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BS Show Episode 3-Short Sale and the Security Nightmare.

Thursday, March 25th, 2010

REALTOR’s all over Arizona have changed their business models to pursue short sale.  It makes sense as up to 65% of all the sales that take place in Maricopa County are distressed sales  (short sale or foreclosure).

As a Realtor you are most likely concerned with identifying short sale candidates, marketing and contacting them, finding a buyer and ultimately negotiating a successful short sale.  In order to approach the bank with a short sale there are certain things that most agents will collect : pay stubs, tax returns, social security numbers just to name a few.

According to Don Doerr and Doug Farnham of Thomson Conant’s Mortgage Mediation Group, there are compliance regulations that now apply to you and your business as a result of collecting financial information to short sell a property.  I was not aware of this either, which is why we chose to make episode 3 of the “BS” Show: “Short Sale and The Security Nightmare” .

Most loan originators are aware of the rules associated with accepting sensitive client information.  They do it on a daily basis. Most real estate professionals, however, have not had to deal with compliance regulation and processes such as DSS (Data Security Standard), DLP (Data Loss Prevention) and ILM (Information Lifecycle Management).   These are more than just fancy terms.  These processes apply to anyone that has access to client information, for how long, how data is stored and disposed of, and requires you to show logs and security measures to establish compliance.

Arizona is in the top 5 states for identity theft. According to Don and Doug, If ID theft is linked back to a leak at your company, you will be required to demonstrate how you have followed all required regulations.  You will also need to produce  policies and procedures, document and logs to show that regulations were followed.  Before you tell yourself this could never happen at your business, think about this; cyber crime is growing at record pace and becoming more sophisticated each day.  Even the largest companies with the biggest security budgets have been infiltrated.  Although the economic return from hacking your computer may be small by comparison, your computer is an easy target.  A hacker will always go after the low-hanging fruit first.

There is no way to guarantee your computer or office has not, or will not be compromised.  Compliance is about minimizing that risk and being able to show that you did your due diligence to secure the data in the event of a breach.

Some things to consider even if you don’t store client information on your computer:

  • Email is not secure.
  • Do not accept information by email.
  • Additionally, if your email syncs to your phone you have just extended the endpoints of your data network as these devices should be encrypted.
  • It is possible to have data stolen from your phone through a blue tooth connection without your knowledge and of course there is always the possibility of losing your phone.

Chat (messaging) programs are also not secure, they store a chat log on your computer, and are a common method hackers use to gain access to, or upload malware to your computer that will monitor your activity.

Many lenders require information be entered into an online system (i.e. Equator).  If your computer is compromised this data could be captured by hackers and sold to the highest bidder.

Required Regulations:
Don and Doug remind us “there are many regulations that apply when you start accepting sensitive client data.  Most of these contain overlapping requirements.  For many companies, following the PCI (Payment Card Industry) requirements covers the minimum requirements for many other regulations.   Even if you do not accept or process credit cards, PCI is a well accepted standard and is very clear in its definitions.  It is also well supported by numerous software programs for testing and report generation.   As an alternative to PCI, ISO27001 is becoming an accepted standard.  Because the data collected by a client relate to mortgage origination there are parts of SOX (Sarbanes Oxley) and GLBA (Gramm-Leach-Bliley Act) that could apply.  But these last two are not as well defined as PCI or ISO27001 and are somewhat vague as to DSS requirements.  FISMA is a government standard released by NIST (National Institute of Standards and Technology) that seems to have some teeth as far as enforcement and penalties.”

You are responsible for the security of the data you receive from a client, even if you have a third party handle the negotiations and processing.  It is imperative that you confirm that any software you use to process or any third party used to process this data meet these requirements.

