75% of modified home loans will redefault even in Kansas City - The First Step in Negotiating a Short Sale in Kansas City
Most Kansas City borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months, according to a report released Wednesday. Between 65% and 75% of loans that are modified through the Home Affordable Modification Program(HAMP) but not backed by the federal government are likely to go bad, according to the report released by Fitch Ratings, a N.Y.-based credit-rating agency. The main reason these borrowers continue to struggle is that HAMP does nothing to solve the rest of the borrowers debt problems, the report added. "Many of these borrowers still have very heavy levels of other debt," said Diane Pendley, a Fitch managing director, "auto loans, credit cards and other expenses.
The HAMP modifications reduce housing expenses down to 31% of income but do not touch these other obligations." Currently, according to the Fitch report, about half of prime borrowers who lose their homes now do so through foreclosure. The other 50% go through short sales, in which they sell their homes for less than what they owe the bank, or deed-in-lieu, a transaction where the bank takes back the property directly and forgives the outstanding balance. The servicers have been encouraged to rev up their short sale engines by the Treasury Department, which runs HAMP and its sister program, Home Affordable Foreclosure Alternatives (HAFA), which provides cash incentives to the parties who agree to short sales in Kansas City. Now, when borrowers re-default on HAMP mods or other bank workouts, banks are much more likely to offer help to execute a short sale or deed-in-lieu.
Let us know what you think or add to our blog by writing a comment.
Most Kansas City borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months, according to a report released Wednesday. Between 65% and 75% of loans that are modified through the Home Affordable Modification Program(HAMP) but not backed by the federal government are likely to go bad, according to the report released by Fitch Ratings, a N.Y.-based credit-rating agency. The main reason these borrowers continue to struggle is that HAMP does nothing to solve the rest of the borrowers debt problems, the report added. "Many of these borrowers still have very heavy levels of other debt," said Diane Pendley, a Fitch managing director, "auto loans, credit cards and other expenses.
The HAMP modifications reduce housing expenses down to 31% of income but do not touch these other obligations." Currently, according to the Fitch report, about half of prime borrowers who lose their homes now do so through foreclosure. The other 50% go through short sales, in which they sell their homes for less than what they owe the bank, or deed-in-lieu, a transaction where the bank takes back the property directly and forgives the outstanding balance. The servicers have been encouraged to rev up their short sale engines by the Treasury Department, which runs HAMP and its sister program, Home Affordable Foreclosure Alternatives (HAFA), which provides cash incentives to the parties who agree to short sales in Kansas City. Now, when borrowers re-default on HAMP mods or other bank workouts, banks are much more likely to offer help to execute a short sale or deed-in-lieu.
The first step in negotiating a short sale in Kansas City is contact an experienced short sale negotiator who has successful negotiated a short sale with your lender. Most lenders will not deal with a homeowner directly on a short sale because they want a "Arms Length Transaction." The lender wants to make sure that the offer presented is a good offer. The lender is taking a loss so they want to make sure your Kansas City home is being marketed to the largest pool of buyers. Next, there is mounds of paperwork to complete and quite a few steps to complete, a lender wants to make sure that no paperwork is incomplete or step neglected.
If you would like assistance with a seasoned Kansas City short sale negotiator, feel free to contact the Dowell Taggart Team. Did you know that the Dowell Taggart Team have been skilled loss prevention specialist and short sale negotiators for over 7 years. We have completed many successful short sales and redemption sales.
Let us know what you think or add to our blog by writing a comment.
Blog post written by the Dowell Taggart Team of RE/MAX Best Associates
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