The mortgage lending crisis has claimed another victim. On July 11, 2008, the Federal Government stepped in to take control of Pasadena-based IndyMac, a lending institution specializing in creative loan products such as payment-option home loans.  It is estimated that the Federal Deposit Insurance Corporation will be forced to pay out 4.5-8 Billion dollars to [...]

Two giant Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac are teetering on the brink financially. These two entities, chartered by congress to help consumers find home loans at reasonable rates, are struggling with loan defaults. The Federal Home Loan Mortgage Corporation (”FHLMC”), normally referred to as Freddie Mac, and Federal National [...]

Former black sheep loan servicer, Select Portfolio Services (SPS), is far ahead of the pack on home loan loss mitigation. I previously wrote about the reception I received when I called SPS about a troubled loan. My client was behind on payments by about 12 months and had not paid the property tax for more [...]

The sub prime loan crisis has caused a rapid decline in home values across the country.  This has depressed the middle class consumer and caused a cutback in many industries related to residential construction.  When consumers feel that they have less equity in their homes, they slow their discretionary purchases.  This slow down in consumer [...]

Workouts for borrowers with defaulted home loans are a reality.  Unfortunately, it appears to be the small, specialized sub-prime loan servicers that understand the problem and have figured out how to best solve it.  Large lenders have yet to establish procedures for handing defaulted loans quickly and efficiently without resorting to foreclosure.
In an article I [...]

Most of us receive them in the mail on a pretty regular basis - those official-looking envelopes that resemble a communication from a government agency, or our home lender, or someone else we cannot afford to ignore.  If we open the letter, it is likely to contain a solicitation for questionable financial services.
Having recently worked with a client [...]

For some homeowners who refinanced their homes in those heady days when home prices were increasing daily and loans were available to nearly anyone who could fog a mirror, a day of reckoning has arrived.  Many of the loans sold to borrowers with questionable credit or limited ability to make payments are of a type [...]

For some investors the misery of foreclosure may be a new profit center.  Money managers for some major investment groups are buying up entire home loan portfolios.  Of particular interest seem to be loans that are in default.  If the discount is steep enough, there is obviously money to be made.  This type of company is [...]

The Center for Responsible Lending reported that foreclosures are expected in half of the sub-prime loans that were closed in the last quarter of 2006.  Unfortunately, this prediction was actually made by one of the bond rating agencies that rated the investment vehicles used to fund many of these loans.
With similar predictions for the other [...]

With foreclosures heading toward an all time high, defensive tactics are becoming increasingly important.  Due to the complexity of the home loan securitization process, it is often hard for a loan servicer to find the original paperwork from the loan transaction.  Here is a news story highlighting some of the defenses used by attorneys to [...]