Banks help more homeowners than the Obama Plan
If you aren’t eligible for the HAMP loan modification program, don’t worry too much. Bank are modifying more loans through their own in house loan modifications programs.
Banks have realized that foreclosing on home after home after home may not be in anyone’s best interest — least of all their own. So they’ve ramped up the number of loan modifications they’re handing out to their delinquent clients.
Banks are doing nearly twice as many modifications under their own foreclosure prevention initiatives than under the Obama administration’s signature Home Affordable Modification Program, known as HAMP.
But before homeowners rejoice, they should take a close look at the terms of their bank modification offers, consumer advocates say. Many may not be as good as HAMP, which lowers monthly payments to 31% of pre-tax income.
read more @http://money.cnn.com/2010/08/30/news/economy/foreclosure_modifications/
Shawn
Categories: Loan Modification Tags: diy loan modification, diyloanmodkit.com, do it yourself loan modification, Loan Modification
Could 62 Million Homes Be Foreclosure-Proof?
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles — and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.
Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.
MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee” — an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.
That means hordes of victims of predatory lending could end up owning their homes free and clear — while the financial industry could end up skewered on its own sword.
As always
Shawn
Categories: Loan Modification Tags: diy loan modification, DIYLoanmodkit, diyloanmodkit.com, do it yourself loan modification, Loan Modification, Mers
Bill would spare credit score in loan modification
If you are lucky enough to get your lender to modify your mortgage, you shouldn’t end up dogged by a miserable credit score. That’s the essence of a bill introduced in Congress by Rep. Jackie Speier, D-Calif. It would insulate people from taking a credit-score hit for going through loan modifications.
Speier is trying to give people a fresh start as they get either a permanent modification that makes monthly payments more affordable, or a temporary modification, which lenders sometimes use before considering permanent relief. “I am seeing people with sterling credit have their scores dinged as much as 100 points,” Speier said.
A 100-point drop is substantial. It can prevent people from getting life insurance, loans on cars or homes, or even a job. For a small business, a credit-score hit can be a death knell as lenders refuse a line of credit essential for operations. “This is a doomed spiral,” Speier noted.
According to the U.S. Department of Housing and Urban Development, the No. 1 reason people are missing home payments is that they have lost a job or had to take a lesser-paying job. About 16 percent of Americans are unemployed or underemployed, and there are five applicants for every job available.
So if a lower credit score keeps people from getting a new job, that’s counterproductive for the person and the economy, Speier said.She added that modifications benefit neighbors and communities because property values remain intact as people stay in homes, make payments and mow lawns.
Read more @http://azstarnet.com/business/article_65548eec-a5d7-5c4d-8668-b753f03d3096.html
As always,
Shawn
Categories: Loan Modification Tags: diy loan modification, diyloanmodkit.com, do it yourself loan modification, Loan Modification
Biggest Defaulters on Mortgages Are the Rich
No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic. By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
Read more@http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1
As always,
Shawn
Categories: Loan Modification Tags: diy loan modification, diyloanmodkit.com, do it yourself loan modification, Loan Modification
homeowners hoping to buy again after a foreclosure or short sale
After a foreclosure or a short sale, some people might never want to bother with another home purchase. On the other hand, lenders are hearing from more and more former homeowners who can’t wait for the next opportunity to buy.
After a short sale you will have to wait two to three years to buy again. However, FHA has a loan product that requires no wait time if the homeowner had a short sale but didn’t miss any payments.
Click here for more information on the no-wait time loan (see page 4), http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf
The wait time for a foreclosure is three to seven years. Conventional loans require a four-year wait time if the circumstances were job loss or illness. Otherwise it’s a seven-year wait time. FHA loans require a three-year wait period. The next surge of home buyers will be these former homeowners who will be able to qualify again.
read more @http://www.kvoa.com/news/former-homeowners-hoping-to-buy-again-after-a-foreclosure-or-short-sale/
As always,
Shawn
Categories: Loan Modification Tags: DIYLoanmodkit, diyloanmodkit.com, do it yourself loan modification, foreclosure, Loan Modification
Prove that mortgage!
The thorny issue is of growing interest to New York judges — who last year faced more than 50,350 foreclosure actions, according to RealtyTrac, many of which were brought by banks that have sold or securitized the loans. Such actions make proving which entity owns the loan difficult.
That issue is key — banks that can’t prove they own a loan can’t legally foreclose. At times, lenders and law firms have been chastised for taking short cuts to gloss over the ownership issue. Complicating matters is that most delinquent homeowners battle foreclosure actions without a lawyer and get steamrolled.
But that may be changing.
On June 3, Bankruptcy Judge Allan Gropper denied a bank’s attempt to move against a homeowner because it couldn’t prove it owned a mortgage.
Five days later, Brooklyn state court Judge Wayne P. Saitta, citing a bank’s “egregious” misrepresentation, awarded a homeowner $10,000 in sanctions when the bank tried to evict knowing it didn’t own the mortgage.
As always,
Shawn
Categories: Loan Modification Tags: diy loan modification, DIYLoanmodkit, diyloanmodkit.com, do it yourself loan modification, Loan Modification
Maryland makes new demands on mortgage lenders
Maryland residents facing foreclosure can begin taking advantage of a new law requiring mortgage lenders to prove they tried to modify a loan before forcing residents out of their homes.
The bill, which took effect Thursday, directs lenders to provide homeowners with all the information and paperwork necessary to contest lenders’ decisions before issuing a foreclosure notice.
Lenders must pay a $300 fee for every foreclosure notice issued and borrowers must pay $50 if they request mediation.
Loan analysts have said the bill would drive lenders out of the state, but Gov. Martin O’Malley’s spokesman, Shaun Adamec, said the measure targets only predatory lenders.
