Realistic Solutions Are Becoming Available
Posted by leowalker on 22
Today’s article in the Business Section of the San Gabriel Valley Tibune should give new hope to home owners in trouble. In the case of IndyMac the bank is making exceptional efforts to contact homeowners in trouble and offer them a modification on their loans.
The agency says modifying many of those loans – which include lowering interest rates to as little as 3 percent for the initial five-year period – must make economic sense, especially because the agency is soliciting offers from other banks to purchase all or part of IndyMac.
“This is not a social program,” said Michael Krimminger, a senior adviser to FDIC Chairman Sheila Bair. “It’s designed to recover the maximum amount of money.”
. . .
While IndyMac has received responses from about 70 percent of the initial 7,500 letters it sent out in late August, the first group of borrowers contacted by IndyMac may turn out to be low-hanging fruit because the bank first targeted borrowers who already had updated their financial information with the bank.
Others may prove harder to reach. Delinquent borrowers are inundated with collection calls and mail, and often give up hope about holding onto their homes.
“The biggest hurdle is getting people to open these letters to read about the modification offer,” said Evan Wagner, spokesman for the renamed IndyMac Federal BankFSB.
In addition, borrowers need to provide proof of their incomes to participate, and that may be impossible for those who originally exaggerated their income or assets to qualify for a loan.
The IndyMac program is currently designed to help only homeowners on the verge of foreclosure: those who are at least 60 days delinquent on their mortgage.
Wagner, nevertheless, said IndyMac is looking for ways to allow more people to qualify.
This makes good sense to me. It allows homeowners who have run into difficulties as a result of the economic downturn to get their situation under control. Hopefully by the time the five years are up people’s financial situations will have improved and they’ll be able to keep their homes for the long term. Other banks are looking to follow suit.
I would strongly urge anyone who is having difficulty to contact their lender to see what can be done. Be careful, though, and be sure you fully understand the terms and conditions of the deal that is being offered. Be sure and read everything carefully. Ask questions. Remember: if the answers to your questions don’t jive with the paperwork, the paperwork wins. So make sure that whatever promises are made are reflected in the paperwork BEFORE you sign anything.
