Comments on: Strategic Home Mortgage Default in Recourse States and Non-Recourse States http://www.americaneer.com/recourse-and-non-recourse-state-mortgage-default/ Thu, 08 Dec 2011 13:00:48 +0000 hourly 1 http://wordpress.org/?v=3.3 By: James Mucci http://www.americaneer.com/recourse-and-non-recourse-state-mortgage-default/comment-page-1/#comment-1810 James Mucci Wed, 17 Mar 2010 16:18:34 +0000 http://www.americaneer.com/?p=2739#comment-1810 There is another option, for many borrowers who are thinking of walking away because they do not have the hardship required for the loan modification. The home affordable refinance program. This allows you to refinance to a much lower payment and up to 125% of your homes current value, in some cases. This way you are not "locked out" of the home buying market for many years, and you don't suffer the consequences of the reduced credit scores. Also the banks and lenders did not typically lend more than a home was worth, but the majority of homes that are underwater, got that way because of the lost equity from the housing bubble bursting. Add in the the huge inventory of homes for sale, and coming on the market, and you have a snowball effect. Add in job losses, more foreclosures, and the snowball keeps rolling. Now they say 26% of foreclosures are "strategic", that's a real shame, we will not recover if we don't try. Hopefully we can get back on track. James Mucci - <a href="http://michiganmortgageadvisor.com/michigan-refinancing-option-for-underwater-homeowners/" rel="nofollow">Michigan Refinancing</A> .-= James Mucci´s last blog ..<a href="http://michiganmortgageadvisor.com/michigan-refinancing-option-for-underwater-homeowners/" rel="nofollow">Michigan Refinancing Option for Underwater Homeowners</a> =-. There is another option, for many borrowers who are thinking of walking away because they do not have the hardship required for the loan modification. The home affordable refinance program.
This allows you to refinance to a much lower payment and up to 125% of your homes current value, in some cases. This way you are not “locked out” of the home buying market for many years, and you don’t suffer the consequences of the reduced credit scores.
Also the banks and lenders did not typically lend more than a home was worth, but the majority of homes that are underwater, got that way because of the lost equity from the housing bubble bursting. Add in the the huge inventory of homes for sale, and coming on the market, and you have a snowball effect. Add in job losses, more foreclosures, and the snowball keeps rolling. Now they say 26% of foreclosures are “strategic”, that’s a real shame, we will not recover if we don’t try.

Hopefully we can get back on track.

James Mucci – Michigan Refinancing
.-= James Mucci´s last blog ..Michigan Refinancing Option for Underwater Homeowners =-.

]]> By: Americaneer http://www.americaneer.com/recourse-and-non-recourse-state-mortgage-default/comment-page-1/#comment-1787 Americaneer Sun, 07 Mar 2010 17:25:00 +0000 http://www.americaneer.com/?p=2739#comment-1787 @ Scott: According to <a href="http://en.wikipedia.org/wiki/Nonrecourse_debt" rel="nofollow">Wikipedia</a>, <blockquote>Nonrecourse debt or a nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defaults, the lender/issuer can seize the collateral, but the lender's recovery is limited to the collateral. If the property is insufficient to cover the outstanding loan balance (for example, if real estate prices have dropped), the difference between the value of the collateral and the loan value becomes a loss for the lender. Thus, non-recourse debt is typically limited to 50% or 60% loan-to-value ratios, so that the property itself provides "overcollateralization" of the loan. <strong>Non-recourse debt is typically used to finance commercial real estate and similar projects with high capital expenditures, long loan periods, and uncertain revenue streams.</strong> It is also commonly used for stock loans and other securities-collateralized lending structures. Because most commercial real estate is owned in a partnership structure (or similar tax pass-through), non-recourse borrowing gives the real estate owner the tax benefits of a tax-pass-through partnership structure (that is, loss pass-through and no double taxation), and simultaneously limits personal liability to the value of the investment.</blockquote> @ Scott: According to Wikipedia,

Nonrecourse debt or a nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defaults, the lender/issuer can seize the collateral, but the lender’s recovery is limited to the collateral. If the property is insufficient to cover the outstanding loan balance (for example, if real estate prices have dropped), the difference between the value of the collateral and the loan value becomes a loss for the lender. Thus, non-recourse debt is typically limited to 50% or 60% loan-to-value ratios, so that the property itself provides “overcollateralization” of the loan. Non-recourse debt is typically used to finance commercial real estate and similar projects with high capital expenditures, long loan periods, and uncertain revenue streams.

It is also commonly used for stock loans and other securities-collateralized lending structures. Because most commercial real estate is owned in a partnership structure (or similar tax pass-through), non-recourse borrowing gives the real estate owner the tax benefits of a tax-pass-through partnership structure (that is, loss pass-through and no double taxation), and simultaneously limits personal liability to the value of the investment.

]]> By: Scott http://www.americaneer.com/recourse-and-non-recourse-state-mortgage-default/comment-page-1/#comment-1781 Scott Tue, 02 Mar 2010 01:32:03 +0000 http://www.americaneer.com/?p=2739#comment-1781 Are commercial mortgage recourse or non recourse? Are commercial mortgage recourse or non recourse?

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