PERSONAL VIEWS by MAHER SOLIMAN
for Immediate Released April 15th 2008// Los Anglels, CA
NLS & BORROWERHOTLINE.COM
THE SECTOR AND BEARISH VIEWS
I take great pride in knonwing I sat out the 36 month leading to the end of th e sub prime madness. My views are offered as an inustry analyst for NLS Advisors and 20 year secondary underwriter who sat out the last 5 years. Then , i was candid about the enevitable as I am now in hindsight. My view was explained over again to earnngs driven fund managers and the capital markets derivatives traders, who also were growing in skeptimism. Sub prime securities and orginations volume, perfroamnce and ample liquidity - - -cannot last.
No chance this deal would sustain itself beyond Q3 06. You see, there was so much capital committed to the “beast” called ABS, MBA when the market commenced to flatten out by 4th quarter 06. The market sector breadth and depth measured by originations (receivables) offset by asset impairment were unacceptable. But it was somewhat manageable and within the algorithmic tolerances for a worst case scenario pursuant to over collateralization and defaults.
Therein, you had a run in home sales activitiy and artifically stimulated refiances over the next 18 months consisting of this pain staking and exhausting attempt to resurrect a dead market.
Again, the push for stimulating originations was pursuant to commitments totaling billions of dollars for delivery of future mortgage pools needed to fulfill demand for asset back‘s (securities) Home sales were flat and rates unable to generate any interest. You have a dead market.
According to web site www. bororwerhotline.com, a consumer advocacy for Predatory lending, Wall Street is the culprit or mastermind. It was mortgage banking and commercial banks who carried out their orders. Wall Street securities and investment houses were releasing bulletin after bulletin and credit program matrix advisements as to new “LOWER” credit standards to qualify high risk borrowers and that lead to a sudden downward ratcheting for layered risk.
The phenomena were derelict in accordance with ensuring minimum thresholds for integrity and establishing any level of quality earnings from future securities income streams. In translation, what that all means is you now could grant credit acceptance to a immigrant part time maid, a 21 year old Gardner, a shoe salesman and other county employees who fit the $20,000 a month profile using no verification “Stated Income Stated Assets” borrower profiles. Each of the professions I just mentioned play a necessary role in our economy but these wage earners are easy to scale along a profession and education earnings spectrum. And now the dream offered to them is no longer there as they cannot afford these $600 to $850K homes they acquired at 100% financing using shadow income.
They are not the blame but the victims. But the ability of the street to use the bottom scale of labor and blue collar sector of the economy is insane but did in fact support resurgence in housing activity 18 months longer than expected. These comments are made in reference to home sales activity and maintaining volume originations. But, somehow I just don’t get why the likes of Countrywide’s, Wells and WaMu’s went along with it. By Soliman M. // Mortgage Securities Analyst www.borrowerhotline.com
POLITICS AND MORTGAGE CRISIS
The mortgage discussion by McCain loses much credibility for the man. No way can FHA, HUD The Fed or even a reunion of MASH figure out a way to bail this mess out? Housing will not come into line with a stable market until every American can own the home they currently are in. therefore prices will continue to plummet and mortgagors will lose out as foreclosures skyrocket. It’s called a flush out or carving up of the piece of the market that lacked integrity and never could be sustained under any type of rational modeling.
Thank Wall Street for your No Income No Asset Just Make something Up No verification 100% the loan that tacks on the added interest and principal to the balance of the loan….the program that made no sense…remember? According to Maher Soliman, an analyst with www.borrowerhotline.com unfortunately, the horizon is not bright with so many American homeowner casualties from delinquency and foreclosures, lender REO’s and plummeting banks earnings and dropping share prices. Great for election year politicking however. Well, McCain, the Street did give American’s a shot at the dream … owning a $ million dollar first home. Even if it was only for a short brief glimpse …that is before facing these homeowners’ face foreclosure, and lender harassment, the burden of threats of deficiency losses taxed as ordinary income and other forms of humiliation.
So, outside of private sector incentives for getting involved, McCain should really let this deal sort itself out.
