See? More options are becoming available every day!
An article in The Boston Globe - "Still There, Foreclosed No Longer: Nonprofits Help Occupants Buy Back Homes" - discusses non-profit agencies who assist foreclosure victims negotiate standard mortgages to buy back their properties. Interesting!
Let's see how this picks up around the country.
Showing posts with label Foreclosure News. Show all posts
Showing posts with label Foreclosure News. Show all posts
Monday, May 11, 2009
Thursday, March 12, 2009
No Justice for Foreclosure Con Artists
Reprinted from a recent Associated Press article:
Cons Working Foreclosure Scams Rarely Go To Jail
By Marlon A. Walker and Kathleen Hennessy
LAS VEGAS (AP) — They call themselves loan modification consultants, negotiators or specialists. Some are legitimate, but many are simple con artists looking for desperate marks facing foreclosure amid the wreckage of the nation's housing market.
It's a good business, too, since in most states, there's not much of a chance they'll ever end up before a judge facing any time in jail.
"It's difficult for us to get prosecutors to do the investigations on misdemeanors," said North Carolina Attorney General Roy Cooper.
While some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors in places where foreclosure scams are common are civil actions designed to recover a victim's money.
Only in a few states are attorneys general offices — which tend to be a focal point of consumer protection efforts — willing and able to seek criminal charges and jail time against such con artists. While consumers might be helped financially by the civil cases, advocates say criminal prosecutions would do more to stop these scams.
"You've got to do something to get their attention," said Tom Bartholemy, president of a Better Business Bureau office in southern North Carolina. "Because what's being done — these civil actions — isn't."
The fake foreclosure fixers are operating in a target-rich environment. More than 2 million homeowners faced foreclosure proceedings last year, and the number is expected to rise this year.
That's the audience for roadside billboards around places like Las Vegas that scream "Save my property!" and radio ads that promise "expert help." Some companies comb property records and send mail designed to look like it's from the homeowner's lender: "We have reviewed your property information and determined that you may be eligible for a loan modification."
After Hugo Malara lost his job at a neon sign company and fell behind on his home loan, he called Derric Robinson, a loan modification specialist who advertises a "money back guarantee."
Malara and his fiancee Maria Sorto paid Robinson an $800 fee, but say they rarely heard from Robinson again. In fact, the bank had already sold their neat stucco bungalow when they handed Robinson the check.
"He was recommended by a friend. He said he could fix the problem," said Malara, a 48-year-old immigrant from El Salvador, who said he does not plan file a lawsuit.
Robinson said he made calls to the home's new owners on Malara's behalf. And he blamed Malara for not cooperating and said the fee was compensation for his time.
"That's how much my time was worth," he said, adding that the work was done outside his job as a loan modification specialist for a California company.
Some of those making the offers to help are former brokers, agents and appraisers who've seen their previous business evaporate. But it's difficult to gauge if even the legitimate offers to help are more effective than nonprofit credit counselors who also work with lenders at no charge.
"There are plenty of HUD-approved nonprofits who will do this work for free and that's what we recommend," said Rick Simon, a spokesman for Calabasas, Calif.-based Countrywide Financial Corp., once the nation's largest mortgage lender.
But federal loan modification programs, as well as lender-designed programs, are complicated and time consuming. The Obama administration's new housing recovery plan aims to change this by standardizing the process for modifying loans and offering lenders financial incentives. Cooperation remains voluntary on the part of lenders.
Homeowners who have gotten mixed up with scammers are flooding Better Business Bureau chapters, state attorney generals and consumer protection offices with complaints. Bartholemy said his office in Charlotte, N.C., received about 1,700 last year, while the Bureau of Consumer Protection in Nevada takes in more than 100 a month.
The response from state prosecutors so far, according to a national Associated Press survey, has largely come on the civil side of the court docket. Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.
In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage foreclosure rescues entirely.
"We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims," said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.
Officials in North Carolina say just one person has been convicted since 2004 for such a crime.
In Alabama, the attorney general's office usually reaches out to the foreclosure relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division.
"It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.
In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely.
"We set out to try to shut these companies down so they can't harm anyone else, and we try to get people's money back as much as we can," said Ben Wogsland, a spokesman for the Minnesota Attorney General.
