TraderMark

The Real Reason So Many Home Loan Modifications Fail

Loan Survivor I just found this data on Bloomberg - so it begs the question what shall you have us do with people who are unemployed, not living in homes or already with payments at below 31% of income? Just hand out free money?

www.bloomberg.com/apps...

While the Treasury has identified more than 3.2 million loans as eligible for HAMP, lenders are finding that far fewer qualify based on their criteria. At Bank of America, which accounts for almost a third of the loans targeted by the program, 55 percent of borrowers aren’t eligible because they are unemployed, don’t live in the home or their mortgage payment is less than 31 percent of gross monthly income, Schakett said.


On Dec 07 10:11 AM Loan Survivor wrote:

> Mark,
>
> you bring up some valid points, but you also ignore some very obvious
> ones. Take a look at this post I did on Bank of America, referencing
> their own published numbers: drewsmortgagenews.blog....
>
>
> If you read BOA's propaganda, they'd have you believe loan mods aren't
> working because borrowers are not doing what they're supposed to.
> WRONG!
>
> This makes Chase's propaganda all the more suspect, but you buy into
> it hook, line & sinker - instead of investigating for yourself.
>
>
> Also, go to this site that Wells Fargo owns and read some of the
> frustration homeowners experience in trying to follow the fed requirements
> and obtain loan mods: blog.wellsfargo.com/wa...
>
>
> Your reference to the December article about more than 50% of loan
> mods failing, neglects to mention that less than 23% of the mods
> in the report resulted in a lowering of payments. Hmmm, how intelligent
> of banks - raise payments on those that can't afford the original
> payment, then report the loan mod didn't work! Read the truth about
> this suspect Fed Reserve Bank of Boston study at: drewsmortgagenews.blog...
>
>
> Mark, you're an excellent writer and I do respect your opinions on
> most things. But, I cannot believe you so recklessly buy into what
> the banks report on loan mods - especially when even the fed gov
> keeps stepping up pressure on them to do a better job of execution.
>
>
> I'm still not sold on the whole idea of loan mods being the correct
> path to address the housing crisis. Maybe homeonwers that screwed
> up should all just be foreclosed on. If that's the case though,
> too-big-to-fail banks should have also been allowed to fail. Since
> we started down the path of bailouts though, it's discriminatory
> to bail out Wall Street, allow them to still pay outrageous bonuses
> (Goldman Sachs), yet do nothing for taxpayers bearing the cost of
> it all.
>
> I'd like to see you post something to validate that line of thought...

The Real Reason So Many Home Loan Modifications Fail

Exactly Teresa.

I hate the whole concept of paying anyone off, but if we are going to waste money why not direct it to those who behaved well.

Anyhow it's only money. No one seems to care so just put it on the deficit. In fact I am unclear why the government has not paid off everyone's mortgage - with the trillions spent in rescue I must assume every mortgage under $300K could of been 50%+ paid off ...


On Dec 07 11:14 AM TeresaE wrote:

> The banks are being paid (bonused) to do modifications and from anecdotal
> industry (both real estate and banking) information, the Big 3 are
> nearly impossible to deal with at any price. But, no matter what,
> they get paid and end up with the asset.
>
> What ticks me off is that the "modifications" are only for those
> that have proven they are deadbeats already - by missing payments.
>
>
> If your income has tanked (small business owners everywhere would
> understand this) and your housing price has collapsed and you have
> never missed a payment - there is no help for you.
>
> If you bought a house you couldn't afford (all in the hopes of a
> cheap future refi) and then have blown your house payments on drugs,
> gambling or credit card payments, THEN you get help.
>
> Once again: punish those that do the right thing, reward the elite
> (banksters) and gift to the lazy and corrupted.
>
> Ah, I see a great big recovery in our cold, dark, pill fueled futures.
>
>
> And yes Mark, if trillions of dollars and thousands of government
> employees fail, the MOST obvious "fix" is to spend more and add more
> paid-for-life bodies. Works every time. [/sarcasm]

The Real Reason So Many Home Loan Modifications Fail

re: banks

if you go to my blog and search on the term 'oligarch' you will see many rants on the banks trust me. There is blame to be put in every direction. But now we have a system where the banks are enjoying fruits of largesse and the people most directly benefiting are those who did the stupidest things.

