US HomeSavers Loss Mitigation Blog

Fannie Mae implements deed-for-lease program that allows troubled borrowers who don’t qualify for loan modifications to stay in their homes.

Giving troubled borrowers yet another way to avoid foreclosure, Fannie Mae said on Thursday it would allow eligible homeowners to rent their own homes.

The Deed for Lease program lets homeowners transfer the deed back to their lender and then sign a lease to remain in the home. The effort is aimed at borrowers with mortgages owned or guaranteed by Fannie Mae who do not qualify for or cannot sustain a loan modification. Borrowers must live in the home as their primary residence and must be released from any subordinate liens.

The program aims to reduce the number of foreclosed properties being abandoned because they often fall into disrepair and hurt the surrounding homes’ values. Also, it keeps a roof over troubled borrowers’ heads and a steady stream of income coming from the property. Tenants of homeowners may also be eligible for leases.

“This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities,” said Jay Ryan, vice president of Fannie Mae, a mortgage-guarantee firm under federal government control.

Homeowners must show they can afford market rent, but that payment cannot be more than 31% of the borrower’s pre-tax income. Leases may be up to 12 months, with the possibility of renewal or month-to-month extensions. If the property is sold, the new owner picks up the lease.

“It really buys them time,” said Paul Habibi, real estate professor at UCLA’s Anderson School of Management.

Stopping foreclosures

But in the long-run the program only delays the inevitable sale of the distressed properties.

While this initiative is not part of the Obama administration’s loan modification program, the White House is leaning heavily on Fannie Mae and its sister firm, Freddie Mac, to assist in stemming the foreclosure crisis.

Freddie Mac launched a program in January that allowed borrowers to stay in their homes on a month-to-month basis after they go through foreclosure.

Despite the government and financial industry initiatives, foreclosures hit an all-time high in the third quarter. During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, according to RealtyTrac.

Last month, Treasury officials announced that 500,000 troubled borrowers have been put into trial modifications under the president’s plan. The program calls for eligible homeowners to pay no more than 31% of their pre-tax income toward their mortgages.

At the same time as it tries to ramp up its loan modification program, the administration is looking for ways to help those not eligible for adjustments. In May, officials unveiled a program to incent borrowers and loan servicers to participate in short sales and deeds in lieu. Under that initiative, borrowers get up to $1,500 to assist with relocation expenses and Treasury pays servicers $1,000 when the deal is completed.

Short sales, in which the home is sold for less than the mortgage balance and loan servicers may forgive the difference, and deeds in lieu, in which borrowers voluntarily forfeit the deed and the debt may be erased, are faster and cheaper than foreclosure

I am so fed up with the bloody nay sayers out there.

Shared by Neil Martin
Tuesday, June 30, 2009 at 5:58pm

I am so fed up with the bloody nay sayers out there. I am so bloody fed up with those who wish to turn the loan Restructuring/Loan Modification business over to the banks and or the attorneys. Who the heck got us into this reprehensible situation in the first place.

Well we are giving it back to them if we don’t watch out.

The banks will do EVERYTHING in their power to retain their money (they have a profit to maintain and shareholders to pay). You think they care about you? Even if you are a shareholder…. If you said yes then you are living any where else but here on earth. No, the banks are out for only one thing and that is to preserve their Bottom line, their Profits, their Salaries. And how will they do that, by making sure you accept an loan on their terms so they can make the best of a bad deal that they underwrote to start with. Martin Andelman wrote a splendid article that I advise everyone to read and digest. http://mandelman.ml-implode.com/2009/06/former-sub-prime-lenders-are-back-to-profit-off-the-mess-they-made-seriously/ In this he really makes you understand just a little of what the Banks are all about.

Ask yourself this one question. When you are on hold with your bank do they say “This is an attempt to collect a debt” or do the say “This is an attempt to modify your loan”. If they truly had your best intentions in mind they would, (and if they say the latter then go for it), unfortunately I have never heard them say it and most likely will have to wait a very long time before I do (hell will freeze over first in my opinion) but please call me if you do.

Attorneys,,,,will tell you that only they can help you. B.S. With bells on. Only a few states require an attorney intervention and then in particular circumstances such as foreclosure, (then they are worth it) otherwise the borrower is paying through the nose and are Most definitely the Most expensive. Most of them are breaking the very law they tell you, that they and only they can do. By outsourcing the business end to me they are not representing you, we are since we do the negotiating. I know, first hand.They pay me to do their work. And I can prove this. But I won’t because it would hurt my business and my income (unless someone is willing to pay me more, any callers ?????).

