HAFA Lobbied By Banks

[Account Closed]

HAFA was most likely heavily lobbied by the banks to have the politicians sign off on this. As stated earlier it's another excuse for the banks to harm the homeowners and make more money be getting the home back quicker throught the deed in lieu foreclosure.

Here is a Msnbc’s Dylan Ratigan piece that is an indictment that the politicians are in bed with the banks.
http://www.msnbc.msn.com/id/32450072/vp/36233217#36233217

If I was a politican and I was getting paid $355 million dollars in campaign contributions then I wonder what kind of legislation I would pass regardless of the interests of the American Citizen.

I would educate all of the misinformed realtors and homeowners of the harm that HAFA will do to the homeowners and that they should just stick with doing regular short sales with good real estate investors.

David H.

[Jason S.]

James - while this may be true - the bank still has a better/stronger position with a deed in lieu than without it.
With a deed in lieu they can sell the note for more or they can leave the person in for as long as they want, negotiate an immediate leaseback, there are many things they can do.
It simply makes their position stronger. Without extra expense of foreclosure. Now they own a property with a non-paying occupant, before they simply had a non-performing loan but had to dish out extra money to actually own it. Add this to the fact that once they have the DIL they do not have to worry about forensic audits, predatory lending lawsuits etc - and while these may not be very common or successful - the DIL makes it one less potential risk.

Last thing, A lender can now pull together a package of 1000+ homes, lease them out with property management, and re-sell the package to secondary investors on wall street that are buying cash flow (with potential capital gain over the next decade)- never know this may be the strategy! I have not run the numbers but this may well be a profitable strategy as these investors will likely accept a cap rate that is market driven if the risk is spread out wide enough - thus making the value of the packaged asset worth more than the sum of each if they were sold one by one.

As a disclaimer -I am just typing this out this morning and have not run the numbers - so my little theory may not pencil out.