There are some attorneys general making criminal cases. In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money laundering charges. Two defendants pleaded guilty, and the third case is pending.
In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.
Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial.
The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.
"I think the tide is turning," said John Kelleher, a deputy attorney general in Nevada. "A lot of these mortgage scams are so large scale and affect so many people, the judges are more willing to give prison time."
Associated Press writers Mary Esch in Albany, N.Y., Schuyler Dixon in Dallas, Ben Greene in Baltimore, Dave Dishneau in Hagerstown, Md., Catherine Tsai in Denver, and Kathleen E. Miller in Annapolis, Md. contributed to this report.
Cons Working Foreclosure Scams Rarely Go To Jail
By Marlon A. Walker and Kathleen Hennessy
LAS VEGAS (AP) — They call themselves loan modification consultants, negotiators or specialists. Some are legitimate, but many are simple con artists looking for desperate marks facing foreclosure amid the wreckage of the nation's housing market.
It's a good business, too, since in most states, there's not much of a chance they'll ever end up before a judge facing any time in jail.
"It's difficult for us to get prosecutors to do the investigations on misdemeanors," said North Carolina Attorney General Roy Cooper.
While some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors in places where foreclosure scams are common are civil actions designed to recover a victim's money.
Only in a few states are attorneys general offices — which tend to be a focal point of consumer protection efforts — willing and able to seek criminal charges and jail time against such con artists. While consumers might be helped financially by the civil cases, advocates say criminal prosecutions would do more to stop these scams.
"You've got to do something to get their attention," said Tom Bartholemy, president of a Better Business Bureau office in southern North Carolina. "Because what's being done — these civil actions — isn't."
The fake foreclosure fixers are operating in a target-rich environment. More than 2 million homeowners faced foreclosure proceedings last year, and the number is expected to rise this year.
That's the audience for roadside billboards around places like Las Vegas that scream "Save my property!" and radio ads that promise "expert help." Some companies comb property records and send mail designed to look like it's from the homeowner's lender: "We have reviewed your property information and determined that you may be eligible for a loan modification."
After Hugo Malara lost his job at a neon sign company and fell behind on his home loan, he called Derric Robinson, a loan modification specialist who advertises a "money back guarantee."
Malara and his fiancee Maria Sorto paid Robinson an $800 fee, but say they rarely heard from Robinson again. In fact, the bank had already sold their neat stucco bungalow when they handed Robinson the check.
"He was recommended by a friend. He said he could fix the problem," said Malara, a 48-year-old immigrant from El Salvador, who said he does not plan file a lawsuit.
Robinson said he made calls to the home's new owners on Malara's behalf. And he blamed Malara for not cooperating and said the fee was compensation for his time.
"That's how much my time was worth," he said, adding that the work was done outside his job as a loan modification specialist for a California company.
Some of those making the offers to help are former brokers, agents and appraisers who've seen their previous business evaporate. But it's difficult to gauge if even the legitimate offers to help are more effective than nonprofit credit counselors who also work with lenders at no charge.
"There are plenty of HUD-approved nonprofits who will do this work for free and that's what we recommend," said Rick Simon, a spokesman for Calabasas, Calif.-based Countrywide Financial Corp., once the nation's largest mortgage lender.
But federal loan modification programs, as well as lender-designed programs, are complicated and time consuming. The Obama administration's new housing recovery plan aims to change this by standardizing the process for modifying loans and offering lenders financial incentives. Cooperation remains voluntary on the part of lenders.
Homeowners who have gotten mixed up with scammers are flooding Better Business Bureau chapters, state attorney generals and consumer protection offices with complaints. Bartholemy said his office in Charlotte, N.C., received about 1,700 last year, while the Bureau of Consumer Protection in Nevada takes in more than 100 a month.
The response from state prosecutors so far, according to a national Associated Press survey, has largely come on the civil side of the court docket. Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.
In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage foreclosure rescues entirely.
"We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims," said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.
Officials in North Carolina say just one person has been convicted since 2004 for such a crime.
In Alabama, the attorney general's office usually reaches out to the foreclosure relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division.
"It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.
In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely.
