Homeowners going through the loan modification process know how difficult dealing with both mortgage servicers and the government can be.
Homeowners going through the loan modification process know how difficult dealing with both mortgage servicers and the government can be. Now, as the U.S. economy struggles to rebound from the largest recession since the 1930s, the federal government has become increasingly invested in getting large financial institutions on their feet again, and in the process has consolidated much of the mortgage business into three financial giants.
Figures released on the first half of 2009 indicate that three large banks are now making more than 50 percent of U.S. mortgages. Wells Fargo, Bank of America and J.P. Morgan Chase have originated 52 percent of mortgages in 2009 so far, which is more than double these banks’ share of the market in 2005.
This dramatic change raises very important questions for homeowners weighing their financial options or considering loan modification. The American housing market is still dependent largely on government support, and it remains to be seen what will happen to the market in the long run as a result of this support.
There are two possible long-term outcomes to this situation. Ideally, the large amount of aid the Fed is giving banks at the moment will lessen as the market and financial institutions regain strength; however, it is also possible that this emergency assistance could create a permanent system in which large mortgage servicers benefit from a larger share of fee revenue while taxpayers bear the brunt of mortgage default-risk. And without a California loan modification attorney to help navigate the shifting financial terrain, many homeowners can find themselves at the mercy of mortgage servicers and government bureaucracy.
Even while Wells Fargo, Bank of America and J.P. Morgan Chase are originating lots of new mortgages, they are selling them to other financial giants, Fannie Mae and Freddie Mac, both of whom are set for government acquisition. The amount of single-family mortgages actually held on the big three banks’ balance sheets is down 3.5 percent since the beginning of 2009. Meanwhile, their posted revenue from mortgage banking has skyrocketed to a combined $14 million, three times more than revenue of three years ago.
Though some of this revenue stems from the banks marking up their mortgage-servicing assets, most of the increase is due to fees from creating enormous amounts of new loans, which are eventually sold to the government in taxpayer- subsidized securities. If you are in need of a loan modification, now is the time to act. But if the back and forth between mortgage servicers and the government mystifies you, you are not alone.
The big banks seem to be getting bigger all the time, which can make loan modification seem like a daunting prospect to homeowners. An experienced California loan modification attorney can help you through the process by interacting with the monolithic mortgage servicers and the government on your behalf.
In today’s financial turmoil, having an accomplished California loan modification attorney working with you and for you will exponentially increase your chances of staying in your home and avoiding foreclosure. Doing battle with such large banks as Bank of America is near impossible to do by yourself, which is why a skilled attorney is so important to have by your side.
The Feldman Law Center is one of California’s top loan modification companies, providing excellent loan modifications service to our clients. Call us at 800-588-0425 forforeclosure help.
