I Short Sale Aims to Curve Detrimental Affects of New Lending Regulations

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Eli Tene, President of I Short Sale, Inc. (ishortsale.com), states, "We see the trend growing daily. People are being choked! We hear disheartening story after story from borrowers that come to us for short sale solutions or that have already been foreclosed upon by their lender, as they were unable to refinance." I Short Sale has quickly become the largest processor of short sales in the country, aiding the millions of Americans faced with losing their homes and damaging their credit. "As rules and regulations continue to tighten, people with the inability to show full documentation are being singled out and washed away."

Eli Tene, President of I Short Sale, Inc. (ishortsale.com), states, "We see the trend growing daily. People are being choked! We hear disheartening story after story from borrowers that come to us for short sale solutions or that have already been foreclosed upon by their lender, as they were unable to refinance." I Short Sale has quickly become the largest processor of short sales in the country, aiding the millions of Americans faced with losing their homes and damaging their credit. "As rules and regulations continue to tighten, people with the inability to show full documentation are being singled out and washed away."

"I am surprised that we don't see and hear every second about this disaster of letting people lose their homes with no real solution. I heard President Bush even state that since borrowers were irresponsible in the economic decision they made, unfortunately, they must live with it. Well I have news for you, these decisions came from government encouragement at the same time," asserts Raffi Tal, Chief Operating Officer of I Short Sale. "We at I Short Sale will do what we can to change this and to adjust the restrictions, and promote both federal- and state-designed programs in the attempt to save those homeowners, and set aside funds for that sole purpose."

Due to a "confluence of factors" (according to the Mortgage Banker's Association Chairman), America has recently experienced the well documented "subprime mortgage meltdown." As many borrowers' loans reset, they were unable to stay current on their mortgage payments; this has led to a dried up secondary market, an oversupply of housing, and ultimately a lender response in tighter credit guidelines. What does this all mean? The answer: that a large segment of the American population will never fully enjoy the ownership that so many have taken for granted.

Studies show that as many as 65% of subprime borrowers and up to 40% of prime borrowers will bear severe difficulty, if not the impossibility, of refinancing again. The new reality: The state and federal governments have aided in washing away millions of homeowners, closing the door for them to be able to refinance. Since these homeowners do not have equity, they will be tested based on their "real income." A new statement issued by the federal financial regulatory agencies on June 29, 2007, affirms that residential mortgage providers should be more cautious in dealing with adjustable-rate mortgages, implementing risk management and key underwriting standards that should be followed in order to mitigate future hazards. The statement also provides that "qualifying standards" should include an analysis of the borrowers' financial solvency and ability to repay the loan at maturity, assuming a fully amortized repayment schedule.    

"Twenty-Eight state mortgage regulators have asserted that they intend to quickly implement the statement suggestions...I believe that 19 have already adopted it," says Tal. "This essentially means that it will be harder, or even impossible, to get a loan, and those currently struggling in a property will surely be hung out to dry." I Short Sale aids these distressed homeowners by negotiating a short sale, or an agreement in which the lender agrees to be paid less than the loan amount, and allows a third party to buy the property. This process offers the owner a fresh start, with the chance to recover without the large monthly payments. "The issue we are now running into is having to further reduce the list price of these properties in order to accommodate the full documentation buyers. But at the end of the day, we are still working hard to benefit both the homeowner and the lender by completing the transaction."    

The new guidelines greatly affect low-end properties that cannot be sold in many locations as the buyers, by definition, cannot qualify. Other predatory lending guidelines aim to establish fiduciary relationships between mortgage brokers and borrowers, prohibiting originators from navigating borrowers into loans "that are not reasonably advantageous." In theory these practices are beneficial to the U.S. economy, but another way to look at it is where do the already struggling homeowners go now?

I Short Sale (ishortsale.com) hopes to aid this large segment of the population and get borrowers back on their feet. "Although many borrowers will be forced to vacate their homes, they will protect something that is more valuable for their future: their credit. Simultaneously, a lender will rid their books of a non-performing asset, increasing capital for other investments. It truly represents a win-win situation!"

For more information on I Short Sale, Inc., you can email info(at)ishortsale.com or call
1-877-90-SHORT.

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Shoham Nicolet
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