Untapped and Undertapped Foreclosure Prevention Strategies

Strategies for Banks and the nation to prevent more foreclosures, help people stay in (if this is

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  1. rayman mathoda
    Strategies for Banks and the nation to prevent more foreclosures, help people stay in (if this is
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    Untapped and Undertapped Foreclosure Prevention Strategies
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    • 1. CONFIDENTIAL Un-tapped and Under-tapped Foreclosure Prevention Strategies: “Let a Hundred Flowers Bloom” December 15, 2008 Ray Mathoda; Founder, CEO: HausAngeles, Inc. Acknowledgments: Ron Garber, Founder/CEO, Short Sale Plan; Eric Friedman, SVP, Loss Mitigation, Indymac Bank
    • 2. Overall background on the housing and economic crisis and government approaches to date •  The U.S. economy is facing the most severe credit crisis since the Great Depression of the 1930s and most political leaders, policy makers, and business leaders agree that the stabilization of the real estate market will mark the turning point for overall economic recovery •  The $700 billion “TARP” bailout package and related programs (which are growing/evolving over time) are primarily focused on providing continuing liquidity for conforming mortgages (through Fannie & Freddie) and helping Banks and other financial institutions get and remain stable so they engage in new lending •  These programs do not address foreclosure prevention in a material way; nor are they focused on addressing the over-supply of homes for sale in the market currently •  The FDIC has been the primary proponent of foreclosure prevention to help stabilize the US housing market, and has developed/refined a loan modification program (first launched at Indymac Bank) which has achieved some success. In addition, Banks/servicers have developed and executed a myriad of loan modification programs internally •  The FDIC and other loan modification initiatives make sense but current approaches need to be refined and more needs to be done. For example, execution strategies on current loan modification initiatives have resulted in low/moderate penetration and significant quality issues (e.g., approximately 50% of modified loans already have payment/quality issues within 6 months per the OCC). 1
    • 3. Key National Leaders Are Calling For More To Be Done FDIC (We are) “getting behind the curve” by not taking more aggressive action Chairwoman Sheila Bair Washington Times, 11/19/08 Federal Reserve “Despite good-faith efforts by both the private and public sectors, the Chairman foreclosure rate remains too high, with adverse consequences for both those Bernanke directly involved and for the broader economy. More needs to be done” NY Times, 12/05/08 “I have said no” to funding a foreclosure prevention effort … have not found a Treasury program that “strikes the right balance” between helping homeowners and Secretary protecting taxpayer money. “I am looking very hard” for such a program Paulson Washington Times, 11/19/08 House Financial “Let a hundred flowers bloom” by experimenting with ways to help Services Committee Chair homeowners avoid losing their homes Washington Times, 11/19/08 Barney Frank 2
    • 4. Current Timeline: Troubled Mortgages/Assets and Foreclosures 6-24+ Month Process ILLUSTRATIVE Home sale Delinquency Default Foreclosure 3-6 months 3-6 6-12 months months Foreclosure Loan forbearance Loan modification Improving REO prevention and loan and/or modification or short sale execution resolution initiatives Focus on area to date Medium Low Medium Innovation level; number Medium Low Low/Medium of new approaches/ •  FDIC loan mod program •  Bulk sales programs (vs. historical practice) Evaluation of B C B overall execution •  Need 100% uptake from •  Current approaches on the ground lenders/servicers on FDIC “broken”: no standards, thus far programs very time consuming, little •  Program penetration and focus by most lenders / quality can be improved servicers Opportunity for High High Low/Medium standardization and new multi-lender/investor initiatives Note: Timelines above vary widely by Servicer, Investor and Individual Situation and are not specific to any particular servicer, situation or investor 3
    • 5. “Let a Hundred Flowers Bloom”: Proposed Initiatives to Minimize Bank/Investor Economic Losses While Reducing Foreclosures and Helping More Individuals Stay in their Homes •  Leverage “feet on the street” (e.g., real estate or other communities/infrastructure) to improve success of FDIC program: There is an opportunity to leverage professionals (and local leaders) who live and work in the same communities as troubled borrowers/consumers to help increase both the penetration and quality of loan modification programs •  Turning owners into renters: For individuals who can afford reduced “rental” payments but not mortgage level payments, there is an opportunity to create programs that allow families to stay in the home while transferring ownership to investors searching for income producing investments •  Short Sales: The foreclosures process is timely and expensive, particularly in a declining home price environment. Foreclosures should be replaced by systematic, standardized short sales: this is better for consumers, lenders/investors, and the overall US economy. But…there are no accepted industry-wide standards and current practices do not favor short sales over foreclosure •  Affordable Housing: The nation has not made adequate investments to improve and expand our affordable housing stock since World War 2. Housing Authorities across the nation (e.g., Los Angeles) are embarking on affordable and public housing developments and redevelopments. These approaches do not significantly leverage the current over-supply of housing at an overall/national level. Why not turn this economic “breakdown” into a “breakthrough” for affordable housing (while also de- concentrating poverty) in the USA? 4
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Recent Reviews

