MLS-2.com

Are Loan Modifications a Salvation for Former Mortgage Brokers?

The author Bill Zielinski is not on the LoanMod dot com payroll, but the first commentor is. All of her comments (viewable by clicking her name) are for the company. That said, we like (& refer to) ModifyMeDown.com.

They (Modify Me Down) do charge for their services, with an up front deposit required (remember, these clients are not the best credit risk!), and they perform a real service. They should be paid, as the cost of failure when the consumer attempts it themselves, is high.

Good modification companies, regardless of their founder's backgrounds, should be able to help consumers navigate the treacherous underworld of the lenders and servicers, whose main goal is the collect (however shady) the last dollar out of the borrower before foreclosing.

And Bill, it would be great to hear the winning business model. Perhaps it's in your other blog...

Arbitrage Opportunities in Mortgage and Municipal Markets

There is something there, but be sure to account for closing costs on a new loan if that is required to get started (taking cash out of your home equity line of credit may not be at such advantageous rates), and also the higher rate on a cash out refinance (rates widely quoted are for no cash out).

Fannie Mae: Beyond Economical Repair?

What is it about these GSEs that make us want to use plane analogies?!

I wrote this last month about Freddie Mac on the MLS-2 Blog
( blog.mls-2.com/2007/11.../ )

"FNHMC, the number two residential mortgage lender and sanctioned by the government, reported a huge Q3 loss and said they would need to raise additional operating capital. Speculations on that number ranged upwards of $6 Billion! See this blog post on Seeking Alpha for more on the capital infusion.

Freddie Mac stock plummeted 29% Tuesday, dragging down Fannie Mae also 25%, and causing Countrywide to be the bankruptcy talk of the day (again).

This development is huge. Many expect Fannie Mae to report similar losses & problems. Fannie & Freddie were supposed to be our ticket out of this mess, at least in part or at least temporarily…

Well, not only is the ticket no good, but the plane just caught fire sitting at the gate!"

Credit Problems Delayed are Not Credit Problems Solved

They likely need to do a short sale on their home, as it's likely underwater, and they've gotten poor info about that. (They may think they have to make up the shortfall or pay taxes on it - which they may...)

But the credit card strategy is doing the same thing! Everyone in this situation needs to 1) take their medicine, and 2) take it sooner rather than later! Sell the "house", and look for a better "home".

Patrick Boyle

New Home Sales: Look at Bigger Picture, Mortgage Applications

New mortgage applications may not translate into home sales (no one believes they do), but they do indicate any of the following:

1) buyers are readying themselves to buy, signaling we're near a bottom

2) refinancers are improving their cash flow or taking cash out of their homes, which will keep spending up, indirectly adding to David's point

3) refinancers are swapping out of the "bad loans" the analysts fear will add so much more inventory to the market if they can't refi and they have to sell. It can also mean home equity still exists, providing buffers all around.

Patrick Boyle, Market Tracker for