Jun 30

The Housing Crisis – Five Years and counting! Is There An End in Sight?

When housing market prices in the U.S. began escalating in the 1980′s they basically continued to rise until the early 2000′s. Then the fiasco began. In June, 2006, the housing market crisis became a reality.

A family in California, the Giangregorios, who actually had equity in the home they have lived in for the last seventeen years, six of which were years they were renting in order to save the down payment, actually were being forced out of that home by their lender because they had missed a couple of mortgage payments. This was due to the husband developing complications with his very severe case of multiple sclerosis. Both the husband and wife had promising careers at the time. The husband was eligible for disability but it had not kicked in yet when Ocwen started harassing them.

During the third month of falling behind in their monthly mortgage payments, they attempted to start Ocwenrepaying the loan. Ocwen then said they would not accept one payment at that time and they would have to come up with the money for all three months’ payments that they were behind on. The Giangregorios explained that they would soon have the disability money that they were entitled to and would be back on track to become current with their monthly mortgage payments.

Ocwen then advised them to apply for a loan modification, which they did, at least a year ago. They applied for the HAMP program but were notified that they did not qualify because their income was too high. Ocwen then sent them a letter via regular mail informing them that they had been approved for a “streamlined modification.” This modification would have lowered their monthly mortgage payment by about $400 but would also add a balloon payment in seventeen years.

The letter also stated that they had other options but the deadline to take part in any of these programs was January 31, 2011. The nightmare with their lender continued when they called Ocwen and spoke with someone in India who did not know what they were talking about. They attempted to get answers by calling the next day. This time the person on the other end was aware of the offer, but could not answer any of their questions about it. Trying to do the responsible thing in order to save their family home, the Giangregorios actually contacted a financial planner, who advised them to take their lender up on their offer by transferring the funds required – $2,078.66.

The nightmare continues – when they called Ocwen to notify them of their decision to take part in the plan, they were told they were a few hours too late. Ocwen then informed the couple that there was no foreclosure date or sale date and they would reconsider them for a loan modification. Then they began receiving letters from a company called Western Progressive threatening them with foreclosure. Each time they received one of these letters, Dina Giangregorio called Ocwen and was continually reassured that they were under review for their modification and would not be foreclosed upon as long as they were being considered for a loan modification. As in most cases, she was required to submit documentation that she had already sent in previously.

On May 19th, they received correspondence from Western Progressive informing them that their home would be sold on June 6th at noon. They then called Ocwen to inform them of this correspondence and were told there was NO SALE DATE scheduled and to have Western Progressive contact Ocwen, which they did. When they called Ocwen back approximately thirty minutes later, the representative they had just spoken with was not available and the representative they had reached told them there was in fact a sale date set for their home.

Keep in mind that the Giangregorios were not even asking for a loan modification when this nightmare began. They were only trying to make up the payments they were behind on, which they were now capable of doing. It was their lender who suggested they apply for a loan modification. This family was not even “underwater.”

OcwenThis is all from a lender who printed the following on their letters to the Giangregorios:

Helping Homeowners is What We Do.

Ocwen Loan Servicing

Due to some home values having fallen up to a whopping 40%, millions of homeowners continue to face possible foreclosure sale dates or short sales. Certain agencies, Moody’s among them, expect this bad news to continue for another fourteen years, that’s 2025!

To add insult to injury, in April, 2011, commercial real estate prices also took a nosedive (3.7)% for the fifth month in a row. These lowered prices continue to contribute to the overall market decline.

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