Mortgage Foreclosure & Refinance Resource

The number of foreclosures jumped to 223,538 in September, 99% higher than the number last year, though down 8% from August, according to RealtyTrac, which compiles housing data. California had the largest number of foreclosures, with 51,259, and Florida was second, with 33,354.

With statistics like that lenders are becoming more flexible in their negotiations with the borrows to keep from having to foreclosure on the properties. Here are some things that lenders have been willing to do lately, complied from numerous news reports.

• In early October, the company handling a client’s mortgage suggested simply subtracting $21,000 off her client’s $121,000 mortgage debt.
• Ocwen Financial went on to suggest a permanent cut in Thomas Stroud’s interest rate to 8 percent — even lower than his initial teaser rate — so the building maintenance worker could manage the monthly payments on his north Minneapolis home, which otherwise was headed for foreclosure.
• The counselors at Habitat for Humanity believe the signs are encouraging. Cheryl Peterson, manager of the foreclosure prevention program, said in recent months they’re getting loan modifications for 20 percent of clients, “significantly higher than it’s ever been.”

For those lucky enough to live in California:
Today, Mr Schwarzenegger’s arrived to an agreement with four of the state’s biggest mortgage lenders - Countrywide Financial, GMAC, Litton and HomeEq.  The lenders will extend, for a “sustainable” period, low introductory rates on adjustable loans to homeowners at risk of foreclosure. This should allow people more time to workout their financial plans to stay in their homes and avoid foreclosure.

The most interesting note comes from a StarTribune article:

Mortgage services have said their investors will sue them if they modify mortgages. Mortgage-backed securities come in all shapes: Some are all-principal; others, all-interest; some are high-grade, low-risk; others, the opposite. Given that variety, any changes servicers make will mean losses for some and not others.

And the losers will call their lawyers, the servicers said.

So for a bit of analysis. The investors want to make as much money as possible, and looked the other way when the mortgages were given out to everyone without background checks. Now, that their money is on the brink of being lost, they are holding the same companies they encouraged to just give out the mortgages responsible. Oh the irony…