At Home in Indy: Paula Henry, Realtor® | Indianapolis Real Estate | 317-605-4174 (Home to Indy Team @ Sycamore Group Associates)

The NCAA and March Madness

If ever there was a time to try to explain the effects of March Madness on Indiana, it is now. For those of you who have not been reading the paper, watching television, or listening to the whoops echoing over the entire Midwest, you have missed out on a phenomenon known as HOOSIER HYSTERIA. Yes, the Hoosier State of Indiana LOVES basketball. And who is better suited to provide Hoosiers - and the world - with heart-stopping basketball but the mighty Butler University Bulldogs?

Cinderella Goes To The ball

Although Indiana, birthplace of basketball great Larry Bird and once home to former I.U. coaching legend Bobby Knight, is a state from which we have come to expect great college basketball, Butler is truly a Cinderella story. This school of only 4200 - my Alma Mater - consistently delivers a team with bulldog hearts, high academics, and gentlemanly, albeit ferocious, game.

Last year Butler, underdog to the much bigger competitive schools, made it to the NCAA finals in spite of the odds. In a riveting play-off game, the Bulldogs hung on until the last second when a half-court shot by Gordon Hayward bounced off the glass just as the buzzer announced the crushing Bulldog defeat. The fact that Butler had made it all the way to the just-shy-of-glorious end, with shorter and younger players, was more than admirable - it was the stuff from which legends are made.

This year the number eight seeded Bulldogs are back to play out the final chapter of the legend. Yes, they are once again in the playoffs, having just triumphed in a heart-stopping overtime "Elite Eight" game against the number two seeded, very talented Florida Gators. As the Bulldogs rallied to a 74-71 win, hearts broke all over Florida. Indiana, on the other hand, was high-fiving corn dogs and screaming "Booyah!" My friends there tell me there were horns blowing all over town, and neighbors were in the streets hugging each other.  The excitement of the Bulldog performance swept the state with more force than a summer tornado.

The Pride and the Passion

Why is it that Hoosier Hysteria exists in the first place? What is it with Hoosiers and their basketball?  In my opinion, Hoosier Hysteria is a result of something very basic to that state. Indiana is a warm and friendly place that supports family...and good Hoosier values. And what better to value than the lessons learned from healthy sports competition? Hoosiers raise their kids to be polite, to play fair, to believe in miracles, and to relish the challenge of a tough fight. They teach their kids to be steady and consistent (unlike the often harsh Indiana weather that changes every five minutes). And they teach them to be tough.  A Hoosier will politely say, "Excuse me, sir" just before trampling a bone-crushing opponent with more force than a John Deere tractor. 

Hoosiers have a belief in themselves as champions. The residents support their players, and the players give back with every ounce of energy they can muster. Hoosiers give great basketball because they know how to give of themselves.  Hoosier Hysteria exists, because Hoosiers have heart. And if you want to see a bunch of great kids play with more heart than you knew was possible - watch the Butler Bulldogs in the Final Four game. You will quickly realize that Hoosier Hysteria is more than an Indiana phenomenon - it's the apotheosis of Hope and Possibility - something we all need these days. Yes, I said it folks - I, the fairly liberal Democrat living in the wild and wacky state of California just said it: We all could use a little Indiana HEART!

WATCH BUTLER IN THE FINAL FOUR GAME THIS SATURDAY WHEN THEY MEET VCU AT 3:00 PM!

Active Rain's BRUCE WALTER (a proud Hoosier) and I will be at the game virtually via text. Please email me if you would like to join in on the commentary!

Has your short sale or loan modification been turned down and you have no idea why? Let's examine some of the reasons. These reasons may not make you feel any better or maybe they are just excuses by your lender, however there are a few things you may not even know about your loan.

Let's say that you make your mortgage payment to Wells Fargo. You can no longer handle your payments so you ask Wells Fargo to modify your loan- to do a loan modification for you. You are behind in your payments. You are in fact, in foreclosure but you are still living in your home and the judge in your case has not ordered the sale of your home at auction yet. You are scared. You see your neighbors losing their homes all around you. You are hopeful because you see on the news and in the newspapers that the Federal Making Homes Affordable Program has been helping some folks keep their home and get a loan modification.

You are no longer making your mortgage payment because your adjustable rate has been applied and your mortgage payment has gone from $1600 a month to $2300 per month. You just can not make these payments. You have been trying for almost 2 years now to get Wells Fargo to approve your loan modification. You even hired an attorney to help you with your foreclosure defense.

Wells Fargo turns down your loan modification request. You wonder, how could this be? After all, Wells Fargo is one of the large lenders and is participating in the government's Federal Making Homes Affordable program.

