Pam Marron Home Lending

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Keep up with the latest news about short sales…

Completed HAFA short sales pass 10,000 through June/August 8, 2011/Jon Prior/HousingWire.com

“The growing problem in Florida is the alarming increase in the number of short sale listings that are coming onto the market. These people are still employed but severely underwater and are having to short sale because they are not able to pay the vast difference owed between the mortgage amount and the value of these homes,” Marron said. “Banks are requiring homeowners to default in order to qualify for the short sale.”

Appreciation is key to loan revision plan/ August 7, 2011/ Kenneth R. Harney/Special to the St Petersburg Times

One company says: Modify these borrowers’ loans so that their payments are reduced to a manageable amount, cut their principal debt over time but make the deal totally dependent on their scrupulous on-time monthly payments of the new amount — plus sharing of a portion of any future profits they make on the house sale.

Options for “Underwater” Mortgage Holders/ August 1, 2011/Jean Shrem

Loan Value Group’s Frank Palotta Addresses 2011 CoreLogic Risk Summit/ 

August 1, 2011/Business Wire

With approximately 11 million homeowners underwater on their mortgages, the industry must begin to focus on the homeowners’ negative equity before the strategic default crisis worsens, says Frank Pallotta, EVP and a Managing Partner at Loan Value Group.

Pallotta, speaking today on a panel at the 2011 CoreLogic Risk Summit on Navigating Market Uncertainty Profitably, said, “The mortgage industry’s exclusive focus on delinquent borrowers ignores the growing tendency of current loans going delinquent as well as extremely high re-default rates. An incentive-based program designed to reward homeowners for staying current while addressing negative equity can positively impact a homeowner’s behavior and willingness to avoid default overall. But to achieve this, we need to be mindful of both the homeowner’s personal balance sheet as well as their income statement.”

Ocwen Offering Motgage Modifications that Restore Equity for Underwater Borrowers but let Loan Investors Share in Appreciation When Market Recovers/July 26, 2011/ Globe Newswire

Servicer’s SAM Program Addresses Dual Problem of Higher Defaults Among Underwater Borrowers and Risk of Rewarding Delinquency; Borrowers Have Financial Incentive to Stay Current, Yet Must Share Market Upside With Loan Investors

Moody’s Sees Risk of Strategic Default Rising in Low-Risk Areas/ July 18,2011/ Carrie Bay, DSNews.com 

The real victims of strategic default/July 25, 2011/Tara-Nicholle Nelson/Inman News

From Deadbeats to a Target Market: Why Advertisers Are Going After Strategic Defaulters/July 25, 2011/Tara-Nicholle Nelson/TIME Moneyland

…More importantly, to the extent anyone is targeting these folks, it should be their own mortgage lenders, targeting them for modifications and principal writedowns. Studies show homeowners would rather stay than walk away, even when a home carries significant negative equity. But they feel forced to walk away when increasing negative equity collides with bank inflexibility.

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