Saturday, April 19, 2008
Lender's Beware of Typed Final (1003) Applications
Lenders Beware of Typed Final (1003) Applications is correct and not intended as a cute into to another boring secondary mortgage loan article. This in my opinion is the one thing Lender's often will do, but legally cannot, when making a loan.
It's true that over 80% of all loans fall into the category of typed, well, computer generated loan applications.Problem: And half of the 80% (homeowners’) could get out of their loan, receive back a refund of points and fees or even have their loan in cut in half as a settlement.
Here’s why -
Because anything that is misstated on the borrower application is unlawful. Really, and subject to criminal punishment. But the lender is at an advantage and has a fiduciary responsibility to the borrower. This is given when considering the expertise and sophistication need for making a loan.At borrowerhotline.com, we see countless complaints by borrowers who cannot afford their loans.
And this argument about handwritten versus an inintial and final computer genreated application is so true, especially when the borrowers are not in budget. You see cops and school teachers making $10,000 to $25,000 month. (not to say they don't deserve it....but come on).
Now, without a handwritten application, how can you hold the borrower to the argument that it’s they who lied and the lenders was just doing their job? Borrower is not telling the truth, huh!
Then show me the handwritten application monsieur lender.
By the way, does and underwriter or quality control person ever check salary web sites for average earnings for professions?
If you have a grievance with a lender, and did not complete a handwritten 1003 application - - - then call us for more information. We are http://www.borrowerhotline.com/ 925-550-1826
It's true that over 80% of all loans fall into the category of typed, well, computer generated loan applications.Problem: And half of the 80% (homeowners’) could get out of their loan, receive back a refund of points and fees or even have their loan in cut in half as a settlement.
Here’s why -
Because anything that is misstated on the borrower application is unlawful. Really, and subject to criminal punishment. But the lender is at an advantage and has a fiduciary responsibility to the borrower. This is given when considering the expertise and sophistication need for making a loan.At borrowerhotline.com, we see countless complaints by borrowers who cannot afford their loans.
And this argument about handwritten versus an inintial and final computer genreated application is so true, especially when the borrowers are not in budget. You see cops and school teachers making $10,000 to $25,000 month. (not to say they don't deserve it....but come on).
Now, without a handwritten application, how can you hold the borrower to the argument that it’s they who lied and the lenders was just doing their job? Borrower is not telling the truth, huh!
Then show me the handwritten application monsieur lender.
By the way, does and underwriter or quality control person ever check salary web sites for average earnings for professions?
If you have a grievance with a lender, and did not complete a handwritten 1003 application - - - then call us for more information. We are http://www.borrowerhotline.com/ 925-550-1826
Thursday, March 20, 2008
US Now in the Grips of a Recession
Slowdown could have been avoided A well-respected economist says the U.S. is now in a recession...and that Congress and the Federal Reserve could have stopped it.
Courtesy, See all CNNMoney.com By Chris Isidore, CNNMoney.com senior writer/ Last Updated: March 20, 2008: 3:30 PM EDT
NEW YORK (CNNMoney.com) -- Congress and the Federal Reserve missed their chance to keep the country from falling into recession by acting too slowly, according to a well-respected economist.
Lakshman Achuthan, the managing director of the Economic Cycle Research Institute, said the economy has now fallen into what he calls "a recession of choice."
He argues that the economic stimulus package passed by Congress this year is too late to help many consumers and businesses and that the Federal Reserve was too timid when it started trimming interest rates last fall.
Since then the Fed has aggressively cut rates, most recently lowering them by three-quarters of a percentage point at its meeting Tuesday.
Financial pain hits close to home
"If they had done all this in the fourth quarter, I think we'd be having a different discussion," he said. "We might not have had Bear," he added, referring to the fire sale purchase of brokerage firm Bear Stearns (BSC, Fortune 500) by JPMorgan Chase (JPM, Fortune 500) that the Fed helped arrange over the weekend to avoid a collapse of Bear Stearns.
The ECRI, which forecasts a number of key economic readings such as employment, inflation and production from various business sectors, had been reluctant to join the rising tide of economists arguing that the economy has fallen into a recession. But it changed its call Thursday.
Achuthan said the tipping point for his firm's recession call was when its leading index for non-financial services, a sector of the economy that accounts for 62% of jobs, turned negative.
