Robert Rinehart asked:




September and October of 2010 have ushered in a new era of home loan modification and loan reduction possibilities for homeowners. Major revelations in the mortgage industry have rocked the financial landscape of America. In only two months, widespread instances of improper and even fraudulent foreclosure paperwork filings have come to light. Major lenders have suspended foreclosure proceedings in twenty-three states and Attorneys General in all fifty states have announced investigations into improper foreclosure practices.

This is only the tip of the iceberg, though. The biggest revelation of all, the “MERS” loan registration charade, has yet to get much publicity. The MERS charade promises to be the biggest-ever opportunity for homeowners to successfully negotiate with their lender to lower their principal balance and get lower payments and regain lost equity. Once you understand the MERS Charade, you’ll understand why.

MERS, or the “Mortgage Electronic Registration System” is a database used by lenders to track the sale of mortgages in the secondary mortgage market. Realizing they were going to pay possibly billions of dollars tracking multiple sales of mortgages (called an “assignment”), the lenders developed MERS to track mortgage sales and avoid having to file assignments at the county recorder’s office each time a loan was sold. With over sixty million loans being sold, some more than one time, this represents a huge cost savings and dramatic gain in efficiency. The only problem is that it’s illegal!

You see, the law states that maintaining a proper chain of ownership for loans secured by real property is a vital and important necessity. But MERS completely bypasses this requirement. Lenders thought they could appoint MERS as their “nominee” and if a homeowner defaulted on their loan, MERS would be the foreclosing authority. This is the MERS charade. But here’s where the charade breaks down. Because MERS is only the nominee, MERS doesn’t actually own the loan! And, legally, only the actual owner of the loan can foreclose. It’s as simple as that.

What does this mean for the homeowner? Well, because the originating lender doesn’t own the loan and MERS doesn’t own the loan, neither of them can foreclose! And, the loans have been sliced and diced so much that it’s impossible to piece the actual ownership of the loan together. This means that if you default, no one can foreclose on you. Your loan is no longer secured by your home and it cannot be taken away from you through a foreclosure.

The lenders have realized their mistake and are now capitulating to homeowner negotiations for loan reductions. They have no other choice. Faced with having to write off 100% of the loan vs. getting a new loan with a much lower loan balance, lenders are taking what they can. They’ll give you a loan reduction without putting up much resistance or forcing you to jump through excessive hoops.

All you have to do is find out whether your loan was registered in MERS, which you can do by clicking the following link and reviewing the list of participating lenders, most of which are happy to give you a bank loan modification resulting in a nice loan reduction.

Alvin

Charles Essmeier asked:




The mortgage industry has long been able to adapt to changing market conditions. When interest rates rose to double-digit levels in the late 1970′s, the industry made more adjustable-rate mortgages available. When the savings rate began to drop and Americans had less to put down on homes, the industry made more flexible loan products available that did not require as large a down payment. And now, as immigrants begin to comprise a larger and larger portion of our population, the lending industry is begun to introduce loans that are tailored to an immigrant population that may not have solid credit histories or Social Security numbers.

These loans, known as ITIN loans, are offered to illegal immigrants that do not have a Social Security number. They can qualify for the loans by obtaining an Individual Taxpayer Identification number (ITIN) from the Internal Revenue Service. The IRS issues these numbers to people who are required to pay taxes but are ineligible for a Social Security number. The government uses these numbers for tax purposes only. A few small banks, as well as national banks Citibank and Wells Fargo, have started to issue loans to customers who have an ITIN but not a Social Security number. Most of these loans have been issued in California, but they will probably be available in other places soon.

The process of obtaining an ITIN loan is somewhat more complicated than that of applying for a conventional mortgage. Applicants with an ITIN usually have a credit history that is less well documented. As a result, the usual background work required issuing such a loan is more complicated and more time consuming than for a conventional mortgage. In addition, fees and interest rates will tend to be higher than for other types of loans in order to compensate lenders for the additional trouble and additional risk.

While there is plenty of opposition to lending money to people who are here illegally, few would argue that a neighborhood that consists of homeowners, rather than renters, is a better neighborhood for everyone. Owners are much more likely to take care of their property and show concern for the neighborhood as a whole than are renters. Thus, any lending plan which encourages people to buy, rather than rent, is good for everyone.

Marcia

yggdrasil’s gardener asked:


Just curious if I can get any good answers from out there … with the mortgage industry in turmoil, I’d be curious to know if it means anything.

Caroline