"We set out to try to shut these companies down so they can't harm anyone else, and we try to get people's money back as much as we can," said Ben Wogsland, a spokesman for the Minnesota Attorney General.
There are some attorneys general making criminal cases. In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money laundering charges. Two defendants pleaded guilty, and the third case is pending.
In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.
Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial.
The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.
"I think the tide is turning," said John Kelleher, a deputy attorney general in Nevada. "A lot of these mortgage scams are so large scale and affect so many people, the judges are more willing to give prison time."
Associated Press writers Mary Esch in Albany, N.Y., Schuyler Dixon in Dallas, Ben Greene in Baltimore, Dave Dishneau in Hagerstown, Md., Catherine Tsai in Denver, and Kathleen E. Miller in Annapolis, Md. contributed to this report.
Wednesday, March 11, 2009
Foreclosures Hit New High
Dammit... I hate to say "I told you so". I really do.
MarketWatch announced today that the number of completed U.S. foreclosures in February was 121,756, the highest monthly total since the crisis began, according to data from Foreclosures.com. The figure was a 67% increase from the 72,694 reported in January and was also well above the previous monthly high of 104,243 set last September. The number of pre-foreclosure filings also set a new monthly record, rising 24% to 207,703 in February from 166,860 in January.
Now... WHY DID THIS HAPPEN? Why are we seeing a spike now?
One word, good people... moratoriums.
The spike occurred because the foreclosure moratoriums enacted in late 2008 ended, and we have a sudden rise in foreclosure numbers. Mind you, the Fannie/Freddie/Major Bank moratoriums on foreclosures have not ended yet - if they had, we would see a GREATER spike than what was reported.
Folks, we have GOT to get a handle on this! More shortly...
MarketWatch announced today that the number of completed U.S. foreclosures in February was 121,756, the highest monthly total since the crisis began, according to data from Foreclosures.com. The figure was a 67% increase from the 72,694 reported in January and was also well above the previous monthly high of 104,243 set last September. The number of pre-foreclosure filings also set a new monthly record, rising 24% to 207,703 in February from 166,860 in January.
Now... WHY DID THIS HAPPEN? Why are we seeing a spike now?
One word, good people... moratoriums.
The spike occurred because the foreclosure moratoriums enacted in late 2008 ended, and we have a sudden rise in foreclosure numbers. Mind you, the Fannie/Freddie/Major Bank moratoriums on foreclosures have not ended yet - if they had, we would see a GREATER spike than what was reported.
Folks, we have GOT to get a handle on this! More shortly...
Tuesday, March 10, 2009
Over 9200 FHA Loans in Default After No or Only One Payment
There is something severely wrong with this picture, and I cannot wrap my mind around a solution. I am not usually one to spread panic... it's not in my nature. However, it may take me few days to work through a way to solve (or at least give my two cents) this latest report.
Sunday, the Washington Post's story, "The Next Hit: Quick Defaults: More FHA-Backed Mortgages Go Bad Without a Single Payment" told a grim story about the failure of the Federal Housing Authority's mortgage system.
"... the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency's historic role in backing mortgages is more crucial now than at any time since its founding.
With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency's overall growth in new loans, according to a Washington Post analysis of federal data.
Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.
If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.
The spike in quick defaults follows the pattern that preceded the collapse of the subprime market as some of the same flawed lending practices that contributed to the mortgage crisis are now eroding one of the main federal agencies charged with addressing it. During the subprime lending boom, many mortgage brokers and small lenders milked the market for commissions and fees by making as many loans as possible with little regard for whether they could be repaid.
Once again, thousands of borrowers are getting loans they do not stand a chance of repaying. Only now, unlike in the subprime meltdown, Congress would have to bail out the lenders if the FHA cannot make good on guarantees from its existing reserves. And those once-robust reserves are showing signs of stress, raising the possibility that taxpayers may have to pick up the tab for the first time since the agency was established in 1934.
More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no or only one payment, according to the Post analysis. The pace of these instant defaults has tripled in one year. By last fall, more than two dozen FHA home loans on average were defaulting this way every day, seven days a week."
That is one of the scariest things I have read in years.