For more information about Data collection and how you can protect your clients and yourself, please contact

Don Doerr
Director, Mortgage Mediation Group
602.774.3757
ddoerr@tcmmg.com

www.MortgageMediationGroup.com

or

Doug Farnham
Thomson Conant
602.326.6552
dfarnham@tcmmg.com

Here are some links to help you with tracking and compliance:
PCI (Payment Card Industry) Compliance
Policies and Procedures Template for PCI
GLBA (Gramm-Leach-Bliley Act)
FISMA
ISO27001
MA201
MediationNet (Short sale software for attorneys and processors.)

For All Your Marketing, Escrow and Title Needs

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Posted in Education, The B.S. Show | 3 Comments »

Realtor Designations, An Uncomfortable Conversation

Tuesday, March 23rd, 2010

Yesterday I was called by a client who was extremely excited that she got her ABR.  The first question I asked is “Does having that or any designation get you more business-does it increase your bottom line?” Her response…..”Stephen-buyers and sellers want to know that they are working with a Realtor that has invested in their education-so yes it does get me more business.”

But really does it?

I can understand that the education that comes with the designation is valuable but what about the designation itself?

I am not a Realtor so what I see is from the outside looking in, that doesn’t mean that I am right or correct, it’s just my opinion.

Here is where the uncomfortable conversation starts.

I think there is a cottage industry of companies that are lining up to sell Real Estate professionals designations.  But does the designation actually get you more business? Does it increase your bottom line?

We are all consumers in some way or fashion and as a consumer I wonder if a Realtor’s designations or anyone’s designations for that matter translate into more business. Does it make a buyer or seller more likely to call you?  If you took your Toyota in for service, do you really care if the mechanic is TBV certified?  Do you even know what TBV means?  I don’t think the consumer says “Oh look honey, lets pick this REALTOR or that mechanic because he/she is a ABR or TBV. Why? Because they have absolutely no idea what it means. More importantly, they have no idea what it means to them….what is the benefit to them? Remember: What’s In It For Me?

Everything I have read leads me to believe that consumers usually are finding the area they would like to live in on the Internet, then the property, then the Realtor.  When they go to the Internet, they are not looking for a Realtor, they are looking for property.  When it’s time to find a Realtor, they will often pick the first one they come across to make their home ownership goals a reality.

There are tons of designations out there available to REALTOR’s: ABR, GRI, CRS, CDPE, ABRM, ALC, CCIM, CIPS, CIM, CRB, CRE, GAA, GREEN, PMN, RCE, SAA, SRES, SIOR, AHWD, E-PRO, REPA, RSPS,SFR, TRC the other day I even saw a designation for social media!  If I don’t know what most of these designations mean and you probably don’t either….does the consumer?  So I ask again, Is there any value for designations? Does it increase your bottom line?

In my opinion, the only designation that means anything to the consumer is the one that doesn’t even exist.  I.P.P.S. or I Provide Phenomenal Service.  This is a designation that consumers would surely look for, especially since real estate is a SERVICE industry.

I have an idea,…how about a new designation the “I Provide Phenomenal Service”.  The “I.P.P.S.” designation would let everyone know that you are the creme of the crop in what you do. That you have the stamp of approval from other buyers/sellers that have worked with you. That you can be counted on to do as you say. Sounds like basic requirements to be in business today, sadly it’s not.

What should the basic requirements be?  90 hours of classroom instruction? Service school? A proven record of delivering on past commitments?  Letters of recommendation from past clients?  A high score from a secret shopper? Written Test? Bootcamp?

By the way, since I appear to be on a rant I will go one further……When the consumer see’s “Top Producer”, “Multi-million dollar producer” “Presidents Circle”etc.  on someones business card or marketing,…Does It tell them that its more about YOU than THEM?

Does anyone really care that someone was a “Top Producer 2003″, it’s 2010!

About the only one that I see that has some value is the GRI, as it teaches a Realtor how to do a business plan and marketing plan.

Remember, the number 1 complaint in the real estate industry (Realtors, Escrow, Title, Lending) is lack of communication.  In a service occupation like real estate many fail to provide the most basic service….Communication.

What do you think…..Are designations in real estate important? Do they mean anything? Do they increase your bottom line?