Although Achuthan said he saw weakness in the U.S. economy last fall, he did not make a recession forecast at that time because he thought it was possible the government could have done something then to prevent a recession.
Issue #1 - The $250 commute
He said low business inventories at the end of last year gave policymakers a chance to avoid the recession, because any spur to spending by businesses or consumers would have resulted in a quick pick-up in production.
"There was an opportunity that was wasted by policymakers because they didn't understand those dynamics," he said. "That is one aspect of how the policymakers have goofed and why this recession is a choice, not something that happened by bad luck and chance."
He added that the more decisive action taken so far this year by Congress and the Fed has come too late to stop the economy from falling into recession.
Congress passed a $190 billion economic stimulus package, but the biggest part of that legislation - tax refunds of about $600 per taxpayer, won't be in the hands of consumers until May at the earliest.
"It was a good idea that was horribly executed," he said. "Policymakers said time was of the essence. Unfortunately, they didn't understand what that really meant. They just do not understand how the business cycle works; it is not going to wait around for stimulus some months down the road.
Issue #1: America's Money
And while the Fed has slashed interest rates by a total of two full percentage points at meetings in January and March, its initial cuts in September, October and December last year totaled only one percentage point.
Achuthan's forecast comes on a day that some other readings show the economy possibly heading into recession.
The Conference Board's index of leading economic indicators fell 0.3% in February, and its January reading was revised lower. The latest report is the fifth straight month the indicator has fallen, the first time that has happened since 2001, the year of the last recession. A prolonged decline in this index typically signals a recession.
In addition, the latest weekly reading on initial jobless claims rose sharply, pointing to an increased likelihood that March will be the third straight month of job losses for the U.S. economy.
Issue #1 - America's Money: All this week at 12 pm ET, CNN explains how the weakening economy affects you. Full coverage.
Have you lost your job, your business or your home? Are you raiding retirement accounts to pay the bills? We want to hear from you. Tell us how you're being affected by the weakening economy and you could be profiled in an upcoming story. Send emails to realstories@cnnmoney.com.
First Published: March 20, 2008: 12:11 PM EDT
· Slowdown could have been avoided
· Mortgage rates fall, 1st time since February
· Financial pain hits close to home
· Brokers who lie, and more subprime nightmares
· Cash strapped, and driving less
Recession Watch 2008
· U.S. ready to act to calm markets - Paulson
· Bush tax cuts center stage in Congress
· Slower growth, but no recession - forecast
· Consumer confidence lowest on record
· House Democrats vow new push on economy
Courtesy, See all CNNMoney.com By Chris Isidore, CNNMoney.com senior writer/ Last Updated: March 20, 2008: 3:30 PM EDT
NEW YORK (CNNMoney.com) -- Congress and the Federal Reserve missed their chance to keep the country from falling into recession by acting too slowly, according to a well-respected economist.
Lakshman Achuthan, the managing director of the Economic Cycle Research Institute, said the economy has now fallen into what he calls "a recession of choice."
He argues that the economic stimulus package passed by Congress this year is too late to help many consumers and businesses and that the Federal Reserve was too timid when it started trimming interest rates last fall.
Since then the Fed has aggressively cut rates, most recently lowering them by three-quarters of a percentage point at its meeting Tuesday.
Financial pain hits close to home
"If they had done all this in the fourth quarter, I think we'd be having a different discussion," he said. "We might not have had Bear," he added, referring to the fire sale purchase of brokerage firm Bear Stearns (BSC, Fortune 500) by JPMorgan Chase (JPM, Fortune 500) that the Fed helped arrange over the weekend to avoid a collapse of Bear Stearns.
The ECRI, which forecasts a number of key economic readings such as employment, inflation and production from various business sectors, had been reluctant to join the rising tide of economists arguing that the economy has fallen into a recession. But it changed its call Thursday.
Achuthan said the tipping point for his firm's recession call was when its leading index for non-financial services, a sector of the economy that accounts for 62% of jobs, turned negative.
Although Achuthan said he saw weakness in the U.S. economy last fall, he did not make a recession forecast at that time because he thought it was possible the government could have done something then to prevent a recession.