The article goes on to talk about how there is an instant presumption of fraud of loans immediately go into default, but, due to the rise in FHA mortgages, the agency is unable to pursue predatory lenders with haste, if at all. Meanwhile, these lenders or brokers are targeting homeowners with direct mail and phone solicitation, enticing them to refinance over and over again with advertised low rates. The constant refinancing means that a homeowner can take cash out without having to make a payment on the loan.
"The broker makes money on every transaction," said Carr, a former executive at mortgage financier Freddie Mac. "They're not going to turn away an application if they can get it through. There have been situations where people refinance and refinance to avoid making payments and the broker just keeps getting the fees. What do they care?"
This whole thing makes my head hurt.
Sunday, the Washington Post's story, "The Next Hit: Quick Defaults: More FHA-Backed Mortgages Go Bad Without a Single Payment" told a grim story about the failure of the Federal Housing Authority's mortgage system.
"... the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency's historic role in backing mortgages is more crucial now than at any time since its founding.
With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency's overall growth in new loans, according to a Washington Post analysis of federal data.
Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.
If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.
The spike in quick defaults follows the pattern that preceded the collapse of the subprime market as some of the same flawed lending practices that contributed to the mortgage crisis are now eroding one of the main federal agencies charged with addressing it. During the subprime lending boom, many mortgage brokers and small lenders milked the market for commissions and fees by making as many loans as possible with little regard for whether they could be repaid.
Once again, thousands of borrowers are getting loans they do not stand a chance of repaying. Only now, unlike in the subprime meltdown, Congress would have to bail out the lenders if the FHA cannot make good on guarantees from its existing reserves. And those once-robust reserves are showing signs of stress, raising the possibility that taxpayers may have to pick up the tab for the first time since the agency was established in 1934.
More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no or only one payment, according to the Post analysis. The pace of these instant defaults has tripled in one year. By last fall, more than two dozen FHA home loans on average were defaulting this way every day, seven days a week."
That is one of the scariest things I have read in years.
The article goes on to talk about how there is an instant presumption of fraud of loans immediately go into default, but, due to the rise in FHA mortgages, the agency is unable to pursue predatory lenders with haste, if at all. Meanwhile, these lenders or brokers are targeting homeowners with direct mail and phone solicitation, enticing them to refinance over and over again with advertised low rates. The constant refinancing means that a homeowner can take cash out without having to make a payment on the loan.
"The broker makes money on every transaction," said Carr, a former executive at mortgage financier Freddie Mac. "They're not going to turn away an application if they can get it through. There have been situations where people refinance and refinance to avoid making payments and the broker just keeps getting the fees. What do they care?"
This whole thing makes my head hurt.
Monday, March 9, 2009
Updates on Homeowner Affordability and Stability Plan: Do You Qualify?
Last week, the details for the Homeowner Affordability and Stability Plan were released to the public. Again, the criteria for qualification are as follows -
For homeowners who are CURRENT on their payments, but the value of the house is less than the mortgage:
For homeowners who are AT RISK of foreclosure:
If you fall within the criteria above, you need to contact your mortgage servicer and ask to be considered for a Home Affordable Refinance (for CURRENT homeowners) or Home Affordable Modification (for AT RISK borrowers). Make sure you have gathered the following materials:
1. Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
2. Your most recent income tax return.
3. Information about your assets.
4. Information about any second mortgage on the house.
5. Account balances and minimum monthly payments due on all of your credit cards.
6. Account balances and monthly payments on all your other debts such as student loans and car loans.
7. If you are behind on your payments, a letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).
Please be patient! Servicers received the detailed program requirements on March 4, 2009 and it may take some time before they are fully operational. However, Treasury has encouraged servicers to immediately assist delinquent borrowers at the greatest risk of foreclosure.
Information provided by www.financialstability.gov.
For homeowners who are CURRENT on their payments, but the value of the house is less than the mortgage:
- Your home must be your primary residence.
- You have a Fannie Mae or Freddie Mac loan. If you don’t know, contact 1-800-7FANNIE (www.fanniemae.com/homeaffordable) or 1-800-FREDDIE (www.freddiemac.com/avoidforeclosure).
- You current on your mortgage payments (“Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months).
- You believe that the amount you owe on your first mortgage is about the same or less than the current value of your house.
