Bountiful UTAH - I have heard the following myth from a lot of people. Here is what they are telling me:
“The banks can’t afford to approve loan modifications because they don’t want to take the losses on their books that fast. Also, their investors may not approve the short sale, because they can’t afford to write off too much loss at once. And the circle goes around and around”, they say. This common myth simply is NOT true. Here is why.
The odds are that your loan is not owned by your lender. For example, 80% of all Bank of America’s (Countrywide, etc) loans are not owned by BofA. The biggest holders are the Government Sponsored Enterprises (aka called GSE's.) The GSE's are Fannie Mae, Freddie Mac, and Ginnie Mae.
These companies have become accustomed to huge losses. In fact, they have loan loss reserves on their books. The other entities that is accustomed to losses are The FHA and The VA. Between 65-70% of all US mortgages are owned or insure by the GSEs, FHA, or VA.
Even the smaller local banks and credit unions do not own a large percentage of the loans they hold in their portfolio. For example, another agent I know lives in a rather small town of approximately 25,000 people. In this town, there is a single bank that dominates the home lending market. The smart money would bet that this small bank was lending their own money. Not so. The majority of their home loans are sold off in the secondary market within 6-12 months after the loans are issued. In my opinion, this is the real reason that loan modifications and short sale are can be so tough to gain approval on. Investor approval is where the delay is (Please remember: loan modifications and short sales will in most cases net the owner of the loan more money than a foreclosure.)
The companies that process the loan modifications and short sales won’t lose any money if the home is foreclosed. Here is a classic example of this. Let's say an agent is negotiating an FHA short sale with Bank of America. The short sale negotiator told the agent that it would take her 2-3 weeks to review the offer and then submit it to FHA for final approval. How long was it going to take FHA to review the submitted file and respond? The negotiator told the agent that that FHA had a 72 hour turnaround from when she submits the file to them. In the mean time, a buyer may have found an alternative home and walked away from the deal. It’s pathetic. In this example, BofA isn’t losing the money, FHA is losing it instead. Yes, the system is not working, but no one in Washington or at the big banks really seems to care.
“The banks can’t afford to approve loan modifications because they don’t want to take the losses on their books that fast. Also, their investors may not approve the short sale, because they can’t afford to write off too much loss at once. And the circle goes around and around”, they say. This common myth simply is NOT true. Here is why.
The odds are that your loan is not owned by your lender. For example, 80% of all Bank of America’s (Countrywide, etc) loans are not owned by BofA. The biggest holders are the Government Sponsored Enterprises (aka called GSE's.) The GSE's are Fannie Mae, Freddie Mac, and Ginnie Mae.
These companies have become accustomed to huge losses. In fact, they have loan loss reserves on their books. The other entities that is accustomed to losses are The FHA and The VA. Between 65-70% of all US mortgages are owned or insure by the GSEs, FHA, or VA.
Even the smaller local banks and credit unions do not own a large percentage of the loans they hold in their portfolio. For example, another agent I know lives in a rather small town of approximately 25,000 people. In this town, there is a single bank that dominates the home lending market. The smart money would bet that this small bank was lending their own money. Not so. The majority of their home loans are sold off in the secondary market within 6-12 months after the loans are issued. In my opinion, this is the real reason that loan modifications and short sale are can be so tough to gain approval on. Investor approval is where the delay is (Please remember: loan modifications and short sales will in most cases net the owner of the loan more money than a foreclosure.)
The companies that process the loan modifications and short sales won’t lose any money if the home is foreclosed. Here is a classic example of this. Let's say an agent is negotiating an FHA short sale with Bank of America. The short sale negotiator told the agent that it would take her 2-3 weeks to review the offer and then submit it to FHA for final approval. How long was it going to take FHA to review the submitted file and respond? The negotiator told the agent that that FHA had a 72 hour turnaround from when she submits the file to them. In the mean time, a buyer may have found an alternative home and walked away from the deal. It’s pathetic. In this example, BofA isn’t losing the money, FHA is losing it instead. Yes, the system is not working, but no one in Washington or at the big banks really seems to care.
Thinking about a short sale? I can help you short sale your property and never pay the bank another dime. Send me an e-mail at utahhomesaver@gmail.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call Dave at 801-651-0707.
Thinking about a loan modification? Our Utah Home Saver Loan Modification Kit has the instructions you will need to get a loan modification approved with your bank. This is a FREE for you, all you have to do is call or email us today.
Thank you for taking a few minutes of your busy day to read this, Dave Forsberg.
Dave is a Realtor with Prudential Utah Real Estate - Bountiful.
Phone: 801.651.0707 Email: utahhomesaver@gmail.com
Dave Forsberg and The Utah Home Saver Team specialize in helping Davis County, Utah Homeowners short sale and never pay the bank another dime. Bountiful Loan Modification Help, Bountiful Short Sales. Bountiful Short Sale Realtor. Bountiful Realtors. Bountiful Realty. Bountiful Realtor. North Salt Lake Short Sales. Woods Cross Short Sale Realtor. Centerville Short Sales. Farmington Short Sale Realtor. Fruit Heights Short Sales. Kaysville Short Sales Realtor. Layton Short Sales. Layton Short Sales Realtors. Syracuse Short Sales. Clearfield Short Sales Realtor. Davis County Utah Realtor. Stop Foreclosure. Stop Utah Foreclosure. Avoid Foreclosure. Avoid Utah Foreclosure. Foreclosure Alternatives. Utah Foreclosure Alternatives. Bountiful Homes for Sale. Bountiful Houses for Sale.