Issue #1 - The $250 commute
He said low business inventories at the end of last year gave policymakers a chance to avoid the recession, because any spur to spending by businesses or consumers would have resulted in a quick pick-up in production.
"There was an opportunity that was wasted by policymakers because they didn't understand those dynamics," he said. "That is one aspect of how the policymakers have goofed and why this recession is a choice, not something that happened by bad luck and chance."
He added that the more decisive action taken so far this year by Congress and the Fed has come too late to stop the economy from falling into recession.
Congress passed a $190 billion economic stimulus package, but the biggest part of that legislation - tax refunds of about $600 per taxpayer, won't be in the hands of consumers until May at the earliest.
"It was a good idea that was horribly executed," he said. "Policymakers said time was of the essence. Unfortunately, they didn't understand what that really meant. They just do not understand how the business cycle works; it is not going to wait around for stimulus some months down the road.
Issue #1: America's Money
And while the Fed has slashed interest rates by a total of two full percentage points at meetings in January and March, its initial cuts in September, October and December last year totaled only one percentage point.
Achuthan's forecast comes on a day that some other readings show the economy possibly heading into recession.
The Conference Board's index of leading economic indicators fell 0.3% in February, and its January reading was revised lower. The latest report is the fifth straight month the indicator has fallen, the first time that has happened since 2001, the year of the last recession. A prolonged decline in this index typically signals a recession.
In addition, the latest weekly reading on initial jobless claims rose sharply, pointing to an increased likelihood that March will be the third straight month of job losses for the U.S. economy.
Issue #1 - America's Money: All this week at 12 pm ET, CNN explains how the weakening economy affects you. Full coverage.
Have you lost your job, your business or your home? Are you raiding retirement accounts to pay the bills? We want to hear from you. Tell us how you're being affected by the weakening economy and you could be profiled in an upcoming story. Send emails to realstories@cnnmoney.com.
First Published: March 20, 2008: 12:11 PM EDT
· Slowdown could have been avoided
· Mortgage rates fall, 1st time since February
· Financial pain hits close to home
· Brokers who lie, and more subprime nightmares
· Cash strapped, and driving less
Recession Watch 2008
· U.S. ready to act to calm markets - Paulson
· Bush tax cuts center stage in Congress
· Slower growth, but no recession - forecast
· Consumer confidence lowest on record
· House Democrats vow new push on economy
Wednesday, March 19, 2008
IS THIS REALLY A RECESSION?
WWW.BORROWERHOTLINE.COM DONT BE AS VICTIME - FIGHT BACK AGAINST YOUR LENDER
Article By permission - Is the US is already in recession
(Excerpts from By JEANNINE AVERSA, AP Economics )
The fallout from a depressed housing market and a credit crunch nearly caused the economy to stall in the final three months of last year. Some experts, like the majority of people questioned in the poll, say the economy actually may be shrinking now. The worry is that consumers and businesses will hunker down further and pull back spending, sending the economy into a tailspin.
For many, the meltdown in the housing and mortgage markets has proved especially disturbing. Record numbers of people were forced from their homes, unable to afford the monthly loan payments. People watched their single biggest asset fall in value, a reason to tighten the belt.
"Obviously the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns," President Bush said in a television interview aired Sunday.
Credit has become harder to get, thwarting would-be home buyers, adding to the glut of unsold homes and aggravating the housing industry's woes.
For all of 2007, the economy grew by just 2.2 percent. That was the weakest performance since 2002, when the country was struggling to recover from the last recession. The housing collapse was the biggest culprit in 2007. Builders lowered spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.
The job market is faltering — a point driven home by a report showing that employers cut jobs in January for the first time in more than four years.
"The way things are, people are afraid of losing their jobs," Sanchez said.
Employment concerns are contributing to darker feelings about the economy and people's own financial well-being. Consumer confidence, as measured by the RBC Cash Index, dropped to a mark of 48.5 in early February. It was the worst reading since the index began in 2002.
A cooling job market along with high energy and food prices are taking a toll on paychecks. Workers' average weekly earnings, adjusted for inflation, fell 0.9 percent last year. In 2006, earnings grew by a solid 2.1 percent.