By the way….I made the TBV designation up, so don’t go around looking for a TBV certified mechanic…

Stephen Garner YTU, JUY, MHF, U-Pro, YTV. MCX, MP3, KGB, FBI,

For All Your Marketing, Escrow and Title Needs

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Arizona REALTORS: Is Your Marketing Ahead Of The Market?

Wednesday, March 17th, 2010

I took a drive up to Scottsdale from the southeast valley today to hear Max Pigman of Realtor.com discuss capturing and converting buyers, social media and getting ready for profit in 2010.  Just when I thought I knew it all, someone like Max comes along and puts what I was thinking into hard numbers.  That what he did for me, and that what I will attempt to do for you.

Now, this information is for my clients, if you are not one of them, kindly close this page and go about your day…….

OK, now that they are gone…..  Here we go.

What is the market doing?

Nationally we have seen 8 straight months of rising higher sales rates. More houses will be sold this year than last year and more the following year.

REALTOR.com expects 15% higher unit sales nationally.

Have you seen the local news lately? Even the news is encouraging buyers to get off the fence and buy now.

Why this is a great opportunity for you:
1980 there were 760,000 REALTORS in the U.S., at a time when there were 17, 18 or even 19% interest rates. 70,000 of these folks got out of the business in 1990 due to the recession.
1990 673,000
1990 820,794
1995 726,251
2000 756,748
2006 1,103,386
2007 1,265,569
2008 1,336,855

NAR has just announced they expect their membership to drop to approximately 1,112,645 members. This number is down 224,000. This means there will be more homes sold this year than last year AND there are less competing REALTOR’s.

Here is your opportunity:

Most profit is made by REALTORs that are positioning themselves for the rebounding market. Your marketing needs to be ahead of the market. Most agents I speak to are shell shocked, they have cut out most if not all of their marketing!  You have an opportunity to be in the right place at the right time.

In the next 90 days, there should be alot of buyers entering the market, more and more buyers believe the market has experienced a “snap bounce” they believe the market has gone down too far and will rebound quickly.  This is a great time to capture market share.

Is now the right time to buy?

YES! You know it and so do I.

Facts:

In 2007 the average price here in Phoenix was 257,900. In 2009 Q4 the average price was 143,900. That is a 44.01% decline!

Now could be the perfect time to buy. Lets take a a value of $300,000.

2006 value                                      $300,000
Today’s value                                      167,700
% adjustment                                         44.1%

Difference                                          $132,300

Now factor in appreciation.  Lets use conservative estimates.

5 year Appreciation estimate

Year 1    0%

Year 2    1%

Year 3    2%

Year 4    3%

Year 5    4%
2015 estimate of value for  a home purchased today is $184,470
potential gain $16,770
tax credit $8,000

Gain in 5 years =$24,770

BUT…..If interest rates go up even .5% a buyer will have $25,000 less in purchasing power. This is why it’s important to buy now..

I’m telling you, This is the most opportunistic market most people have EVER or EVER will see.

There are more houses to sell and less agents to sell them. There is some opportunity there for you.

Of course, all the information above assumes that you are continuing to market yourself.  When a buyer believes that there is a great opportunity to buy, they will go to the Internet.

Will they find you?

Ready?

Go.

Arizona Realtors, If you would like help getting your marketing set up to take advantage of these opportunities, Lets Talk…. please call me.

For All Your Marketing, Escrow and Title Needs

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Introducing the B.S. Show!

Thursday, March 11th, 2010

Did you hear the latest Buzz?  Its seems there are 2 crazy guys out there in the Phoenix Metro area that are breaking all the barriers when it comes to marketing. What are they doing?

Remember that game you played in high school, maybe college….maybe pre-school (if you were cool) called B.S.? Can’t say what it’s really called here…. {Insert words to play along at home.}

You know the game involving a deck of cards, maybe some beverages and as many players as you choose.

Using the BS format, our show will focus on Short Sales in Arizona.  Sample question, “I was told I need an attorney to negotiate a short sale for me, Is this true?”

