Now Is The Time To Renegotiate With Banks
January 12th, 2009 categories: Folsom Lake, Real Estate, Short Sales
Threat of judges interference encourage mortgage workouts
According to a news report from CNN Jan. 9,2009, Citibank has signed on with legislation to negotiate mortgage modifications with folks who have filed bankruptcy. It also says that the National Assoc. of Realtors is leaning towards supporting this piece of legislation which appears to be a complete 180 from previous statements. Allowing judges to renegotiate loans and reduce interest rates is some scary stuff.
My concern is the long term impact this type of “tinkering” with mortgages will have on the real estate industry as a whole. Referred to as a “cram-down” by the banking industry, this is something seldom used but according to this article (and my own experience) “the banks have been dragging their feet” in terms of negotiating with homeowners. It appears this offers the push back needed to get them to move the paper and get on the phone to the homeowners (and hopefully answer the phone calls from the Realtors!)
The real estate profession has long been used as a metaphor for unethical behavior but the lenders got caught in this past market and their true colors were displayed for all to see. I understand that mortgage brokers have to make a living and most are honest people who work for their clients best interests but we all know a story or two about the fast Eddie’s who got in and made a quick buck. Unfortunately it’s not those same people who have to take it in the shorts but at least this offers a solution to Joe the plumber to salvage his situation and get his loan reduced to keep his home. If the courts do indeed get the power to start reducing mortgages and alter the interest rates I think the industry as a whole will start to police it’s actions more closely and hopefully everyone will benefit.
Beth,
Can you write something about the credit situation?
How about how to improve your credit score?
Very nice information. Thanks for this.
I really liked your blog!
What Attourney would you recomend to help with a loan mod in Lodi ,CA ?