By one rough rule of thumb, a recession occurs when there are two consecutive quarters — six straight months — when the economy shrinks. That did not happen in the last recession, though. The economy contracted in the first quarter of 2001, turned positive in the second quarter, shrank in the third quarter and turned up again in the final quarter of that year.
The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November.
Bush, citing some experts, said the U.S. was not in a recession, although he acknowledged "that the signs are troubling enough" to justify the $168 billion economic rescue plan that passed Congress this past week. The measure he intends to sign on Wednesday includes tax rebates for people and tax breaks for businesses.
So if the poll figure of 61 percent is right — that the country is now in recession — then those relief efforts will help ease the effect of a downturn.
"People are both depressed and anxious about the state of affairs. The anxiety is going to persist because we are in an uncertain season economically and politically," said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Copyright © 2008 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press. Copyright © 2008 Yahoo! Inc. All rights reserved.Questions or CommentsPrivacy Policy -Terms of Service - Copyright/IP Policy - Ad Feedback
Article By permission - Is the US is already in recession
(Excerpts from By JEANNINE AVERSA, AP Economics )
The fallout from a depressed housing market and a credit crunch nearly caused the economy to stall in the final three months of last year. Some experts, like the majority of people questioned in the poll, say the economy actually may be shrinking now. The worry is that consumers and businesses will hunker down further and pull back spending, sending the economy into a tailspin.
For many, the meltdown in the housing and mortgage markets has proved especially disturbing. Record numbers of people were forced from their homes, unable to afford the monthly loan payments. People watched their single biggest asset fall in value, a reason to tighten the belt.
"Obviously the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns," President Bush said in a television interview aired Sunday.
Credit has become harder to get, thwarting would-be home buyers, adding to the glut of unsold homes and aggravating the housing industry's woes.
For all of 2007, the economy grew by just 2.2 percent. That was the weakest performance since 2002, when the country was struggling to recover from the last recession. The housing collapse was the biggest culprit in 2007. Builders lowered spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.
The job market is faltering — a point driven home by a report showing that employers cut jobs in January for the first time in more than four years.
"The way things are, people are afraid of losing their jobs," Sanchez said.
Employment concerns are contributing to darker feelings about the economy and people's own financial well-being. Consumer confidence, as measured by the RBC Cash Index, dropped to a mark of 48.5 in early February. It was the worst reading since the index began in 2002.
A cooling job market along with high energy and food prices are taking a toll on paychecks. Workers' average weekly earnings, adjusted for inflation, fell 0.9 percent last year. In 2006, earnings grew by a solid 2.1 percent.
By one rough rule of thumb, a recession occurs when there are two consecutive quarters — six straight months — when the economy shrinks. That did not happen in the last recession, though. The economy contracted in the first quarter of 2001, turned positive in the second quarter, shrank in the third quarter and turned up again in the final quarter of that year.
The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November.
Bush, citing some experts, said the U.S. was not in a recession, although he acknowledged "that the signs are troubling enough" to justify the $168 billion economic rescue plan that passed Congress this past week. The measure he intends to sign on Wednesday includes tax rebates for people and tax breaks for businesses.
So if the poll figure of 61 percent is right — that the country is now in recession — then those relief efforts will help ease the effect of a downturn.
"People are both depressed and anxious about the state of affairs. The anxiety is going to persist because we are in an uncertain season economically and politically," said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Copyright © 2008 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press. Copyright © 2008 Yahoo! Inc. All rights reserved.Questions or CommentsPrivacy Policy -Terms of Service - Copyright/IP Policy - Ad Feedback
Monday, March 17, 2008
DELINQUENT BORROWERS ARE VICTIMS OF PREDATORY LENDING! SAYS INDUSTRY ANALYST
MAJORITY OF DELINQUENT BORROWERS ARE VICTIMS OF PREDATORY LENDING! MOST UNAWARE OF THEIR VICTIM STATUS, SAYS INDUSTRY ANALYST
Fraud Caused by Lenders and Borrower Lack of Awareness Is An Unknown Market Problem
Los Angeles, CA – Despite a surge in news reports about mortgage delinquencies, foreclosure rates and loan modifications, over 80 percent of the late-paying borrowers don't know their lenders may be guilty of originating a predatory loan against them. The implications could make for a much different set of alternatives for the borrowers seeking alternatives to help them avoid foreclosure, says Maher Soliman, an industry expert to legal professionals and founder of the consumer advocacy website www.borrowerhotline.com
According to the governments Department of Housing and Urban Development, or HUD, instances of predatory lending are very specific and necessitate the consumer filing an investigative report request against the lender. HUD's mission is to increase homeownership, support community development and increase access to affordable housing free from lender unlawful practices and discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships--particularly with faith-based and community organizations--that leverage resources and improve HUD's ability to be effective on the community level.
