Long Beach California Real Estate Loans

Long Beach, Ca.   A friend of mine recently attempted to do a loan modification with Washington Mutual because of a pending divorce and hardship.  Because he was not late in mortgage payments, he was refused by the bank.  This seems to be a common trend with banks these days; for whatever reason, either they are overwhelmed with modifications, foreclosures and short sales or they are are just understaffed, they are refusing to make offers with borrowers who are not behind in payments. 

The question for a homeowners in this situation is whether or not to pay their mortgage in order to position themselves to just get to the negotiation table?   I will say this for sure, that if you do not pay your mortgage, it will affect you credit scores, negatively.  Remember, that even though you may have a legitimate hardship, that it is often the bank's position that they will offer terms to you only at their pleasure.  One mistake that homeowners make is that they accept the first offer that banks make to them.  Nationwide, almost 50% of all loan modifications are turning back into foreclosures because homeowners are not properly negotiating affordable terms with their bank. 

President Obama signaled at last night's press conference that he would be open to expanding the $700B stimulus plan.  CNBC is carrying the speech live by the Secretary of Treasury Bank bail out plan and as he is speaking I am watching the equity market drop 200 points which is not encouraging.  The new plan will most likely include more capital for banks, financing for as much as $1T of consumer spending and business loans, and public funding for investors willing to buy certain distressed assets. There is a $32B 3yr note auction today. Right now, the futures market is pricing in a 68% chance that the Fed keeps rates somewhere between 0 and .25% until at least June 24th, 2009. Currently, the Ten Year yield is at 2.94% (3.01% yesterday)

Fortunately we are seeing some buying in the fixed-income markets, and rates have crept back down. Yesterday, in a speech, FHFA Director Lockhart said Fannie/Freddie may need more than the $200 billion already pledged by the US Government if the housing market continues to deteriorate. Once again there is no scheduled economic news, but rates have dropped and 30 year fixed mortgage prices are better by .250 or more.

Now we turn our attention to ensure you are using the proper language and new name when referring to the TARP program.  The Obama administration plans to revamp the Troubled Assets Relief Program under its new name, the Financial Stability Plan, Treasury Secretary Timothy Geithner will announce criteria for stress tests that banks must undergo before receiving federal funds to ensure they have the ability to lend. Among other requirements, banks will be forced to disclose how the money is spent and how many assets are purchased, show that the money is funding new loans, limit executive compensation, wait until the funds are repaid before buying healthy banks and adopt programs to curtail foreclosures.   What is in a name, everything

Kirk Mulhearn, a Long Beach Real Estate Broker, and Professional Mortgage Planner, can be reached at 562-989-4091 ext. 110  Subscribe to the blog at:  www.longbeachrealestateandloans.com