From Epic Win and Why Do I Live Here?

I just talked with one of my former clients who told me she is trying to get her Wells Fargo home loan modified. She has been very cooperative - a study in opposites from how the company has treated her.  She said the last round ended with her loan modification being denied because all of the paperwork she sent - every single page - hadn’t been signed and dated.  Never had they told her to do that.  She has finally hired attorneys to help her through the process because the company seems to be stalling in order to turn her down.  In the end, they will have a full year of every paycheck stub and bank statements.  Is that really necessary?

Meanwhile, the process has decimated her credit score.  She had a conversation with Equifax, though, and that representative told her that credit scores are tanking throughout the country by nearly everyone.  So good luck in getting a new loan, which seem to be highly desirable right now according to MSNBC,

For homeowners who qualify, it’s a good time to refinance. The average rate on a 30-year fixed rate mortgage dipped this week to the lowest rate of the year — 4.84 percent, down from 4.93 percent a week earlier. Homeowners who took out adjustable-rate loans at 4.5 percent in 2005 are now seeing their rates fall to 3 percent to 3.25 percent, McBride says. As a result, they have extra cash to spend.

I’d rather see the economy in a strong, steady recovery, frankly.

The rate of homes in foreclosure may have finally peaked, according to CNN.com reporting on figures released by RealtyTrac.com which tracks foreclosures across the nation.  The drop in foreclosure filings fell by 9 percent from March to April, however experts believe it could possibly take years before foreclosure rates are back to normal.

Currently approximately one in four homeowners owe more on the home than the real estate is worth, which has caused to default,

These “strategic defaults” now account for nearly one in three foreclosures, according to a recent report from the University of Chicago Booth School of Business and Northwestern’s Kellogg School of Management. That’s up from 22% 12 months earlier.

The strategic defaults have been polarizing among readers who study financial planning.  Some say that if you obligated yourself to pay X amount for a home, then you should stand by that obligation.  Others believe the homes only weigh down owners when this happens.. if they walk away they can recover financially in seven years.

Still, it’s a good thing that the foreclosures seem to have plateaued.

Say your parents have a lot of money. They hire housekeepers, gardeners, even a pool boy.  But suddenly they can’t pay the salaries, they can’t pay their bills, they can’t pay for your new clothes - all because they are living on credit and this credit can’t be paid back.

It’s kind of the same thing happening in Greece.  The dominoes are falling and they’re taking a lot of others down with them.  From Longing for Home, John Vaala helps explain it,

The European Union on Monday made public its $1 trillion bailout of Greece and other potential defaults in nations such as Portugal, Spain, and Ireland saving, for now, the value of the Euro from deflating and igniting yet another worldwide monetary crisis.

What’s better is his link to this youtube video.