Silicon Valley Real Estate Investor

Over on his blog, Dr. Housing Bubble does a really interesting job in explaining exactly how the Home Affordable Modification Program (HAMP) is NOT working as expected. Here are some basic numbers:

About3 million homeowners would qualify
About 500,000 loans in the trial modification phase (about 1/6 of all eligible)
Of these only about 3% seem to have successfully converted to permanent modifications!

Responding to a crescendo of consumer advocate requests for greater regulation of the loan modification industry, Governor Schwarzenneger yesterday signed into a law a bill that prohibits loan modification firms from asking for cash up front. Not only that, it also does the same for attorneys who specialize in loan modifications. This bill takes effect immediately.

In this interview, one of the local stations interviews Jeff Davi, the Real Estate Commissioner for the State of California on the subject of Loan Modifications and Loan Modification Scams.

The fact is, many of us as real estate investors have gotten into mortgage trouble in the past few years with creative mortgages, falling home prices, and economic difficulties among renters. We may have even undertaken, or considered doing, loan modifications.