B.S.! {correct answer and explanation to follow.}

Below is our first episode.



The best part is, unlike TV, the folks at home actually get to participate. We are currently looking for short sale experts to appear on the BS show, (Loan Officers, Accountants, CPA’s, Bank Negotiators, Attorneys etc.).

To the folks at home, email us your questions to BSBlogQuestions@Gmail.com and we will answer them on the B.S. show.

Wondering why we call our show the B.S. Show?

B: Blair Ballin, a local short sale Realtor with Williams Real Estate Company

S:  Stephen “MyTitleGuy” Garner, a local Title Rep with a national Title Company.

Notice the visual aid…..My hair!

Thanks for stopping by!

For All Your Marketing, Escrow and Title Needs

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Posted in Education, Marketing, The B.S. Show | 2 Comments »

Fannie Mae Now Allows Buyer to Choose Their Own Title Company-Yipee

Tuesday, March 9th, 2010

You take a buyer out, after showing them 10-20 homes, they identify the home of their dreams, It’s an REO, most likely.  Now you go through the hassle of getting in touch with the listing agent, is the house still available? You write on the house, submit the contract. There are 22 offers already.

Counter-Highest and Best

Contract Accepted-You Got it- Yipee!

Now, you are told you have 24 hours to open escrow, oh yea and “You Must Use XYZ Title company in Peoria, Scottsdale maybe Glendale-one thing is for sure, it will be nowhere near where you or your client are. Oh and mobile signing (HA-Forget about it!)

Escrow is open:

Trying to get a hold of the escrow officer-not fun-Voicemail

Assistant-doesn’t know much about your file-Voicemail.

Frustration-If You Could Only Choose Your Own Title Company!! This would have never happened!

Well, Now you can. That’s because Fannie Mae will now allow your buyer to choose their own title company!

Fannie Mae has altered their sales addendum for REO properties so the buyer can now choose their own title company.   When you see the addendum to the contract, review Section 2B, page 1, line 4; Look for “The closing shall be held at a place so designated and approved by the Purchaser“. The truth is, your clients have always had the right to choose the title company and the addendum change now reinforces that right.

What does this mean to you? Well, if you choose Old Republic Title Agency, you will:

Get a fantastic service experience with one of the best escrow officers around

Old Republic Title Agency is one of few title companies in the valley that works with Fannie Mae

You get to take advantage of our Advantage Program!

The Old Republic Title Insurance Group has An A to A+ financial stability rating from Standard and Poor, Moody’s, Fitch and A.M. Best. We are not going anywhere. Your clients Title Policy will be there if its ever needed.

Unsurpassed Ratings





And get this, we answer the phone! Lack of Communication is the #1 complaint in the Real Estate Industry-Isn’t that sad? In a service occupation like escrow and title many have forgetten the Service! We have not.

I will be more than happy to pick up your contract and drop off your check at closing.


We hope you will choose Old Republic Title Agency on your next escrow. Thank you!

Old Republic Title Agency
1744 S. Val Vista Drive Suite 213
Mesa, AZ 85204
Office: 480.892.2306
Fax:     480.892.2680

For All Your Marketing, Escrow and Title Needs


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Your Arizona Home Was Sold At Auction-What Are Your Rights? UPDATED

Tuesday, March 9th, 2010

You are having financial problems, you may be under employed or unemployed.  You can no longer make the payments on your home. You have submitted the necessary paperwork to your lender in the hopes of qualifying for a loan modification. To add a little more stress, your home is scheduled to go to public auction.

As stressful as the above situation is, imagine this: While your attempting to qualify for a loan modification, there is a knock at the door.

It’s the new owner.

Yep-it turns out that while the $10 per hour customer service rep at your mortgage company was telling you “everything is going to be fine, we have postponed the trustee sale” your home went to sale and was purchased for pennies on the dollar.

Now the new owner is telling you “you need to move out-today!“  You are scared, and you don’t understand Arizona law.

