Las Vegas real estate, mortgage, appraisal blog

Countrywide has caused even more woes for Bank of America as they have had to suspend foreclosure notices on nearly 2000 homes in Phoenix. Although there are lenders that are willing to work with those that are having problems making their mortgage payments this instead is forcing them to help out any mortgage heading towards foreclosure, including those of the same speculators and those who are able to afford their payments but simply do not want to pay.

The move, which will lead to cuts in people's mortgage payments, is part of the bank's recent settlement agreement with the office of Arizona Attorney General Terry Goddard and could help stem the growing number of foreclosures that has crippled the local housing market.

Last month, BofA agreed to modify loans for struggling borrowers if attorneys general from Arizona, Texas, Ohio, Iowa and Washington halted legal action against Countrywide. That action is based on the lender's "alleged use of deceptive practices" in its mortgage-lending business, according to Goddard.

The deal requires BofA to place a temporary hold on foreclosures on loans made up until the end of 2007 and work with buyers to make their mortgage payments more affordable so they have the option of staying in their homes.

Rick Simon, spokesman for BofA, said the bank will contact homeowners when its home-retention program is ready at the beginning of December.

It seems almost a veiled threat to other lenders that they follow suit.

"Now, we are asking other big mortgage firms to take on the same obligations to work with struggling borrowers as (BofA)," Goddard said.

"We have asked them to do it voluntarily without us filing a lawsuit, but investigations do continue into fraud and the possible inducement (of homeowners) into some of these mortgages by firms."

Money from the national housing-bailout plan passed last summer will be available in Arizona to help more struggling homeowners next year.

Until then, other big lenders are expected to step up efforts to help borrowers facing foreclosure.

On Friday, JPMorgan Chase announced that it would modify up to $110 million in mortgages nationwide. It expects to assist 400,000 families who need help making their home-loan payments.

"It's a far better solution to have companies working with buyers than foreclosures," Goddard said.

"This is important in getting us out of this mortgage meltdown and getting property values to firm up."

Some argue that this will only prolong the problem and encourage others to foreclose. Even those who are turned to for advice seem to have gotten in on the act. Here's a video of Jim Cramer with advice on what to do when you've lost equity.

Walk Away

If that seems unreal, he clarifies it the next day.

No really, I mean it

If that doesn't sound like encouragement to just dump I'm not sure what does. Not terribly encouraging for lenders or those looking to buy.