Mortgage Servicing Fraud
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US banks to clear home loan books

By Suzanne Kapner in New York

Published: February 17 2010 02:00 | Last updated: February 17 2010 02:00

Big US banks including Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are moving to clear their books of troubled mortgages by embracing "short sales", in which homeowners settle debts by selling their properties for less than the mortgage value.

Short sales are expected to climb sharply this year as home values continue to fall in some parts of the US, leaving many borrowers owing more on their mortgages than their homes are worth.

As moratoriums on mortgage payments and temporary loan modifications expire in coming months, the number of homes entering, or in, foreclosure is also expected to climb to a record 4.3m, from 3.4m in 2009.

The appeal of short sales for banks is smaller losses. Compared with foreclosures, banks say they lose 20 per cent less on short sales. BS!

After spending most of the past year focusing on largely ineffective loan modification plans, BofA, Wells Fargo, JPMorgan Chase and other lenders said they were ramping up short sales as a means of dealing with the housing crisis.

"If 2009 was the year of the loan modification, 2010 will be the year of the short sale," said Jim Klinge, a real-estate broker in San Diego, California.

Some of the largest mortgage servicers are scrambling to make the most of this shift. Wells Fargo is holding seminars to teach real-estate brokers how to conduct short sales. Citigroup created a unit to expedite short sales and recently announced a pilot programme that gives homeowners who turn in their deed to the bank - known as a deed-in-lieu transaction - at least $1,000 towards relocation expenses.

BofA has hired additional staff to handle the increased volume, which is running at about double the level of a year ago. "Short sales are growing faster than foreclosures and that's a new development," said Matt Vernon, a BofA executive recently named to a new position of overseeing short sales.

The moves come as the Obama administration prepares to launch a programme in April that encourages homeowners, lenders and investors to complete short sales by providing up to $3,500 in incentives.

Banks had been hesitant to embrace short sales, which require agreement by all lien holders and are subject to higher rates of fraud.

Real-estate brokers said this was changing. "It used to take a year to get approval on a short sale," said Leslie Carver, a real- estate agent in Las Vegas. "Now these deals are getting the green light from banks in a month and approval rates are way up."

Mark Zandi, chief economist of Moody's, forecasts short sales and deed-in-lieu transactions will total 20 per cent of all distressed home sales this year, up from 15 per cent last year.

Copyright The Financial Times Limited 2010.

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O Really! Short Sales to whom is the question here? The American taxpayer, may be one. Next question where will all the seller's of short sales live? Renting in movement home's aguired in the "short sales".

This is yet another fairy tale cooked up on Maiden Lane &  Washington that they hope the American people will be yet again dazed and confused by! Next thing  you know Goldman  will be investing in the builders of "double wide's" to house all the displaced homeowners.

Fact here is that all the "junk" MBS securitized, vapor non existent collateral crap has been  dumped onto the American taxpayer, now and for future generation's,  blessed and anointed by the Washington/ Wall Street elite! Get it now. We are more then three year into this mess and the problem gets worse every day. Yet our BAIL OUT BUDDIES get million dollar bounises for doing what?

So let's see here, a short sale by a pretender lender, for an undislosed "trust" aka an investor will do what for the American people? 

Just my opinion!

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