How about a bailout for the responsible? How about a mortgage modification for every person who has not been late once in 5 years? Cut their payment by 1/3rd?

Then with that extra money they responsible could go buy the foreclosed homes in America and rent them out. Wouldnt that reward good behavior rather than bad?

I am sure there are flaws with what I am offering but you get the drift.
On Dec 07 10:11 AM Loan Survivor wrote:

> Mark,
>
> you bring up some valid points, but you also ignore some very obvious
> ones. Take a look at this post I did on Bank of America, referencing
> their own published numbers: drewsmortgagenews.blog....
>
>
> If you read BOA's propaganda, they'd have you believe loan mods aren't
> working because borrowers are not doing what they're supposed to.
> WRONG!
>
> This makes Chase's propaganda all the more suspect, but you buy into
> it hook, line & sinker - instead of investigating for yourself.
>
>
> Also, go to this site that Wells Fargo owns and read some of the
> frustration homeowners experience in trying to follow the fed requirements
> and obtain loan mods: blog.wellsfargo.com/wa...
>
>
> Your reference to the December article about more than 50% of loan
> mods failing, neglects to mention that less than 23% of the mods
> in the report resulted in a lowering of payments. Hmmm, how intelligent
> of banks - raise payments on those that can't afford the original
> payment, then report the loan mod didn't work! Read the truth about
> this suspect Fed Reserve Bank of Boston study at: drewsmortgagenews.blog...
>
>
> Mark, you're an excellent writer and I do respect your opinions on
> most things. But, I cannot believe you so recklessly buy into what
> the banks report on loan mods - especially when even the fed gov
> keeps stepping up pressure on them to do a better job of execution.
>
>
> I'm still not sold on the whole idea of loan mods being the correct
> path to address the housing crisis. Maybe homeonwers that screwed
> up should all just be foreclosed on. If that's the case though,
> too-big-to-fail banks should have also been allowed to fail. Since
> we started down the path of bailouts though, it's discriminatory
> to bail out Wall Street, allow them to still pay outrageous bonuses
> (Goldman Sachs), yet do nothing for taxpayers bearing the cost of
> it all.
>
> I'd like to see you post something to validate that line of thought...

The Real Reason So Many Home Loan Modifications Fail

In a piece on Diana Olick's blog (CNBC) she says the average Citigroup mod is a payment reduction of 34%

I assume Chase has similar numbers as does BAC as does Wells

So if the average loan mod is reducing the payment by 1/3rd what is the excuse of 1/4 not making 1 payment?

or 1 in 2 not making 3 payments?

I understand some proportion of people are stymied by the banks - I have no question about that. Also i find it stupid that if we are going to waste money that people have to literally fall behind on their mortgage to get help...talk about a stupid way to get people to falter on mortgages.

But what is the excuse for the people who did get the mods? Maybe the program I referenced a year ago did not cut payments enough but this one did cut payments by (again using Citi data just released last week) 1/3rd on average.

There is no excuse in my book. What you are talking about in terms of people not being able to get into these mods is a whole different discussion. Here are swathes of people who were modified, and if average is 34%, that means some got 25%, some got 45%, yet they fail this broadly?


On Dec 07 10:11 AM Loan Survivor wrote:

> Mark,
>
> you bring up some valid points, but you also ignore some very obvious
> ones. Take a look at this post I did on Bank of America, referencing
> their own published numbers: drewsmortgagenews.blog....
>
>
> If you read BOA's propaganda, they'd have you believe loan mods aren't
> working because borrowers are not doing what they're supposed to.
> WRONG!
>
> This makes Chase's propaganda all the more suspect, but you buy into
> it hook, line & sinker - instead of investigating for yourself.
>
>
> Also, go to this site that Wells Fargo owns and read some of the
> frustration homeowners experience in trying to follow the fed requirements
> and obtain loan mods: blog.wellsfargo.com/wa...
>
>
> Your reference to the December article about more than 50% of loan
> mods failing, neglects to mention that less than 23% of the mods
> in the report resulted in a lowering of payments. Hmmm, how intelligent
> of banks - raise payments on those that can't afford the original
> payment, then report the loan mod didn't work! Read the truth about
> this suspect Fed Reserve Bank of Boston study at: drewsmortgagenews.blog...
>
>
> Mark, you're an excellent writer and I do respect your opinions on
> most things. But, I cannot believe you so recklessly buy into what
> the banks report on loan mods - especially when even the fed gov
> keeps stepping up pressure on them to do a better job of execution.
>
>
> I'm still not sold on the whole idea of loan mods being the correct
> path to address the housing crisis. Maybe homeonwers that screwed
> up should all just be foreclosed on. If that's the case though,
> too-big-to-fail banks should have also been allowed to fail. Since
> we started down the path of bailouts though, it's discriminatory
> to bail out Wall Street, allow them to still pay outrageous bonuses
> (Goldman Sachs), yet do nothing for taxpayers bearing the cost of
> it all.
>
> I'd like to see you post something to validate that line of thought...

