Will new HAFA Program approve more Las Vegas short sales and slow down Foreclosures?

Posted by Paul Francis on Friday, April 23rd, 2010 at 1:38pm.

Servicer Profits are greater then Government Incentives

From Businessweek:

Mortgage Servicer Profits Greater then Incentives to Participate.

Mortgage servicers may have to take a pay cut to participate in President Barack Obama’s programs to modify home loans and advance the sale of properties in default.

Starting this month, the Treasury Department is paying companies that collect mortgage payments and examine pleas for assistance a $1,500 stipend for approving the sale of homes for less than the loan balance, known as a short sale. The servicers also get $1,000 for each completion under the government’s year- old mortgage modification program, and additional stipends over three years if borrowers stay current on their payments.

Those “carrots” won’t be enough to save the majority of the 4.6 million U.S. homes that have mortgages more than 90 days overdue, said Diane Swonk, chief economist of Chicago-based Mesirow Financial, which oversees $37.4 billion. The payouts at the heart of the Obama administration’s programs don’t come close to what servicers earn by foreclosing, she said.

There are also other details concerning Las Vegas short sales where lenders have to give up certain rights they have if they participate in the new HAFA program. I'm not sure if they will want to waive some certain rights they have for payoffs that are smaller then what they could receive otherwise.

The vast majority of people are confused when it comes to who owns their mortgage. They think because they make their payments to Big Lender that Big Lender owns the loan. In many cases they are just a servicer. If you really want to get into this in detail, you can read more at this study performed by Consumerlaw.org and learn more about how servicers make their money.

Why Servicers Foreclose when they should Modify and other Puzzles of Servicer Behavior

If you want to just skip to the good stuff... go to page 6 where it gets into how Servicers make their money. So next time you hear the story of somebody that went through a year of hoops for no reason... you'll have a better understanding of why.

Also... be leery of all the newbies jumping into something they really don't understand when it comes to Las Vegas Short Sales and promising the world on a new short sales Program being the greatest thing since sliced bread. It may just turn out to be as successful for Las Vegas Home Owners as the loan modification program.

Paul Francis
Prudential Americana Group - Realtors
Las Vegas Short Sales
702.592.3058

;

 

 

 

Be the first to comment on this blog entry!

Leave a Comment