Quote:
Originally Posted by Strelnikov
Worse, they can actually do this with a straight face. .
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Strelnikov responding to you comments/questions - I could write a book on every situation and still fall short of every little tactic a bank will use to regain lost profit (or not to lose profit). Starting at the top, below is a brief summary.
You have to understand how the banking system works in relationship to our economy. Wall street investors are giving money to Mortgage banks to lend. The banks are writing loans to home owners for purchases and refinances. The bank then receives monthly payments from the home owner, which is pooled and passed back to the investors. The investors are looking for a return on their money. This is called a Mortgage Backed Treasury (MBT). The banks are making a small percentage on the interest rate with each loan.
During the life time on a loan, many time home owners experience banks changing. When this happens, banks are selling loans based on the future profit.
Example:Bank A does a 300,000.00 loan for home owner, over the life time of the loan they expect to collect $100,000 in interest (total amount $400,000). A short period later - Bank A sells the loan note to Bank B for $375,000. For the home owner to payment stays the same, only the name and address chnange where to make the payments. Poosibly a third time - Bank B sells the bank note to bank C for $350,000. Again only the name and address change. This analogy is every day between banks with 100's if not 1000's of loans pooled together. It is mind boggling on the amount of profit made.
Your question about them looking at profit in the long run. On average across America it costs banks around a total of $60,000 to have a foreclosure run it's course. In a bad location with home values have dropped, it is very easy to understand why people are living for extended periods before a home is lost. It would cost the bank more than the property is worth to foreclose. This is very predictable. Banks are mostly looking at the future profits of what they receive, verse what is going to keep the loan. If it is going to cost them more in the future.
You find it amazing banks put people off, then wanting to discuss the problem. I cannot tell you how many people I have spoken too where the bank lied to the home owner and end up denying them for a loan modification. Banks are looking to determine who much income comes into the house. If there is not enough, they deny on no affordability. If there is allow of income, the is using the raise the payment to cover any arrears, escorow shortages, fees, or penalizes.
People are going to their lender for a resolution, the bank is not responsible to tell you how to do or how not to be approved for a modification. Bottom line - it is all in the presentation to the bank, on wheter ther modification is going to benefit the lender. This is why people hire Mortgage Attorney to represent them. Another analogy could be the bank is on top, the loan is in the middle, and the home owner is on the bottom. A mortgage attorney is at a higher level - eye to eye with the bank, because the attorney doesn't her the loan with the bank.
You mention bankruptcy? I talk people out of BK, because the are other alternatives to take, less damaging for ones credit/financial future. Many people go to wrong type of attorney, getting the wrong advice. If a person needed a pair of glasses to see and they went to a foot doctor. They'd get a pair of glasses seeing 2 feet in front of them. Like doctors, being an attorney is a high specialized field.
A chapter 13 will stop a foreclosure stone cold. The homeowner will start making payments to a trustee for up to five years. The bankruptcy appears on their credit for 7 years, it will be a few years before they can qualify for another home loan - if they do it will be at a higher interest rate. If they make a late payment to the trustee, the bank can file a "relief of stay" to remove the mortgage from the BK.
Doing a chapter 7 with a 1st mortgage is used to postpone an existing sale date. This delays the foreclosure form happening for a period around 3 months. This is used when a home owner makes the minimum amount to support their loan.
How mortgage attorneys work, we take the battle to the lender, filing a moratorium to postpone a foreclosure if they is affordability with a lower payment. A bankruptcy attorney takes the battle to the courts. Most time the trustee payment is higher. Noting this is not one case that fits all.
End point - your are a number - as the next loan after you is a number. Lenders treating people as if they are stupid and disposable. They don't care because you are a negative number. Even if you were a positive number, possibly them treating you with more respect - your still a number in there computer.
Finally - speaking on a physiological view and the stressful condition known as anxiety as we get older. This is different for every individual. Our economy is driven by greed and profit. We as a nation need a serious change....
Sorry I got long winded - I enjoy what I do...
Good Luck
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