Government Payroll Data Is Good, TrimTabs Begs to Differ

careful with talk like that, you might be drafted into US federal government for a bevy of "great ideas" :)


On Dec 07 11:21 AM Davewmart wrote:

> The next shot in the locker of the US Government to 'prove' that
> the 'recovery' continues will likely be stolen from the UK playbook
> in the 80's recession.
> Start make work, or work experience programs 'to keep skill sets
> current' - then you only pay any unemployment to people who take
> part in various time-wasting programs, pay them perhaps $5 a week
> more and magically reduce your unemployment numbers by whatever figure
> is needed.

Government Payroll Data Is Good, TrimTabs Begs to Differ

You must of missed the "off by 100% or greater" situation that happened in mid 2008.

The BLS estimates how many jobs are created by small businesses and there were times in 2008 they were saying 100K+ jobs were being added in small business via their "estimate". Even more incredulous as I sorted through the birth death model (which is there finger in the air guess) there were months they said construction jobs were being added. In the worst housing bust of our lives.

Garbage in, garbage out.


On Dec 07 10:16 AM inthemoney wrote:

> I am wondering how BLS could be wrong by 50% in both September and
> October and what suddenly changed in November to make them see the
> light?
> With 50% adjustment of the prior esitmates they lost whatever credibility
> they had left.

Government Payroll Data Is Good, TrimTabs Begs to Differ

ADP has generally been bad, but they made some changes in the past 6 months which supposedly is making it more accurate. I think they reported -169K last Wed.

My belief is the closer you are to companies the closer you get the truth. i.e. I could care less what government reports for "retails sales". Let me go listen to Walmart (1 in every 10 retail dollars in America) and Target, or Kohls, Sears, CVS et al to figure out what is happening in retail. Same for labor... hence an ISM report is closer to producers than government.

Further good computer systems should make much of this a moot point. Either we choose not to do that (despite countless hundreds of billions thrown at these departments) or are incapable of running systems that any major multinational has. Same with weekly jobless claims - we should know easily how many people have exhausted their benefits and are falling off the rolls, but we are not given that information. That should all be in those fancy computers.

But sometimes it is best to withhold reality from the peasants.


On Dec 07 07:27 AM berated wrote:

> Thx, Mark. To extend one of the themes in your post, it would be
> interesting to see a table comparing the various employment reports
> from the various orgs that report them (eg, BLS, TT, ADP, Monster,
> et al) over the last few years to gauge the variance among them and
> their respective accuracy (although how can you tell who's really
> most accurate?).

Government Payroll Data Is Good, TrimTabs Begs to Differ

So are you implying building economic models that are often wrong by 20-100%+ is not a skilled job? I am sure the BLS would disagree with you ;) haha.


On Dec 07 05:20 AM chris coonan wrote:

> Not only are the numbers incorrect, but there is a horrible trend
> happening in that the US is losing Skilled Jobs and that Skilled
> Workers are forced to take Unskilled Positions just to make ends
> meet.
>
> A better idea going forward would be to eliminate the BLS and use
> those funds for job creation elsewhere, like infrastructure projects.

As the Dollar Rises and Gold Falls, Should We Get Ready for Fed Rate Hikes?

Thankfully it is not like the peasants of the US are forced to import anything or they might get hammered by this weak dollar policy ;)


On Dec 06 04:20 PM ebworthen wrote:

> Reason for FED to raise rates: maybe strengthen the dollar
>
> Reason for FED not to raise rates: keep residential and commercial
> real estate from hemorrhaging again, let inflation ensue to reduce
> debt, make politicians happy, prevent Great Depression II (in Bernanke's
> mind anyway), allow those who can get home equity or other loans
> to take them out and spend money on stuff, keep the dollar weak to
> increase the cost of imports and decrease the cost of what U.S. exports
> there are.

