The Ranieri Mortgage Plan – Part Two
Monday, June 28th, 2010Lewi Ranieri, the creative originator of the mortgage-backed security is not taking a removed, back-seat approach to help homeowners stay in the homes. His Selene Residential Mortgage Opportunity Fund provides hands-on solutions for defaulting homeowners.
Ranieri has assembled a savvy group of experienced advisers to help struggling owners stay in their homes. The counselors sound more like
upbeat, can-do problem solvers than debt collectors. The prevailing attitude is positive, friendly and result oriented.
The Selene Fund advisers offer plenty of experienced advice about restructuring debt and improving the value of the residence. Solutions have included advancing money to perform repairs, debt counseling and budget review. These tools are used by Selene to get the homeowners back on track and repaying a much lower mortgage level than previously existed.
Ranieri has admitted a sense of guilt about his development in the mortgage-backed securities market. His hope is that property owners will use his fund to save their ownership and that government will come to realize that the real cure to stemming the foreclosure tide lies in voluntarily reducing mortgage amounts rather than lose the bulk of the value.
In short, the Selene Fund appears to be a mortgage short sale. Lenders may actually save more than they lose by giving back to the original buyers. Ranieri’s plan addresses the two key obstacles facing millions of today’s owners. These struggling and often unemployed owners cannot afford the current mortgage payments and are not motivated to keep paying on homes with mortgages that exceed the home’s value.
What makes this housing slump so unique is the stunning loss of value spread throughout the nation. Federal government and state driven plans are not resulting in affordable mortgage modifications. Through Selene’s willingness to negotiate lower mortgages, but the cost side and value side of the slump are being addressed.
Selene’s program also is designed to restore the traditional homeowner’s pride of ownership, which has slumped badly in the recession. Ranieri wants owners to want to remain in their homes and is offering principal reductions that make it hard to say no.