  1. GracieJ10
    GracieJ10
    5/5,
    Version: 17/12/2008
    Foreclosure was not on my list for things to do for Christmas. Guess the bank didn't care that my kids weren't going to have any Christmas and if they had their way, they wouldn't have a house either. 1st Foreclosure Prevention came to my rescue and just in time too. We may not have a lot under the tree, but we still have our home.
  2. BessieH
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    5/5,
    Version: 17/12/2008
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  3. RaymondHopper
    RaymondHopper
    5/5,
    Version: 17/12/2008
    Foreclosures happen, it happened to me. I found some serious help and was able to save my home. 1st Foreclosure Prevention did a super job. Without their help I know I'd be looking for someplace to live.
  4. JunieB
    JunieB
    3/5,
    Version: 17/12/2008
    I'm so glad I found 1st Foreclosure Prevention. They are the reason I still have my home. Without there expertise, I know I would be out looking for another place to live. I owe them everything.
  5. BettyLong
    BettyLong
    3/5,
    Version: 17/12/2008
    All my life I've had to learn from the school of hard knocks. My adult life is the same. It took having to deal with a foreclosure before I grew up enough to take life seriously. It's a good thing that 1st Foreclosure Prevention was around to help me out of the mess. I know I would have lost it all without them.
  6. RicknCindy
    RicknCindy
    5/5,
    Version: 17/12/2008
    Our family face foreclosure and were scared we had no where to turn, when we were introduced to 1st Foreclosure Prevention. With the help of 1st Foreclosure Prevention we were able to get a loan modification and save our home. Itis great that you showed the different ways people can save their home from foreclosure. Had it not been for the expertise of 1st Foreclosure Prevention, we would have lost our home for sure.
  7. billnewman77
    billnewman77
    3/5,
    Version: 17/12/2008
    I was at the end of the proverbial rope. I had lost my job, and now I was about to lose my house. I couldn't get my bank to even talk about a solution. They wanted all of the back payments plus fines. My new boss told me who to contact. The next day I called 1st Foreclosure Prevention and now my life is back on track again. They were great to work with and they never made me feel like I had done something wrong. I recommend this company to anyone facing foreclosure.
  8. PixieFerrell
    PixieFerrell
    5/5,
    Version: 17/12/2008
    Nothing I had encountered in my lifetime prepared me to face the foreclosure on my home. I felt like it was me against the world until I found 1st Foreclosure Prevention. They helped me get a loan modification and the foreclosure is history. I know I would have lost everything without their help. They were really great to me.
  9. SuzieQ1949
    SuzieQ1949
    3/5,
    Version: 17/12/2008
    I hear more and more great stories about 1st Foreclosure Prevention all the time. They really are the best. I know they sure helped my parents when they were trying to save their home. They are the company to call for foreclosures.
  10. BrendaBare
    BrendaBare
    3/5,
    Version: 17/12/2008
    I called company about my foreclosure and was asked to leave a message and told someone would return my call shortly. I waited 2 days and never got that call. My second call was to 1st Foreclosure Prevention. After my first experience, I wasn't expecting much. Was I wrong! They spent close to an hour on the phone with me, asking questions and explaining the ins and outs of foreclosure. It was all very helpful to me. They succeeded in saving my home too. I can't say enough nice things about them.