All Forum Posts by: Dave Kennedy

There is no way they can get the majority of the balances down to 38-31% of income in most cases in my opinion. The reason is because so many of these loans were used with stated income...falsely stated. People said they made 100k that were making 40k and bought a 400k house.

So that person who makes around 40k can afford a mortgage of around 1,100 a month on the upper end of that ratio. Meaning a 204,000 loan.

Are you telling me they are going to write down the balance of that loan to 204 k on a 400k house?

Even if this is an extreme scenario are you really going to see 50-200k principal reductions on people that should have never owned a home in the first place?

I've been listening to CNBC this morning and they have been releasing some of the plan to bailout homeowners.

It was just released an hour and half ago so the details are few and far between at this point but here are some notes.....

-Helps and estimated 4-5 million homeowners
-conforming loans owned or guaranteed by Fannie and Freddie.
-borrowers refi to lower interest rates
-no jumbo loans.

-$75 B stability initiative for at risk borrowers. Lenders need to reduce the amount on the loan to bring the ratio to 38% of the borrowers income. The government will then step in and subsidize more of that bringing the ratio down to 31%.

-Servicers to rework the loan will be paid 1,000 incentive by the govt and then another 1,000 in year two if the loan is successful and the borrower is current.

-The government will also pitch in 1,000 a year to the borrower to stay current on their loan. Effectively you get 1,000 a year if you don't miss a payment from the government. But this is only people loans who are reworked not people that have been paying and current all along.

-Government is going to double the amount of money to Fannie and Freddie so they can continue to buy up loan packages. Additional money not coming from TARP.

Thoughts......?

(This is not going to go over well here...jmo.) :D

J Scott,

I think you summed it up well and I believe you are dead on with your opinion about the banks stipulation about the DD period.

The agent kept repeating that the bank would not allow an inspection...etc.

I'm pretty sure she didn't understand exactly what the bank was saying.

I'll be calling again tomorrow to clarify and find another agent if need be.

Thanks to everyone in this thread for their input.

Interesting Jon. I'll see if I can get a "showing" and bring an inspector through. The bank doesn't need to know he's an inspector...lol.

I did seem a bit odd that the bank requested no inspections. I guess a well seasoned investor that knows how to throughly inspect a property himself would be a buyer here.

Curt,

Thanks for the reply. There is a bank owned property on the MLS and I called an agent they said the bank won't allow for inspection once under contract. Do you think the agent is mistaken?

That seems crazy. Who on earth would by without an inspection?

Another question.

An agent said that the bank has restrictions on getting a contractor or inspector to look at the property? Does this mean I can't have an inspection contigency?

Is it possible for you to get your contractor and inspector in the property before you put an offer in? This way you know where you stand before the offer goes in. I'd hate to get it under contract and then be bound by the banks rules.

Another question.....Can you finance an REO or does it need to be all cash?

I'm thinking that a bank would want cash and not risk taking a loan out on a place that is already bank owned.

Wow thanks Josh! Nail on head...this was exactly the type of list I was looking for. I don't know how I overlooked that here.

Interesting I'll keep this in mind.

Anyone else have input? MLS the way to go for REO's?