Crooks. And I mean crooks. Those that would take your house, your dreams, your hopes. This is huge, independent group and are actively out to scam you. One particularly nasty scheme is to take your money and do nothing until your foreclosure date is upon you then advise you that the best possible solution is to do a short sale, oh and by the way they will offer you 70 cents on the dollar. Beware of all of the scams out there. The brokers and attorneys I know are good people and I am very happy to be working with them but there are always those who will take advantage of you.

If they say it is free, guess what….. they lie. Beware no one works for free, for nothing, not the banks, not the attorneys, not even the government. We, the tax payer are paying them. Who pays those that don’t work for the government??? if not you, then who? Are the banks working for free?? don’t make me laugh. Will you work for free? If so I have a job for you. Please call 555.5555 Oh and please give me your SS number, date of birth and bank account details aswell. Thank you so much, I’ll be in touch.

The answer to all of this is not a simple nor a one line answer, it is complex, the business is complex. And my friends is that. Every loan, every person, every home, each is and by definition has to be, wait for it. Different. It can not be any other way. Every persons situation is unique, every person needs to be represented, to feel that they are empowered to look to their own well being. This can only be accomplished by allowing the free market to truly work as the free market should. The market itself will regulate itself. Satisfy the clients needs and accomplish the goal and reap a small but worthy fee. No reward. No Market. No loan. No Home

Ladies and Gentlemen of this industry. I implore you to be responsible. Home owners I implore you to be realistic and understand that the bank is not your friend. Like you, they are after their and only their best interests.

Thank you for reading this.

PS I just bought more stock in Bank of America. Great price and it will go up.

Hello all,You are receiving this e-mail because you didn’t make my sh*tl*st and I want to share some information with you should you still have an interest in the third party loss mitigation business.

The government’s meddling in sub prime mortgage issues makes legitimate, third party loss mitigation services more vital than ever in terms of our role as consumer advocates. Distressed homeowners have to watch out for loan modification/loss mitigation scammers, the worst of whom may be their own lenders or servicers. It’s sad but true. Roughly half of the loan modifications I look at are those from homeowners who attempted to negotiate their own loan mods that are full of errors and omissions OR they are not really loan mods at all. It’s a scandal that no one is really aware of UNLESS you are an industry inside. 

As you have all experienced, taking good loss mitigation applications and getting paid in a timely manner can be challenging, to say the least. Our new system makes loss mitigation a lot easier and more profitable as we have automated the pre-qualification process and we now have experienced, major bank trained loss mitigation specialists on board that essentially allows us to work out of the lenders’ and servicers’ own playbook. 

Although the last year or so has been challenging to say the least, US HomeSavers keeps plugging along. We’ve made some changes in staffing and technology over the last couple of months that vastly simplifies the application/approval process which, as you all know, I hold to be of paramount importance in our efforts to bring reality and results into the loss mitigation business. We have instituted an US HomeSavers Loss Mitigation Reseller Program whereby you can offer homeowners fixed price loan modification services at super competitive rates that can be fully guaranteed, partially guaranteed or not guaranteed as part of the loan modification pre-qualification process. There are no upfront costs for you to become a Reseller. 

You will be supplied with a Bank Qualification datasheet which is primarily an Excel Spreadsheet modeled after the industry standard software used by the big banks to determine homeowner eligibility for home retention programs. All you have to do is get your customer to complete the pre-qual app or you do it for them. (preferred). E-mail it to me for a QC Check and our processing department will either approve the pre-qual or deny it in 24 hours. If we decline the application, you realtors should be sharp enough to get the pre-foreclosure sale listing which will most likely be a short sale. Short sales will be processed under the new CDPE standard for which you will receive instructions and the forms needed.

If the application is approved, your job is to collect the required documentation and the service fee “deposit” from your customer. Once the formal application is submitted and accepted by the processing department. Let me close for now with two important items of note. 1) I got 14 out of 16 loan mods approved last Friday representing just under $21,000 in gross revenue and 2) if you have any interest taking advantage of this free opportunity, you need to join my Loss Mitigation Reality Group at http://finance.groups.yahoo.com/group/Loss-Mitigation-Reality then complete the attached Reseller Application documents attached to this e-mail. Dutch, you are exempt but call me so I can get you entered into the system.  

Thanks,

Curt