For homeowners who are AT RISK of foreclosure:
- Your home must be your primary residence.
- The amount you owe on your first mortgage equal to or less than $729,750.
- You having trouble paying your mortgage. For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills).
- You have a Fannie Mae or Freddie Mac loan. If you don’t know, contact 1-800-7FANNIE (www.fanniemae.com/homeaffordable) or 1-800-FREDDIE (www.freddiemac.com/avoidforeclosure).
- You received your current mortgage before January 1, 2009.
If you fall within the criteria above, you need to contact your mortgage servicer and ask to be considered for a Home Affordable Refinance (for CURRENT homeowners) or Home Affordable Modification (for AT RISK borrowers). Make sure you have gathered the following materials:
1. Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
2. Your most recent income tax return.
3. Information about your assets.
4. Information about any second mortgage on the house.
5. Account balances and minimum monthly payments due on all of your credit cards.
6. Account balances and monthly payments on all your other debts such as student loans and car loans.
7. If you are behind on your payments, a letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).
Please be patient! Servicers received the detailed program requirements on March 4, 2009 and it may take some time before they are fully operational. However, Treasury has encouraged servicers to immediately assist delinquent borrowers at the greatest risk of foreclosure.
Information provided by www.financialstability.gov.
Wednesday, February 25, 2009
Wells Fargo Joins the National Urban League to Offer Foreclosure Relief Through Education
Wells Fargo Joins the National Urban League to Offer Foreclosure Relief Through Education: Timely Resource from Foreclosure Expert Places Power in the Hands of Homeowners Across the Nation
In a joint press conference being held at the 10th Annual State of the Black Union, Wells Fargo and the National Urban League will announce their partnership to publish a new edition of The Foreclosure Workbook written by national foreclosure expert Carla Douglin. On the heels of the enactment of President Obama’s foreclosure rescue plan, Wells Fargo and the National Urban League are providing this timely workbook to answer the President’s call for responsibility on behalf of the organizations standing at the forefront of homeowner relief.
The Foreclosure Workbook provides a step-by-step process to guide homeowners through the hurdles of foreclosure and presents critical information about state procedures, foreclosure legislation and how to avoid scams. Author of The Foreclosure Workbook—Carla Douglin—is regarded for her counsel enabling homeowners to navigate the foreclosure process through her company the Douglin Group, in addition to her books, radio show (Foreclosure Exposure Radio) and speaking engagements.
Speakers slated to appear at the press conference include Tavis Smiley andThe Smiley Group and Cara Heiden, Wells Fargo Home Mortgage Co-President.
Wells Fargo hopes to reach one of the groups hardest hit by the mortgage crisis at the State of the Black Union. As part of its Leading The Way Home Initiative, Wells Fargo is aligning with the National Urban League, which has made significant strides in driving homeowner education and counseling services to African American communities.
In a joint press conference being held at the 10th Annual State of the Black Union, Wells Fargo and the National Urban League will announce their partnership to publish a new edition of The Foreclosure Workbook written by national foreclosure expert Carla Douglin. On the heels of the enactment of President Obama’s foreclosure rescue plan, Wells Fargo and the National Urban League are providing this timely workbook to answer the President’s call for responsibility on behalf of the organizations standing at the forefront of homeowner relief.
The Foreclosure Workbook provides a step-by-step process to guide homeowners through the hurdles of foreclosure and presents critical information about state procedures, foreclosure legislation and how to avoid scams. Author of The Foreclosure Workbook—Carla Douglin—is regarded for her counsel enabling homeowners to navigate the foreclosure process through her company the Douglin Group, in addition to her books, radio show (Foreclosure Exposure Radio) and speaking engagements.
Speakers slated to appear at the press conference include Tavis Smiley andThe Smiley Group and Cara Heiden, Wells Fargo Home Mortgage Co-President.
Wells Fargo hopes to reach one of the groups hardest hit by the mortgage crisis at the State of the Black Union. As part of its Leading The Way Home Initiative, Wells Fargo is aligning with the National Urban League, which has made significant strides in driving homeowner education and counseling services to African American communities.
Monday, February 23, 2009
Swarm in Ft. Lauderdale Gets Rowdy... is Government Underestimating the Housing Crisis?