The Department of Housing and Community Development expects to collect nearly $11 million in fees from mortgage lenders in 2011 and $218,000 from homeowners under the new bill.
As always,
Shawn
Categories: Loan Modification Tags: diy loan modification, diyloanmodkit.com, do it yourself loan modification, Loan Modification
Deeding title better than short sale
Some of the largest mortgage servicers and lenders in the country are gearing up campaigns to reach out to carefully targeted borrowers with cash incentives that sometimes range into five figures, plus a simple message: Let’s bypass all the time-consuming hassles of short sales and foreclosures. Just deed us the title to your underwater home and we’ll call it a deal. We won’t come after you to collect any deficiency between what you owe us on the mortgage and what we obtain from the home sale. We might even be able to wrap up the whole transaction in as little as 30 to 45 days. How about it?
Mortgage companies say troubled borrowers increasingly are signing up. One of the largest servicers, Bank of America, has mailed out 100,000 deed-in-lieu solicitations to customers in the past 60 days, and its volume of completed transactions is breaking company records, according to officials.
What precisely are deeds-in-lieu? The full name is deeds-in-lieu-of-foreclosure. They are voluntary transfers of property ownership from borrowers to creditors that make court-directed foreclosures unnecessary.
The concept is one of the oldest in real estate, but it got a special boost earlier this year when the Obama administration included it as an option in its Home Affordable Foreclosure Alternatives program, and mortgage giant Fannie Mae cut the penalty-box time for homeowners who use the technique from four years to two before they can qualify for another home mortgage. To sweeten the pot, Bank of America is offering cash incentives that range anywhere from $3,000 to $15,000 .
Deeds-in-lieu usually don’t work when there are multiple mortgages from different creditors encumbering the property. Also, though deeds-in-lieu do less damage to borrowers’ credit histories than foreclosures or bankruptcies, they definitely leave a mark. Fair Isaac, developer of the widely used FICO credit score, says on its “MyFico” Web site that deeds-in-lieu and short sales are both treated as “not paid as agreed” accounts, and are treated the same by the FICO scoring model.
Read more@http://www.bostonherald.com/business/real_estate/view/20100627deeding_title_better_than_short_sale/
As always,
Shawn
Categories: Loan Modification Tags: Bank of America loan modification Bank of America HAMP program, Deeds-in-lieu, diyloanmodkit.com, do it yourself loan modification, Loan Modification
Aid to the Unemployed Facing Foreclosure: Too Little, Too Late?
Unemployment drives foreclosure, and the two are jointly destroying middle-class wealth as the effects of the recession linger on. The Obama administration’s efforts to help such homeowners thus far have faltered, failing to put a dent in the wave of home losses. Two new programs are specifically designed to help unemployed people undergoing foreclosure. But for many, it might be too little, too late.
This week, the Home Affordable Modification Program — the administration’s flagship effort to help homeowners by letting them refinance for lower monthly mortgage payments and thereby avoid foreclosure — reported dismal numbers. In recent months, the program has kicked out far more homeowners than it has helped. It has completed only 346,000 modifications — though it initially set its sights on three million.
Just 120 HAMP modifications since March have included principal reduction, according to a report by the Office of the Comptroller of the Currency and Office of Thrift Supervision released on Wednesday. Testifying before the Senate Finance Committee, Neil Barofsky, special inspector general for the Troubled Asset Relief Program, said the HAMP program “risks being remembered not for catalyzing a recovery from our current housing crisis, but rather for bold announcements, modest goals and meager results.”
But this week, the Obama administration is moving on two little-noticed provisions that finally address the crisis of unemployed homeowners facing foreclosure and possibly enact more effective measures than mortgage modification. On Wednesday, President Obama gave final approval for the $1.5 billion Hardest Hit Fund, proposed this winter to help homeowners in the states most impacted by the unemployment and housing crises. The states — at first just California, Nevada, Arizona, Michigan and Florida — have already come up with “innovative” proposals to keep homeowners in homes using federal funds. Now, the federal government will give them hundreds of millions to enact them. The measures include cramdown, or principal reduction, cited as the most effective method to staunch foreclosure; and pools of money to help foreclosed families pay arrears. And some states will give unemployed homeowners low-interest loans to help make mortgage payments.
Read more @ http://washingtonindependent.com/88160/aid-to-the-unemployed-facing-foreclosure-too-little-too-late
As always,
Shawn
Categories: Loan Modification Tags: diy loan modification, diyloanmodkit.com, do it yourself loan modification, Loan Modification, unemployment and loan modification
More than 15,000 South Floridians receive permanent loan modifications
The Obama administration released its May report for the Making Home Affordable loan modification program today showing that about 15,050 borrowers in Palm Beach, Miami-Dade and Broward counties have received a permanent monthly payment reduction. But nearly 429,700 homeowners nationwide have been cancelled from the program, mostly after initial income claims to earn a trial modification could not be verified, said Treasury Department officials this morning.
The number of cancelled trial modifications was just 155,173 in April. HUD Secretary Shaun Donovan said the large increase in cancellations followed the administration’s push to get as many struggling borrowers into the program as possible during its early months in spring 2009.
Trial modifications were approved on a borrower’s statement of income, which may not have been verifiable to make it a permanent modification. “We are not surprised by the significant number,” Donovan said. Lenders are now required to get income verification before beginning a trial modification.
Monday’s report included new information on what happens to people kicked out of the program, showing about 49 percent are able to stay in their homes through an alternative modification. Of the remainder, about 4 percent go into bankruptcy, 7 percent go into foreclosure, 2 percent do a short sale or deed in lieu, 9 percent become current on their loan and no longer need the program, and 1 percent pay off their loan. About 26 percent still have action pending on their loan.
As always,
Shawn