But do you really need to move out immediately? What are your rights?

Arizona Revised Statutes 12-1171 through 12-1183 are the state of Arizona’s laws for the foreclosure-eviction process.

Article 4 – Forcible Entry and Detainer

  • 12-1171 – Acts which constitute forcible entry or detainer
  • 12-1172 – Definition of forcible entry
  • 12-1173 – Definition of forcible detainer; substitution of parties
  • 12-1173.01 – Additional definition of forcible detainer
  • 12-1174 – Immateriality of time possession obtained by tenant
  • 12-1175 – Complaint and answer; service and return
  • 12-1176 – Demand for jury; trial procedure
  • 12-1177 – Trial and issue; postponement of trial
  • 12-1178 – Judgment; writ of restitution; limitation on issuance; criminal violation; notice
  • 12-1179 – Appeal to superior court; notice; bond
  • 12-1180 – Stay of proceedings on judgment; record on appeal
  • 12-1181 – Trial and judgment on appeal; writ of restitution
  • 12-1182 – Appeal to supreme court; stay and bond
  • 12-1183 – Proceedings no bar to certain actions

Michelle Lind, general counsel for the Arizona Association of Realtors, explained to the Arizona Republic how Arizona’s eviction laws work.

“The buyer of a foreclosure home has to give the home’s former owner notice to move out,” she said. “If after five days the former owner doesn’t move out, the new owner can file with the courts for a forcible eviction.”

If you believe you are losing your home illegally, you can hire an attorney and fight the sale and/or the eviction.

For All Of Your Marketing, Escrow and Title Needs

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Posted in Education, Sellers | 10 Comments »

What’s Old Republic Title Agency’s Advantage Program?

Monday, March 8th, 2010

AAH-the good old days-

Remember the good old days when at the end of a signing your clients would get a copy of everything that was signed or reviewed at the closing? You know, that big heavy package filled with copies of the purchase contract, note, deed of trust, pre-audit, final HUD 1, title commitment, invoices, home warranty information, appraisal, signed loan documents, escrow instructions, seller payoff and new lender information? (Breathe)

Well the old days are over at Old Republic Title Agency. That’s because we recently started Advantage.

Advantage is a CD that provides instant access to pertinent documents, it’s convenience at its finest. Advantage transforms your customers bulky unorganized file into a small company disc.

Tim Loria, Realtor-JK Realty

Caption: Tim Loria, Realtor with JK Realty in Mesa receiving his Advantage CD from a recent closing.

Benefits of Advantage

  • Handy access for all future financial transactions
  • Your clients will keep CD’s more often than large paper files
  • Professional, finished product with no additional cost at closing
  • Each time the CD is used they are reminded of who gave it to them-YOU
  • Your name and contact information are prominently displayed on the CD
  • Organized in an efficient manner around the needs of your client
  • Can be used as a valuable mailing piece at tax time
  • Its GREEN! You’re saving trees

Did you know that home warranty is the #1 referenced information after the closing…..more opportunity to see your name and contact information-again-helps with client retention.

For more information about Advantage or to find out other ways I can help build your business, please call or email me.

Old Republic Title Agency
1744 S. Val Vista Drive #213
Mesa, AZ 85204
Office: 480-892-2306
Fax:    480-892-2680

For All Your Marketing, Escrow and Title Needs

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Arizona Homeowners: How Changes In Short Sale Rules Benefit You.

Sunday, February 28th, 2010

A short sale of real estate occurs when a property is sold and the lender agrees to accept less than is owed on the property. The lender agrees to release the lien that is secured on the  property upon receipt of less money than is actually owed on the home. Until recently, a short sale usually occurred when a homeowner could not make their payment on the property. Until recently….

Breaking news regarding short sales.

The rules are changing in regards to short sale.  In December, HUD announced that they will now insure FHA loans. If you are able to sell your house while you are current, you will no longer need to wait 2-3 years to purchase a home again. You can purchase immediately. In fact, in some instances, you can purchase a home 1 day after your short sale is completed.