As I was picking up a bottle of water and a Fast Company magazine at the San Francisco airport this morning, I hear the news streaming the story about the housing "riot" in Ft. Lauderdale over the weekend. I couldn't pay fast enough... I wanted to find out more about the story!
According to the Sun Sentinel, approximately 4500 people showed up at the Housing Authority of Ft. Lauderdale when they announced that new Section 8 housing had become available. However, the agency completely underestimated the demand and only had 3000 applications ready. The application process shut down early and the police were called when the crowd "grew unruly".
Points to remember: 4500 people showed up BEFORE EIGHT IN THE MORNING to receive assistance. In actuality, people were lining up on Friday night in front of the building - the police had to cordon off the street and set up barricades due to the high demand. The Housing Authority had 3000 applications. They are quoted as saying that "it was a much larger crowd than anticipated...." and are unsure of how many applications actually got distributed. So... what happens now?
People got angry, to say the least. Ft. Lauderdale has been one of the cities that has been the hardest hit by the housing crisis (8th highest foreclosure rate in Florida - one out of every 182 homes in some state of foreclosure, according to RealtyTrac), and many of the people that are applying for assistance have been displaced by foreclosure. The Housing Authority distributed flyers and ran ads promoting this assistance, and then shut it down when they received a deluge of response. What is their plan of action to attend to the obvious need?
The need is great, and even that feels like a massive understatement. Based on this one example, is it possible that the government agencies - federal, state, and local alike - are underestimating the housing crisis, and the affect on all aspects of American homeownership?
According to the Sun Sentinel, approximately 4500 people showed up at the Housing Authority of Ft. Lauderdale when they announced that new Section 8 housing had become available. However, the agency completely underestimated the demand and only had 3000 applications ready. The application process shut down early and the police were called when the crowd "grew unruly".
Points to remember: 4500 people showed up BEFORE EIGHT IN THE MORNING to receive assistance. In actuality, people were lining up on Friday night in front of the building - the police had to cordon off the street and set up barricades due to the high demand. The Housing Authority had 3000 applications. They are quoted as saying that "it was a much larger crowd than anticipated...." and are unsure of how many applications actually got distributed. So... what happens now?
People got angry, to say the least. Ft. Lauderdale has been one of the cities that has been the hardest hit by the housing crisis (8th highest foreclosure rate in Florida - one out of every 182 homes in some state of foreclosure, according to RealtyTrac), and many of the people that are applying for assistance have been displaced by foreclosure. The Housing Authority distributed flyers and ran ads promoting this assistance, and then shut it down when they received a deluge of response. What is their plan of action to attend to the obvious need?
The need is great, and even that feels like a massive understatement. Based on this one example, is it possible that the government agencies - federal, state, and local alike - are underestimating the housing crisis, and the affect on all aspects of American homeownership?
Friday, February 20, 2009
5 Facts About the Obama Homeowner Stimulus Plan
From US News. com: A rundown of the Homeowner Affordability and Stability Plan announced this week (posted February 19, 2009)
1. Aims to allow 4 million to 5 million homeowners to refinance mortgages
2. Establishes $75 billion fund to reduce homeowners' monthly mortgage payments
3. Sets $6,000 estimate for highest average resulting increase in housing value
4. Provides $1.5 billion in assistance for renters displaced by foreclosure
5. Gives Fannie Mae and Freddie Mac a $50 billion increase in allowable mortgage-backed securities
The plan goes into effect on March 4th. More shortly!
1. Aims to allow 4 million to 5 million homeowners to refinance mortgages
2. Establishes $75 billion fund to reduce homeowners' monthly mortgage payments
3. Sets $6,000 estimate for highest average resulting increase in housing value
4. Provides $1.5 billion in assistance for renters displaced by foreclosure
5. Gives Fannie Mae and Freddie Mac a $50 billion increase in allowable mortgage-backed securities
The plan goes into effect on March 4th. More shortly!
Thursday, February 19, 2009
Single Mother of 14 Faces Foreclosure
Okay...
This morning, I am on a radio interview for a Richmond, VA morning talk show. Now, I have been on the show before, and the host and I always have really good banter about foreclosure issues. He asked me on this morning to talk about President Obama's new foreclosure prevention plan, and I go in thinking I'm going to be giving details about the benefits of the Homeowner Affordability and Stability Plan and an outline of the requirements.
