Where's the Relief? | Business
By now, we’ve all heard the news, “CA and NY have joined the multi-state mortgage settlement.” As a real estate and mortgage professional, I did (legal) loan modifications for nearly four years and I can assure you, California joining this lawsuit will do little to help California home owners struggling to keep their homes.
Let’s look at the facts, the most important one being that CA has six out of the top ten cities in the nation hardest hit by declining home values (Modesto (4), Merced (5), Stockton (7), Riverside (8), Bakersfield (9), and Vallejo/Fairfield (10), with many of them 30-50% underwater.
The bottom line is this, a $20,000 principal forgiveness is not nearly enough to help balance out the numbers from underwater to break-even. That forgiveness from the bank makes them look like the good guy, offering up some relief when the fact of the matter is, that same bank, when push comes to shove, is likely going to accept $100,000-$200,000 (or more!) less than what is owed for the property in a short sale.
The “Up To” $2,000 for homeowners foreclosed on between 2008-2011 is a pittance compared to what was lost and will stay with them every time they have to report on an application of any kind that, yes, they have a foreclosure.
Who will regulate the banks to make sure that all the settlement money is paid out appropriately and how will a homeowner know if they qualify – other than having to rely on their bank to tell them? I know how that worked with loan modifications!
News 10 has posted some answers to frequently asked questions here, it’s a good start, but like other relief programs (MHA, HAMP, HAFA, etc.); the details are not readily available. I will post more information as it becomes available, so check back or feel free to e-mail me at Kdpartak@gmail.com. I will be happy to answer questions and if I don’t know, I’ll see what I can find.