A study conducted on a sampling of incoming inquiry calls to the website posted an alarming discovery as borrowers had no idea, for the most part, of what constitutes a predatory loan.
The survey was even more shocking when considering the overwhelming number of minorities with delinquent loans who failed to negotiate a workout plan with their lender. This finding was in complete contrast to the findings of the agencies, such as Freddie Mac, that found 61 percent of delinquent borrowers didn't know their mortgage lender offered workout options. This is more lender hype and an attempt to confuse the facts according to Soliman. He believes the lenders of America are trying to dodge and deflect the reality of the situation.
I won’t deny the increase in the percentages of delinquent borrowers who understand their lender is appearing to reach out to them. Those versus recent reports that suggest the borrowers are reaching out to their lender to discuss workout options.
Soliman is referring to the 2007 Freddie Mac/Roper survey results based on responses from 2400 plus adult homeowners, including 1,004 delinquent borrowers more than one month late. Roper conducted the survey by telephone from October 23 through November 14. The survey has a three percent margin of error. The new Freddie Mac/Roper poll also says the percentage of delinquent borrowers aware there are housing counselors they can talk to about their mortgage has increased from 36 percent in 2005 to 44 percent today. "This new survey shows efforts to get borrowers to call counselors are starting to work, but that too many at-risk borrowers are still unaware their servicers routinely provide alternatives that can help them stay in their homes," said Ingrid Beckles, Freddie Mac's Vice President of Servicing and Asset Management. "This fact underscores the importance of convincing borrowers to pick up the phone, call their servicer, and find out whether they can avoid foreclosure." Servicers are firms that collect monthly mortgage payments on behalf of investors such as Freddie Mac.
The truth, from Soliman’s perspective, is too many borrower’s are not willing to fight through the multiple telephone “road blocks” that come with seeking help and enduring the often dropped calls. They start to believe almost immediately that the effort is nothing more than adding additional frustration to an already sad situation. Soliman notes, “They (borrowers) often give up after a few hours of effort and resign themselves to the reality that they cannot save their home”.
The majorities of the borrowerhotline.com web visitors are either facing foreclosure or are in the late stages of the process leading up to a trustee sale. Viewers are somewhat shocked to realize for the first time that they are part of an unsettling high number of all delinquent loans whereby one or more examples of lender fraud exists in their file. These instances include fraudulent activity where Soliman believes the borrower was induced to do something unethical at closing. For example, he cites something simple as where the borrower unknowingly misrepresented income on a stated income loan application or was told to exaggerate the amount of total savings in the borrower’s bank account with the lender waiving the need for a verification of deposit. These types of unlawful activities are beyond the borrower’s comprehension say Soliman, as people do not understand the underwriting process or implications of these and other specific secondary mortgage market requirements. The secondary mortgage market is the market for the sale of securities or bonds collateralized by the value of mortgage loans. The mortgage lender /commercial banks/or specialized firm will use specific criteria to qualify borrowers and then group together many similar loans and sell grouped loans as securities called collateralized mortgage obligations (CMOs). In theory, the risk of the individual loan is reduced by the aggregation process. In hindsight it was such a loser situation set up in part due to Wall Street “algorithmic” assumptions and other technical “inside” nonsense determined to eventually come toppling down. And as Soliman puts it, “the pyramid came toppling down with American homeowners receiving the brunt of the responsibility whereby they now are losing their homes”.
