Stop Foreclosure, Short Sale Los Angeles

$75 Billion lifeline to homeowners

$75 Billion lifeline to homeowners

The big lenders have waited to see what President Obama rolled out today as a life preserver to help the 10,000 American going into foreclosure each day. This life preserver is to help the millions more that are barely getting by. Although lenders have stepped up to help homeowners in this market, they have not been able to keep up with the flood of default loans.

More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, and analyst say that number can soar as high as 10 million in the coming years, depending on the severity of the recession.

Fannie Mae, Freddie Mac, JP Morgan Chase, Morgan Stanley and bank of America are halting foreclosures through March 6. Citigroup said they would extend their halt through March 12 or until the administration has completed the details of the loan modification program, whichever is earlier.  The banks pledges apply to owner occupied homes not those owned by investors.

Freddie Mac and Fannie Mae guarantee half of the home loans in America, their evictions and foreclosure have been halted through the holidays. The government is pledging $400 billion to these two giants in an effort to refinance “under water” loans.

The plan that President Obama revealed today ($25 billion more than initially anticipated) is earmarked to help 9 million homeowners from being evicted and to stabilize the housing market which is at the core of the ever-worsening U.S. recession.

There are a lot of incentives for lenders to work with borrowers, although it is of my opinion that this band aid will simply ease the economical conditions which really needs to ride this out. Although these funds should help many homeowners there are going to be plenty that won’t be able to take advantage of this as it simply is not enough.

Debt Collectors and Lenders Settling for less

Debt Collectors and Lenders Settling for less

Times are tough for all right now consumers face foreclosure, the wise will short sale their home and the credit card companies are in as much of a tough position as many consumers. Faced with borrowers who are unable to pay back their debt, some collectors are settling for less then the balance owed just so they can get anything they can.

In an effort to protect themselves as best they can, lenders and credit card companies are vying for the top position for who will get paid first as they prepare for a wave of defaults in the first half of 2009.

In a time when banks cut consumer credit lines, raise card fees, and pull back on lending, some banks like B of A are waiving late fees, lowered interest charges and in some cases reduced loan balances for more than 700,000 credit card holders in 2008.

American Express and Chase are taking similar actions as consumers fall behind on their bills. Every major credit card company is giving their collection agents more leeway for consumers in financial distress.

Debt collectors, who are typically paid on the amount of money they recover, have reported a double in the number of people getting extensions in the last six months. In some cases consumers are being able to discount their debt between 20 and 70 percent.

Credit card lenders are preparing to write off $395 billion dollars of soured loans over the next five years according to projections from the Nilson Report. Compare that to the $275 billion in the last five years!

In the past credit card companies relied on consumers taping into their home equity to pay down credit card debt, now that source has dried up and they are taking what they can.