Of course there are some rules

  • Must be current on your mortgage for the previous 12 months
  • Must have a case to move. You cannot take advantage of this program to financially benefit yourself. Acceptable reasons include divorce, job relocation, marriage, birth of a child etc…

Your short sale will in effect become a normal transaction.

More help for struggling homeowners

HAMP and HAFA

Housing Affordable  Modification Program: This  plan involves a straightforward trade-off. The government asks lenders to cut mortgage payments for eligible applicants by lowering their interest rates or extending the life of their loans. In return, the Treasury reimburses lenders for some of their costs. The lender will have to first reduce payments on mortgages to no greater than 38% Front-End Debt-to-Income (DTI) ratio. The treasury will match further reductions in monthly payments dollar-for-dollar with the lender/investor, down to a 31% Front-End DTI ratio for the borrower.

Millions of homeowners who are regular in their mortgage payments, but having difficulty making the payments and the borrowers who have already missed one or more payments may be eligible for loan modification.

Housing Affordable Foreclosure Alternatives

HAFA is part of the Home Affordable Modification Program or HAMP.  The Housing Affordable Foreclosure Alternatives Act or HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program.

HAFA provides streamlined short sale rules and incentives for borrowers and lenders to work together to avoid foreclosure. The rules — in effect between April 5, 2010, and Dec. 31, 2012 — will speed up the short sale process.

To be eligible for HAFA, homeowners must first apply for a loan modification through the Home Affordable Modification Program, or HAMP. Owners who do not qualify for a loan modification or miss payments during the initial loan modification period qualify for HAFA.

HAFA requirements include:

  • Property must be a principal residence.
  • Mortgage must be originated before Jan. 1, 2009.
  • Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The borrower is delinquent or default is foreseeable.
  • The Homeowner demonstrates a hardship.
  • The Borrower’s total monthly housing payment must exceed 31 percent of gross income.
  • The unpaid principal balance must not exceed $729,750.

Because I work for a title company, I have the honor of working with some of the best Realtors in Arizona. If you are an Arizona homeowner and are considering a short sale please contact me for a referral to a CDPE (Certified Distressed Property Expert) Realtor that specializes in short sales. Thank you.

For All Your Markeing, Escrow and Title Needs


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SMUrcle. The How To Get Business With Social Media

Tuesday, February 23rd, 2010

SMUrcle

You’ve heard all the statistics before “There are over 400 Million people on Facebook”, “Over 10,000 people are joining Twitter every day”, “12% of people have blogs” on and on and on.  You have also most likely attended a class on Facebook or Twitter in the last year, maybe the instructor you had was rookie enough to try and explain them both in the same class.  Regardless of how many classes you have attended about social media, you most likely left feeling like you were trying to drink out of a firehose and the class likely focused on WHY you should be using  social media.  What about the HOW?

There is just so much to learn and lets face it, you have so little time.  You are out listing and selling properties! Not that time is the only challenge you have….Do you actually know anyone that is getting leads or closing deals because of Social Media?  Probably not.  Lets face it, there is really  no incentive for a competing Realtor or loan officer to show you how to generate leads using social media.  Remember the old saying “teach the man to fish or give the man a fish?”

Introducing SMUrcle.

What Is SMUrcle?

Social. Media. University. rcle.

In a world where everyone wants to talk about the WHY, SMUrcle is the HOW.

How to implement Facebook and your Blog
How to Blog for business
How to implement Twitter in your business.
How to syndicate your content
How to write content
How to write to rank in Google and Bing and much more.
SMUrcle is How to DO.

You already know that you should be using facebook and facebook fanpages, and twitter, and YouTube and Vidler and RSS feeds and landing pages and blogs and widgets and well you get the point…. you know you should be using these tools to generate business but you may not know HOW.

