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Government: Our Way or Pay $20 Billion
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You're Now Reading:
Government: Our Way or Pay $20 Billion
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
You're Now Reading:
Government: Our Way or Pay $20 Billion
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February 24, 2011 (Chris Moore)
mortgage-loanmod-image
In what some might misconstrue as blackmail, the Wall Street Journal is reporting that the Obama Administration is trying to push through a settlement over mortgage-servicing breakdowns that would force America’s largest banks to pay for principal writedowns in mortgage loans or face penalties of over $20 billion.

According to people familiar with the matter, the administration is seeking a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth. If a settlement can be reached to the liking of all the state and federal agencies that have been pursuing and considering legal action against the mortgage servicers, the banks would have to pay more than $20 billion in fines or fund a comparable amount of loan modifications for distressed borrowers.

So far most loan modifications have focused on shrinking monthly payments by either lowering interest rates or extending loan terms or both. Forcing the banks to lower principal amounts could result in even more chaos as borrowers who previously have been able to afford there homes could possibly stop paying their mortgages in the hope of being rewarded with a smaller loans.

And as far as we are concerned, it’s morally unfair to the many more homeowners who didn’t allow themselves to get in this position in the first place.

The deal doesn’t create any new government programs to implement the principal writedowns but instead relies on the banking industry to devise their own modifications or use the existing government programs like HAMP to meet the government’s requirements.

So far the deal is considered fluid as any agreement would have to be approved by a litany of government agencies, the state attoneys general, bank regulators, and the banks themselves.

“Nothing has been finalized among the states, and it’s our understanding that the federal agencies we are in discussions with have not finalized their positions,” said a spokesman for Iowa Attorney General Tom Miller, who is spearheading a 50-state investigation of mortgage-servicing practices.

Under the administration’s proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses by writing down loans that they service on behalf of clients.

Bank executives point out that principal cuts don’t necessarily improve payment patterns and have told parties involved in the talks that reductions could raise new complications. Banks have been overwhelmed by the amount of foreclosures which lead to the so-called “robo-signing” controversy as they tried to process as many foreclosures as quickly as they could to rid themselves of their toxic housing inventories.

And even though the banks have come under increasing criticism for their handling of the foreclosure crisis, let’s not forget that twice as many private loan modifications have taken place through the banks than those through government programs like HAMP. Banks concerns that principal cuts don’t necessarily equate into improved payment performance can be easily justified as nearly 20 percent of all loan modifications have defaulted within the first year of the modification’s completion with some studies suggesting that as many as 60 to 70 percent of all loan modifications will eventually default again. Will lowering a borrower’s principal really change those patterns?

However, if a single settlement can’t be reached, banks could face the prospect of separate civil actions from state attorneys general along with different federal agencies which could seek smaller penalties through regular enforcement channels.

Tags: Obama administration, loan modifications, mortgage servicers, principal writedowns, mortgage loans, foreclosure procedures

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Congratulations! With the great learning tools we provide for you at MortgageLoanRateUpdate and the offers you have received, you've found the right product and the best rate.
HOW
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Whether you're looking to refinance your current loan, purchasing a new home or looking for a home equity loan, we make it easy at Mortgageloanrateupdate. Our questionnaire is simple and quick to use and your information is safely transmitted to us with SSL encryption. With just two minutes of your time, you could have multiple lenders competing for your business which could save you thousands.
ADVANTAGES OF USING
MORTGAGELOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
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Tips
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Tips
About
Mortgages
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Calculator
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Rates

February 24, 2011 (Chris Moore)
mortgage-loanmod-image
In what some might misconstrue as blackmail, the Wall Street Journal is reporting that the Obama Administration is trying to push through a settlement over mortgage-servicing breakdowns that would force America’s largest banks to pay for principal writedowns in mortgage loans or face penalties of over $20 billion.

According to people familiar with the matter, the administration is seeking a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth. If a settlement can be reached to the liking of all the state and federal agencies that have been pursuing and considering legal action against the mortgage servicers, the banks would have to pay more than $20 billion in fines or fund a comparable amount of loan modifications for distressed borrowers.

So far most loan modifications have focused on shrinking monthly payments by either lowering interest rates or extending loan terms or both. Forcing the banks to lower principal amounts could result in even more chaos as borrowers who previously have been able to afford there homes could possibly stop paying their mortgages in the hope of being rewarded with a smaller loans.

And as far as we are concerned, it’s morally unfair to the many more homeowners who didn’t allow themselves to get in this position in the first place.

The deal doesn’t create any new government programs to implement the principal writedowns but instead relies on the banking industry to devise their own modifications or use the existing government programs like HAMP to meet the government’s requirements.

So far the deal is considered fluid as any agreement would have to be approved by a litany of government agencies, the state attoneys general, bank regulators, and the banks themselves.

