It’s not surprising that out of all of the video clips on the Market Watch website that Mr. Rosen’s interview is the third most popular watched clip.
I found it quite disturbing that when asked why we were having such issues with these subprime mortgages, Mr. Rosen stated, “easy credit, lot’s of fraud and poor underwriting.” I think fraud is one of the biggest issues facing lenders right now and if they don’t modify these predatory loans and adjusting ARM’s, then they and their investors will be in for a rude awakening. I predict massive class action lawsuits and properties and money ties up in litigation. Only if the investors knew how much junk and fraud is in those mortgage’s. They think they know but they have no idea!
I am on the front lines and I see daily what’s going on. Lenders and servicers are not designed for the market that we have now. Their operations see set up around originating loans. Not mitigating them. It’s like they have had to reluctantly change hats over night from selling mortgages like hot cakes to helping borrowers in distress.
Congress needs to step in and take charge of this failing mortgage system that needs serious restructuring in order to handle the massive loan modifications that are needed to avoid a recession. Lenders and servicers need to outsource and hire independent contractors to help handle their loss mitigation and pre-foreclosure efforts.
This isn’t rocket science people. Let me show you how simple it is with this example:
Borrower pays mortgage on time for 2 years. ARM adjusts on borrower and borrower can’t afford now. Borrowers is now late on mortgage. Borrower can’t refinance because his credit is poor and loan to value to high at 100%. Borrower keeps trying to refi but can’t and is on his way to foreclosure. Lender will have to foreclose on borrower and come out of pocket to the tune of around $60,000 and then place the property on the market where it will sit and sit.
Solution: Loan Modification. Fix ARM loan, lower payment= Happy Borrower & Happy Lender & Happy Investors
There are thousands of good people in bad loans that want to save their homes. They don’t care if they are upside down and owe the bank more than it’s worth. It’s just not about an investment to them, it’s about having a place to call home.
Just modify these good peoples loans and we can all live happily ever after
I’m upside down in my home value and I can’t refinace. I can’t afford the new adjusted rates for my mortgage and I fear losing my property as a result.