SMUrcle is a 4-6 week series taught by industry professionals that ARE getting leads and ARE closing deals using social media.  SMUrcle consists of professional bloggers- some outside of the real estate industry, SEO professionals, custom website/blog designers, Realtors, Loan Officers and a title rep (guess who that is).  SMUrcle is a series of 1 hour classes that address the HOW.  You bring your laptop and you learn HOW.   The best part, It’s FREE. (that’s the #1 trigger word….we will address that too)

SMUrcle classes start in March 2010.  Visit SMUrcle.com to

  • Ask questions about our classes,
  • Find out about our instructors,
  • Learn more about our technology references,
  • Schedule a private class for your brokerage, or
  • Just tell what kind of job we’re doing getting the word out about Social Media and RE classes.

For All Your Marketing Escrow and Title Needs

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Posted in Education, Inbound Marketing, Marketing | 1 Comment »

HAMP-Housing Affordable Mortgage Program-January 2010 Results

Thursday, February 18th, 2010

The Home Affordable Modification Program or HAMP allows for loan modifications for those that can no longer afford to make their monthly mortgage payments. You may qualify for a loan modification under HAMP to make your payments more affordable. Millions of borrowers who are current, but are having difficulty making their payments and borrowers who have already missed one or more payments may be eligible. Under HAMP the borrower must answer these 5 questions:

HAMP

“The Home Affordable Modification Program site then helps to determine if you are eligible, but only the servicer of the loan can tell you if you qualify. To qualify, you will generally need to show that you have adequate income to make the reduced payments on an ongoing basis and that modification is an appropriate option given the characteristics of your mortgage and the value of your home.”

Servicer Performance Report Through January 2010

Mortgage servicers have recently increased efforts to change trial modifications to permanent status under the Obama administration’s Home Affordable Modification Program (HAMP), nearly doubling the number in just over one month.

The U.S. Treasury released it’s January report on Wednesday that showed 116,297 homeowners were in permanent modifications as of the end of January 2010.

76,482 more have received offers for a permanent restructuring. The Treasury said the data “marked record progress.” January marked the first time that the pace of permanent conversions exceeded that of new trials – most likely proof of intense pressure placed on the servicers by the Obama administration over the last few months to increase permanent modifications.

From December to January, Permanent modifications jumped 75 percent. During the same period new trials rose by about 9 percent. To date there has been nearly 1.3 million trial modification offers extended to struggling homeowners since the program began almost a year ago, Treasury officials say HAMP is on pace to meet its goal of helping three to four million borrowers hang on to their homes by the end of 2012.

The Treasury department estimates there are 5.6 million homeowners who are currently 60 days behind on their payments.  1.7 million of them are eligible for assistance through HAMP, according to the Treasury’s figures. The number of HAMP-eligible homeowners is expected to grow over the next three years, officials said, as delinquencies increase.

The January Treasury report shows that 60,476 trial modifications have been canceled, and 1,005 permanent modifications have been terminated, an indication the borrower may have failed to stay current on the new payment

Modification Results

According to the January report, the monthly payment reduction for borrowers enrolled in the program is $522.  According to the administration, 100 percent of the permanent modifications have reduced the interest rate, 42 percent have extended the loan term, and 27 percent have included principal reduction.

As of the end of January, CitiMortgage and GMAC Mortgage have provided modifications to 50 percent of their eligible borrowers. Citi has converted 10,929 modifications to permanent status. GMAC has converted 11,494 of its home loans to permanent status as well. Saxon Mortgage Servicing has 48 percent of its eligible borrowers in a trial or permanent modification, completing 5,312 permanent modifications.

JPMorgan has made 11,581 modifications permanent, and has 17,959 pending. Wells Fargo has completed the most permanent conversions, with 17,652. Bank of America has put 22 percent of its eligible borrowers into modifications and made 12,761 permanent.

What do you think….Does HAMP go far enough to save struggling homeowners?

For All Your Marketing, Escrow and Title Needs

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Stephen Garner
Phone: 480-223-8113
Fax: 480-892-2680