Just Don't Call It a Stimulus

I agree with you. And yes your are correct about 5%. It's a sham and the fact they are using the exact same talking points for this "job creation" bill that they were using a year ago (infrastructure! green energy!) is so laughable. But here we are again.

I'd expect another in about 12 months.


On Dec 06 10:43 AM Valley Boy wrote:

> Most of the hype about the stimulus package early this year centered
> on the public infrastructure and energy modernization aspects. But
> those two factors only constituted about five percent of the total
> expenditures according to the government website www.recovery.gov.
> And it turned out that many of the infrastructure projects were not
> "shovel ready" but were only in the planning stage.
> The stimulus package definitely needs an overhaul. It should be biased
> in favor of true "shovel ready" projects, small business tax relief
> and servicing public debt.

Prepare for more Half Truths Tomorrow on Unemployment

to be fair we do this every 10 years, no matter what the economy. But it will be a nice way to pump up the data in 2010 and heck it might even be used as an example of "4 million jobs we saved or created". Numbers tend to get jumbled when you spin a pack of lies ;)


On Dec 04 02:22 PM tripleblack wrote:

> Goody. Just what we need, more government temp jobs. This isn't "...growth
> in the Garden", to extend the overstretched analogy, but "...weeds".
> Temporary weeds, though.
>
> But will we have a million, or just 100,000 ACORN execs that get
> paid 10 times?

SmartHeat: Another Great Growth Story from China

YONG I just discovered last week

SEED and FEED are your prototypical momentum stocks - whenever agriculture stocks go in favor, daytraders run to these guys. One of them (I forget which) specializes in sheep semen... yes seriously; I think FEED.

Similar to HEAT, nothing proprietary but they can benefit from same trends of rising tide lifts all boats. I have not seriously looked at either of those names in at least 18 months.

agree with you on stock symbols. They know Americans love branding!


On Dec 04 03:39 PM William M. Wright wrote:

> Glen Fry, the HEAT IS ON...oh....ya....how about some more old Miami
> Vice tunes!
>
> RINO, doubled in the last three months.
>
> Yes, add YONG, FEED, and SEED, to your China list. The Communist
> know how to pick great USA symbols....FEED....SEED. SEED has already
> exploded up. Any views on FEED?

SmartHeat: Another Great Growth Story from China

As I wrote in the piece there is nothing proprietary or wide moat to the business; you are basically playing a modernization theme.

What is the presence of those companies you named in China? It really does not matter if they have 10x better product if they are not allowed in the country. Almost everything done in China is via joint venture if from a foreign entity... actually its not almost, it is always. And protection of home companies is high.


On Dec 04 05:26 PM User 496629 wrote:

> HEAT is nothing more than a momentum/pump&... play. There are
> far better companies that have better products, better distribution,
> a broader and more stable customer base and alot of historical performance
> which are equally poised to prosper in China -- look at Alfa Laval
> [ALFA.omx], SPX Corp. [SPW.nyse] for PHE products and Badger Meter,
> Inc. [BMI.nyse] for smart meters. A "heat meter" is nothing more
> than a thermostat/thermometer. All that HEAT has going for it is
> that FIDO published in September that they were a big buyer, but
> there is no way of telling if they even still own it.

Did Weekly Jobless Claims Really Fall Below 500k?

Here are hours worked mid year below; I've stopped tracking it of late since its just ping ponging back and forth)

(source: myself ->> www.fundmymutualfund.c... )

1.33.1 hours (July)
2.33.0 hours
3.33.1 hours (May)
4.33.2 hours
5.33.2 hours (March)


On Dec 04 01:54 PM speeddaimon wrote:

> Hey TM,
>
> Not that I am arguing with you about the dire state of our economy,
> but what is your/ Trim Tab's take on the average hours worked increasing?
> I would imagine that number would be harder to fudge?

SmartHeat: Another Great Growth Story from China

Wow this guy dropped $3 today almost to the 20 day moving average. did not expect that or might have tried to snag it.