federal government settled the "robo-signing" fiasco

It wasn't the Federal Government, but the States' Attorney Generals that settled.  Anyway, yup the $1,500 - $2,000 is an insult and this is the price per person for fraud?!?  Slap on the wrist.  I don't know why people continue to bank with BofA, Chase, Citi, Ally, et al.  People feed the beasts.  I don't see how existing homeowners are winners (even sort of).  Most have lost a lot of equity.  

Didn't realize NAR has a dog in this fight.  NAR is a membership organization of Realtor(s) NOT mortgage brokers and/or bankers.  Since when did Realtor(s) "protect" the home owner when it comes to their loans??  And aside from mixing apples and oranges, loans and the aftermath of this mess is well outside my license.  This is a loan robo-signing fraudulent crime based on foreclosures . . . again I, and fellow NAR members had nothing to do with it and our licenses don't cover "protecting" home owners from what happened.   While we can, and should, voice our disdain, I don't get how NAR and NAR members are somehow slackers now for not doing more and protecting the consumers?

Just one more attempt to do "something" to help the homeowners who were screwed. I see another fail here with this one.

Bryan,

This is terrible.

We didn't have this sort of meltdown in Canada. The result is that our local Torontro market has consistently been hot.

Brian

Carla - I was under the impression the fed coordinated the settlement with the states.  Either way, it still seems wrong.  My point on NAR is that I think we're the "voice of the customer" in a fight light this.  We're always looking out for homeowners rights and this seems to me to be a situation where that applies.

Mike - My point on NAR is to fight for homeowner rights, which they do all the time.  The issue of "stealing" property by the banks is well noted in the media and the basis for the whole settlement.  The banks, via robo-signing, improperly foreclosed on people who should not have been foreclosed on.  That's why the settlement came about.

John - You're right, the people who don't pay should not be allowed to retain their homes.  The scandal came from banks forclosing on those who were paying or partially paying, working with their bank, and then suddenly foreclosed on.

RE:  COMMENTS REGARDING BANKS - Yes, robo-signing seemed necessary when the volume of foreclosures was increasing.  However, just as with trading curbs in the stock market, something should have been in place to halt the foreclosures so they could actually be reviewed.  As it was, nothing was done and we have the current situation.

RE:  NAR - Yes, NAR is a trade association for REALTORS but it also likes to position itself and it's members as advocates for homeowners.  That said, lobbying in Washington is routinely done to the benefit of consumers.  When all this came down, I feel that NAR should have done a better job stepping up "for the little guy".

Great comments so far and I appreciate that we're hearing several sides of the issue.

I leave such big thoughts to my association, the NAR. They take care of everything - LOL. All I do is pay my dues (I was actually deleted from the LinkedIn account). Is something wrong? 

Hi Bryan... Like the post, and the strong message. Hope that NAR takes action as well.

Does anybody here know of even one single person who was making their payments and lost their house?

Bryan..I read too that you can still sue after you get your 2k which is supposed to be an added value. The whole thing mirrors Jessie James (this is a holdup) tactics. We were held up and robbed at gun house point in broad daylight. That takes power in high places...Michael Milken the junk bond king coolly and with precision illegally made 1 billion dollars and settled with THE LAW for 500 million. The math says well done. He has a plaque up at the L.A. Zoo listing him as a major supporter too..crime pays..it really pays...and it goes on

I agree with several of the comments here. The processing of foreclosures may have been flawed but if you are not paying your mortgage you lose your house.

Bryan - The whole housing mess is just a fiasco. It seems the ones to win to me are the banks because they're always too big to fail.  How does that make any sense anyway?

This is a good bottom line summary to explain the events in easy to understand format.

It is to say the least an 'interesting' settlement.  So many things, so wrong, from so many sides.

And the American people (tax payers) bailed these banks out why??? It's an election year band aid to make the Dems look good.