But, no.
He starts by asking me if people like Angela Suleman are going to benefit from the plan - "irresponsible" people who do not deserve a bailout from the government.
Now, to be honest, as much as I follow foreclosure updates, I don't follow much else in regards to news. Too negative for me. I had heard some talk in the ether about this woman who just gave birth to octuplets when she already had 6 kids at home and no income to support all of these people, but I didn't pay much attention to it.
Now, I'm paying attention.
Apparently, the home in which she planned to raise this tribe of folks is in foreclosure - about $23,000 and 10 months behind on mortgage payments. The home is owned by her mother, and Angela has been residing there before and after the pregnancy. I have no idea what their financial situation is, or what arrangement she has with her mother to assist with the mortgage payments, but...
Is she kidding? Is she TRULY serious?
When I step up to defend the American homeowner, I sometimes get this kind of behavior thrown in my face by folks who see the homeowner as the base of the problem. Now, I'm not going to step DOWN from defending and supporting people who truly were misled and got in over their heads, but this is ridiculous. I'm too baffled to even be angry... and it truly isn't my job to judge. But I am trying to understand what, to me, looks like the textbook definition of irresponsibility - you have six children. Six YOUNG children. Instead of paying the mortgage on the place you are staying, you spend who knows how much money on fertility treatments, have EIGHT MORE CHILDREN, and now have to find a way to house an support all of these people that you brought into the world.
IS SHE SERIOUS? I mean... come on.
This morning, I am on a radio interview for a Richmond, VA morning talk show. Now, I have been on the show before, and the host and I always have really good banter about foreclosure issues. He asked me on this morning to talk about President Obama's new foreclosure prevention plan, and I go in thinking I'm going to be giving details about the benefits of the Homeowner Affordability and Stability Plan and an outline of the requirements.
But, no.
He starts by asking me if people like Angela Suleman are going to benefit from the plan - "irresponsible" people who do not deserve a bailout from the government.
Now, to be honest, as much as I follow foreclosure updates, I don't follow much else in regards to news. Too negative for me. I had heard some talk in the ether about this woman who just gave birth to octuplets when she already had 6 kids at home and no income to support all of these people, but I didn't pay much attention to it.
Now, I'm paying attention.
Apparently, the home in which she planned to raise this tribe of folks is in foreclosure - about $23,000 and 10 months behind on mortgage payments. The home is owned by her mother, and Angela has been residing there before and after the pregnancy. I have no idea what their financial situation is, or what arrangement she has with her mother to assist with the mortgage payments, but...
Is she kidding? Is she TRULY serious?
When I step up to defend the American homeowner, I sometimes get this kind of behavior thrown in my face by folks who see the homeowner as the base of the problem. Now, I'm not going to step DOWN from defending and supporting people who truly were misled and got in over their heads, but this is ridiculous. I'm too baffled to even be angry... and it truly isn't my job to judge. But I am trying to understand what, to me, looks like the textbook definition of irresponsibility - you have six children. Six YOUNG children. Instead of paying the mortgage on the place you are staying, you spend who knows how much money on fertility treatments, have EIGHT MORE CHILDREN, and now have to find a way to house an support all of these people that you brought into the world.
IS SHE SERIOUS? I mean... come on.
Wednesday, February 18, 2009
Obama's Housing Plan: The Homeowner Affordability and Stability Plan
President Obama revealed the $75M plan designed to provide assistance to homeowners in distress - both those who are currently facing foreclosure AND those who are current on their mortgage. This program is scheduled to be available beginning March 4th.
Below are some initial questions and answers about the program from the U.S. Department of Housing and Urban Development (www.hud.gov):
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10. What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification
.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13. What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.
14. My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility. We support this effort.
Below are some initial questions and answers about the program from the U.S. Department of Housing and Urban Development (www.hud.gov):
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10. What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification
.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13. What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.