But Wells Fargo tells you that the investor is the one that will not allow you to get a loan modification. What in the world is an investor doing making decisions on your loan you wonder. Well, you are not alone in your confusion. Every day we are explaining the whole mortgage note owner thing to buyers agents, real estate agents and homeowners.

Just because you make your house payments to Wells Fargo does not mean they own that note that you are paying on. They are the servicer. Other words you will hear them called are  asset management companies.

The very first thing you need to do before you ask for a loan modification is to find out who actually owns your note. You can do this by calling who you make your mortgage payments to and asking them.

If it is Freddie Mac or Fannie Mae that own your note- you have a much better chance at getting your loan modification approved if you qualify. If it is a private group of investors, your chances go way down. Why would this happen?

One in eight homeowners' loans were sold to investors on Wall Street. What happens is that a bunch of loans are packaged together. These are called mortgage-backed securities. They are then sold off to investors. Homeowners who have mortgage-backed securitized loan are five times more likely to be late on their house payments. Many of these borrowers were given loans they were not qualified for from the beginning. Many of the homeowners getting these loans did not read the fine print and did not realize how high their mortgage payments might go when adjusted.

The rules to allow modifications, short sales and terms of foreclosures and deficiencies are ambiguous at best. Homeowners who are told no by the investor have little recourse.

The federal Making Homes Affordable program lenders who participate in the program must modify all homeowners that qualify. The exception is when the investor has a rule that they do not allow modifications.

The Federal Housing Finance Agency reported to Congress on June 3rd that these securitized mortgages are a "hurdle" to the success of the Making Homes Affordable program. The treasury department has not disclosed why the modifications are denied so there are little to no facts to go on.

Why would the investors say no to your loan modification? Well, Wells Fargo's response is that the investors need their money. Wells Fargo has one situation where the borrowers ( the homeowners) are trying to get their loan modified but Goldman Sachs is the issuer and Deutsche Bank is the trustee. But when you go and talk to these investors and we have on several occasions when doing short sale negotiations for our sellers; the investor passes the buck back to the servicer. For instance, Deutsche Bank says that Wells Fargo is solely responsible for the decision to modify a loan or not.

Some people say that the investors are the scapegoats. Everything can easily be blamed on them. Since you rarely get to speak to anyone at the investors' group it is hard to tell who is telling the truth. In this particular situation Wells Fargo is saying that the investor is not forgiving the past due debt and that makes the payment go up on a loan modification because then Wells Fargo would have to put that past due balance along with all the penalties and fees into the loan modification which then may cause the homeowner to not qualify financially for the loan modification.

Servicers have agreements, contracts that they sign with investors. These agreements contain the rules for modifications. These agreements are called Pooling and Servicing Agreements which is known as PSA's. The PSA is most often what the servicer says is the reason for them not being able to do the loan modification or release the deficiency on a short sale.

But when you talk to other people in the management areas or to the investors they claim that there is nothing in the PSA's that would prevent the servicer from approving loan modifications, short sales and releases. There is a new study coming out from a law school wherein they state that only 8% of these mortgage-backed securities  agreements contain any language that says the servicer is not allowed to do a loan modification for these notes. That means that about 92% of all the NO's; could actually be YES's. So why would that even happen?

Fear of law suits! The language in the PSA in question here, Wells Fargo and Deutsche Bank- it says that Wells Fargo can "waive, modify or vary any term" as long as Wells Fargo as the servicer makes a "reasonable and prudent determination" that the modification is in the investor's best interest. Attorneys examining these agreements say there is quite a bit of room for servicers to make these decisions. But the language itself in this agreement is enough for the servicers legal counsel to be concerned with the investor suing them for not acting in the best interest of the investor. They can not, no matter how inhumane this sounds, put the homeowner ahead of the investor. This is about business and if they want business from investors they need to make sure they are looking out for the interests of the investors.

The treasury department has stated that the fear of law suits is the biggest deterrent to getting the servicers to approve loan modifications and short sales. So doing little or simply turning down the loan modifications are the answer many servicers choose. This is not personal and this is not against you, the homeowner. The position of the servicers is to watch their own backs and to protect the assets to which they have been entrusted with, your mortgage-backed security. The Treasury Department says they can relieve some of the pressure of the fear of lawsuits by standardizing requirements for loan modifications and also provide some type of calculation to figure out if the investor will make more money by the loan modification or by the foreclosure.

We need to keep in mind one big thing in all of this and that is that these investors end up being regular people because most of these mortgage-backed securities were bought by pension funds and retirement plans of folks like your parents or even yourselves. You may well be one of the shareholders of the very loan you can not pay.

 

        

 

 

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Is Your Short Sale Or Loan Modification Being Turned Down?-was first published on South- Florida-Luxury-Living.com.

Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Is Your Short Sale Or Loan Modification Being Turned Down?*