Mortgage Mitigation News

Update: March 4, 2009

Effective today, the foreclosure prevention program is in operation. We just publish some additional information on the new Government Foreclosure Prevention Program Two Things You Need to Know.

Update: February 19, 2009

President Obama released a broad overview of his Homeowner Affordability and Stability Plan today. We think it's a bunch of smoke to boost the funding for Fannie Mae and Freddie Mac. Read more at Homeowner Affordability and Stability Plan - A lot of Smoke.

Update: January 22, 2008

Citigroup, owners of Citibank have dropped their opposition to "mortgage cramdowns" or bankruptcy judges and trustees negotiating with banks to reduce home owner mortgages and/or payments and interest rates. This change seems to "allow" legislators to approve news laws that will make it happen. I'm a bit confused as to why Senators and Congressional Representatives need the approval of those being regulated before making laws. Read more at: Bankruptcy Judges May Soon Negotiate Mortgage Terms.

Update: January 18, 2008

I just finished a blog post on Bank of America announcing that it will modify up to 630,000 loans in an attempt to keep distressed property owners in their homes.  This could be very good news for Daytona Beach real estate owners who have mortgages with Bank of America or Countrywide, its subsidiary.

Now, the question is will this be only major player to pursue mortgage modification aggressively? Bank of America just took another $20 billion in bailout funds and part of the agreement was mortgage modification, but that was announced Thursday and they announced the new program on Friday. That's amazingly quick for a bank, so it was probably in the works anyway. I wonder how many other major mortgage lenders have similar plans.

Update: January 16, 2009

Mortgage mitigation is when mortgage lenders negotiate with home owners in an attempt to keep people in their homes.  It is often call mortgage modification. Thus far as real estate prices have plummeted and foreclosures have skyrocketed, lenders have been reluctant or unable to make mitigation a large-scale reality.

We believe that mortgage mitigation is a key to the recover of the Daytona Beach real estate market and necessary to stop falling prices.  Many people agree with us, but many disagree because they believe that "irresponsible" people are being helped.  We understand both points of view, but believe that mitigation is necessary to resolve the real estate crisis.

If more homes go into foreclosure, inventories will stay high, or even rise. Rising inventories will put further downward pressure on prices.  In addition, mortgage lenders holding foreclosed properties will continue to sell at deep discounts to get distressed properties off their books.  Foreclosures will continue through 2010-2011 if no action is taken.

We believe action is necessary and it appears the Obama Administration is thinking the same thing.

Top Mortgage News

Congress today authorized the release of the remaining $350 billion bailout or TARP funds.  As part of the agreement on spending the money, Larry Summers, the President-Elect's top economic advisor said in a letter to lawmakers, "The Obama administration will commit substantial resources of $US 50-100 billion  to a sweeping effort to address the foreclosure crisis.'' He also said that, banks receiving support under the plan "will be required to implement mortgage foreclosure mitigation programs."

What this apparently means is that $50-100 billion of the $350 billion will be targeted to keeping people in their homes. "We will implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage payments for economically stressed but responsible homeowners,'' Mr Summers said.

In the letter, Mr. Summers also addressed changing bankruptcy laws to permit Federal Bankruptcy Judges and Trustees to negotiate mortgage mitigation with mortgage holders.

Analysis

Buyers and sellers of Daytona Beach Homes will be affected differently if mortgage mitigation becomes a reality.  For sellers, stabilizing prices and removing foreclosed and short sale homes for the market would make seller a home an easier proposition than it is today. For buyers of homes and condos, stabilizing prices would mean that the bottom is closer and the window of what some are calling "once in a lifetime bargains" will be gone.

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