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Foreclosures helped spark financial world turmoil. But efforts to curb them, widely seen as needed to stabilize the housing market and support prices, show just modest progress.

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"Really, we have a national catastrophe," said Moe Bedard, president of Loan Safe Solutions, a mortgage-auditing firm in Corona, Calif.

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Dig deeper and the picture changes. Far more mortgage workouts are being started than finished.

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"When we purchase mortgages and mortgage-backed securities, we will look for every opportunity possible to help homeowners . . . while also protecting taxpayers," Assistant Treasury Secretary Neel Kashkari said this week, describing plans to buy securities and mortgages.

But Richman says some lenders are now hoping to get more money selling properties to the government, instead of at deep discounts in pre-foreclosure short sales to investors or other homebuyers.

Another problem is the time it takes to do modifications. Richman says it typically takes five weeks to get a negotiator assigned once he's sent a proposal. Some have 300-400 cases on their desks.

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Direct property investors are being left out of modification efforts. Rice says all lenders are still refusing to negotiate with them and many investment properties are going "straight to foreclosure," further depressing real estate values.

UGLINESS in general, and for so many.....

Potential SILVER LININGS for patient investors!!!

Cheers,
Dave Donhoff
Leverage Planner

For years, when I was doing workouts I carried a portfolio of 125-130 loans at any given time. Now, in fairness, it was a mixed portfolio containing residential real estate, commercial real estate, & business loans. The larger commercial/business loans took more time but still...there's really no way a single loan officer can affectively manage 300-400 negotiations at a time. Hmmm, I also had to manage the properties, build-out unfinished properties, & sell them. If these loan officers do not have those tasks...maybe, maybe it's reasonable. I also handled the auctions & that was a LOT of work especially the construction loans.

Still, it seems like at least 100 too many cases for one loan officer. I imagine they are still adding staff. It's very hard to take an underwriting officer & transform them into workouts. It's a mentality thing.

I heard somewhere recently that Countrywide has hired 1,000+ people to concentrate on rewrites. I imagine they're getting only minimal training. I learned to do workouts slowly over a several year period of time. That's a luxury today.

/tricia