“Nothing has been finalized among the states, and it’s our understanding that the federal agencies we are in discussions with have not finalized their positions,” said a spokesman for Iowa Attorney General Tom Miller, who is spearheading a 50-state investigation of mortgage-servicing practices.

Under the administration’s proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses by writing down loans that they service on behalf of clients.

Bank executives point out that principal cuts don’t necessarily improve payment patterns and have told parties involved in the talks that reductions could raise new complications. Banks have been overwhelmed by the amount of foreclosures which lead to the so-called “robo-signing” controversy as they tried to process as many foreclosures as quickly as they could to rid themselves of their toxic housing inventories.

And even though the banks have come under increasing criticism for their handling of the foreclosure crisis, let’s not forget that twice as many private loan modifications have taken place through the banks than those through government programs like HAMP. Banks concerns that principal cuts don’t necessarily equate into improved payment performance can be easily justified as nearly 20 percent of all loan modifications have defaulted within the first year of the modification’s completion with some studies suggesting that as many as 60 to 70 percent of all loan modifications will eventually default again. Will lowering a borrower’s principal really change those patterns?

However, if a single settlement can’t be reached, banks could face the prospect of separate civil actions from state attorneys general along with different federal agencies which could seek smaller penalties through regular enforcement channels.

Tags: Obama administration, loan modifications, mortgage servicers, principal writedowns, mortgage loans, foreclosure procedures

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
HOW
MORTGAGELOANRATEUPDATE
WORKS
Whether you're looking to refinance your current loan, purchasing a new home or looking for a home equity loan, we make it easy at MortgageLoanRateUpdate. Our questionnaire is simple and quick to use and your information is safely transmitted to us with SSL encryption. With just two minutes of your time, you could have multiple lenders competing for your business which could save you thousands.
ADVANTAGES OF USING
MORTGAGELOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.

February 24, 2011 (Chris Moore)
mortgage-loanmod-image
In what some might misconstrue as blackmail, the Wall Street Journal is reporting that the Obama Administration is trying to push through a settlement over mortgage-servicing breakdowns that would force America’s largest banks to pay for principal writedowns in mortgage loans or face penalties of over $20 billion.

According to people familiar with the matter, the administration is seeking a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth. If a settlement can be reached to the liking of all the state and federal agencies that have been pursuing and considering legal action against the mortgage servicers, the banks would have to pay more than $20 billion in fines or fund a comparable amount of loan modifications for distressed borrowers.

So far most loan modifications have focused on shrinking monthly payments by either lowering interest rates or extending loan terms or both. Forcing the banks to lower principal amounts could result in even more chaos as borrowers who previously have been able to afford there homes could possibly stop paying their mortgages in the hope of being rewarded with a smaller loans.

And as far as we are concerned, it’s morally unfair to the many more homeowners who didn’t allow themselves to get in this position in the first place.

The deal doesn’t create any new government programs to implement the principal writedowns but instead relies on the banking industry to devise their own modifications or use the existing government programs like HAMP to meet the government’s requirements.

So far the deal is considered fluid as any agreement would have to be approved by a litany of government agencies, the state attoneys general, bank regulators, and the banks themselves.

“Nothing has been finalized among the states, and it’s our understanding that the federal agencies we are in discussions with have not finalized their positions,” said a spokesman for Iowa Attorney General Tom Miller, who is spearheading a 50-state investigation of mortgage-servicing practices.

Under the administration’s proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses by writing down loans that they service on behalf of clients.

Bank executives point out that principal cuts don’t necessarily improve payment patterns and have told parties involved in the talks that reductions could raise new complications. Banks have been overwhelmed by the amount of foreclosures which lead to the so-called “robo-signing” controversy as they tried to process as many foreclosures as quickly as they could to rid themselves of their toxic housing inventories.

And even though the banks have come under increasing criticism for their handling of the foreclosure crisis, let’s not forget that twice as many private loan modifications have taken place through the banks than those through government programs like HAMP. Banks concerns that principal cuts don’t necessarily equate into improved payment performance can be easily justified as nearly 20 percent of all loan modifications have defaulted within the first year of the modification’s completion with some studies suggesting that as many as 60 to 70 percent of all loan modifications will eventually default again. Will lowering a borrower’s principal really change those patterns?

However, if a single settlement can’t be reached, banks could face the prospect of separate civil actions from state attorneys general along with different federal agencies which could seek smaller penalties through regular enforcement channels.

Tags: Obama administration, loan modifications, mortgage servicers, principal writedowns, mortgage loans, foreclosure procedures

Home Buying Tips
Home Selling Tips
About
Mortgages
HOW
MORTGAGELOANRATEUPDATE
WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at MortgageLoanRateUpdate and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
MORTGAGELOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.