Maher Soliman, Managing Director for www.Borrowerhotline.com
Fraud Caused by Lenders and Borrower Lack of Awareness Is An Unknown Market Problem
Los Angeles, CA – Despite a surge in news reports about mortgage delinquencies, foreclosure rates and loan modifications, over 80 percent of the late-paying borrowers don't know their lenders may be guilty of originating a predatory loan against them. The implications could make for a much different set of alternatives for the borrowers seeking alternatives to help them avoid foreclosure, says Maher Soliman, an industry expert to legal professionals and founder of the consumer advocacy website www.borrowerhotline.com
According to the governments Department of Housing and Urban Development, or HUD, instances of predatory lending are very specific and necessitate the consumer filing an investigative report request against the lender. HUD's mission is to increase homeownership, support community development and increase access to affordable housing free from lender unlawful practices and discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships--particularly with faith-based and community organizations--that leverage resources and improve HUD's ability to be effective on the community level.
A study conducted on a sampling of incoming inquiry calls to the website posted an alarming discovery as borrowers had no idea, for the most part, of what constitutes a predatory loan.
The survey was even more shocking when considering the overwhelming number of minorities with delinquent loans who failed to negotiate a workout plan with their lender. This finding was in complete contrast to the findings of the agencies, such as Freddie Mac, that found 61 percent of delinquent borrowers didn't know their mortgage lender offered workout options. This is more lender hype and an attempt to confuse the facts according to Soliman. He believes the lenders of America are trying to dodge and deflect the reality of the situation.
I won’t deny the increase in the percentages of delinquent borrowers who understand their lender is appearing to reach out to them. Those versus recent reports that suggest the borrowers are reaching out to their lender to discuss workout options.
Soliman is referring to the 2007 Freddie Mac/Roper survey results based on responses from 2400 plus adult homeowners, including 1,004 delinquent borrowers more than one month late. Roper conducted the survey by telephone from October 23 through November 14. The survey has a three percent margin of error. The new Freddie Mac/Roper poll also says the percentage of delinquent borrowers aware there are housing counselors they can talk to about their mortgage has increased from 36 percent in 2005 to 44 percent today. "This new survey shows efforts to get borrowers to call counselors are starting to work, but that too many at-risk borrowers are still unaware their servicers routinely provide alternatives that can help them stay in their homes," said Ingrid Beckles, Freddie Mac's Vice President of Servicing and Asset Management. "This fact underscores the importance of convincing borrowers to pick up the phone, call their servicer, and find out whether they can avoid foreclosure." Servicers are firms that collect monthly mortgage payments on behalf of investors such as Freddie Mac.
The truth, from Soliman’s perspective, is too many borrower’s are not willing to fight through the multiple telephone “road blocks” that come with seeking help and enduring the often dropped calls. They start to believe almost immediately that the effort is nothing more than adding additional frustration to an already sad situation. Soliman notes, “They (borrowers) often give up after a few hours of effort and resign themselves to the reality that they cannot save their home”.
The majorities of the borrowerhotline.com web visitors are either facing foreclosure or are in the late stages of the process leading up to a trustee sale. Viewers are somewhat shocked to realize for the first time that they are part of an unsettling high number of all delinquent loans whereby one or more examples of lender fraud exists in their file. These instances include fraudulent activity where Soliman believes the borrower was induced to do something unethical at closing. For example, he cites something simple as where the borrower unknowingly misrepresented income on a stated income loan application or was told to exaggerate the amount of total savings in the borrower’s bank account with the lender waiving the need for a verification of deposit. These types of unlawful activities are beyond the borrower’s comprehension say Soliman, as people do not understand the underwriting process or implications of these and other specific secondary mortgage market requirements. The secondary mortgage market is the market for the sale of securities or bonds collateralized by the value of mortgage loans. The mortgage lender /commercial banks/or specialized firm will use specific criteria to qualify borrowers and then group together many similar loans and sell grouped loans as securities called collateralized mortgage obligations (CMOs). In theory, the risk of the individual loan is reduced by the aggregation process. In hindsight it was such a loser situation set up in part due to Wall Street “algorithmic” assumptions and other technical “inside” nonsense determined to eventually come toppling down. And as Soliman puts it, “the pyramid came toppling down with American homeowners receiving the brunt of the responsibility whereby they now are losing their homes”.
Maher Soliman, Managing Director for www.Borrowerhotline.com
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