14. My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility. We support this effort.
Tuesday, February 17, 2009
PNC Joins the Moratorium Herd - Halts Foreclosures While Obama Plan is Finalized
PNC Bank announced today that they would also initiate a moratorium on foreclosures, joining the ranks of JP Morgan Chase, Bank of America, Citigroup, and others who announced their halt on foreclosures last week. PNC's moratorium is scheduled to go through March 13th as the nation awaits the announcement of the government's plan to stem the foreclosure crisis.
If you have a mortgage through PNC Bank (or National City Mortgage, which is now a part of PNC), call to see how this affects your loan.
Again, a moratorium does no one any good if action is not taken during the stay to rectify the situation, so make sure you are actively working on your household situation while the government creates and implements a plan.
More on Obama's plan when it is revealed tomorrow!
If you have a mortgage through PNC Bank (or National City Mortgage, which is now a part of PNC), call to see how this affects your loan.
Again, a moratorium does no one any good if action is not taken during the stay to rectify the situation, so make sure you are actively working on your household situation while the government creates and implements a plan.
More on Obama's plan when it is revealed tomorrow!
Monday, February 16, 2009
Major Lenders Halt Foreclosures, Await Government Plan
Several major lending institutions have followed Fannie Mae and Freddie Mac in instituting or extending current foreclosure moratoriums. The announcements and press releases are pouring in - Citigroup, JPMorgan Chase, Wells Fargo, Bank of America and Morgan Stanley have all agreed to halt foreclosure proceedings while the administration works out the details of its plan. In addition, Fannie Mae and Freddie Mac have agreed to extend their halt on foreclosure sales through March 6th.
MortgageOrb.com also reports that "regional banks have also jumped in, as BankUnited and BankAtlantic, both based in Florida, say they will not foreclose until the Financial Stability Plan’s loan modification program is finalized". President Obama is expected to talk about the program as early as Wednesday.
Although I am hesitant to celebrate, I realize this is a major relief to homeowners in distress, and we will all be waiting with baited breath while a plan is finalized. Remember to stay in your homes, however... I am sure that whatever program is announced will apply primarily to owner-occupied properties.
MortgageOrb.com also reports that "regional banks have also jumped in, as BankUnited and BankAtlantic, both based in Florida, say they will not foreclose until the Financial Stability Plan’s loan modification program is finalized". President Obama is expected to talk about the program as early as Wednesday.
Although I am hesitant to celebrate, I realize this is a major relief to homeowners in distress, and we will all be waiting with baited breath while a plan is finalized. Remember to stay in your homes, however... I am sure that whatever program is announced will apply primarily to owner-occupied properties.
Tuesday, February 3, 2009
Banks Have Tightened Lending Terms, Even After Bailout
Dear Reader...
We DID talk about this before, didn't we? I have said in the past that banks were going to be tougher on consumers and businesses, and requirements for home loans, HELOCs, and small business loans were going to be tighter. Well, now a recent Federal Reserve report confirms my suspicions - even AFTER the immense infusion of capital into American banks, loan restrictions were tightened in the 4th quarter of 2008. Banks say this is not a reflection of the bailout, but of the ever-weakening credit picture of American homeowners in the foreseeable future.
Check out the article on Bloomberg.
We DID talk about this before, didn't we? I have said in the past that banks were going to be tougher on consumers and businesses, and requirements for home loans, HELOCs, and small business loans were going to be tighter. Well, now a recent Federal Reserve report confirms my suspicions - even AFTER the immense infusion of capital into American banks, loan restrictions were tightened in the 4th quarter of 2008. Banks say this is not a reflection of the bailout, but of the ever-weakening credit picture of American homeowners in the foreseeable future.
Check out the article on Bloomberg.
Wednesday, January 28, 2009
The Launch of Foreclosure Exposure Radio on Voice America Business!
Do you know the do’s and don’ts when it comes to solving their personal foreclosure crisis in this current economy? With over 2,700 foreclosures occurring daily, what can homeowners do to ensure the housing crisis doesn’t hit home?
Tune into Foreclosure Exposure Radio on the Voice America Business Chanel!
Carla Douglin, national foreclosure prevention expert and author, will define several confusing foreclosure terms, break down the multi-faceted foreclosure process, and explore step-by-step solutions that homeowners can implement IMMEDIATELY to save their home or credit. Listen in to discover and demystify the latest foreclosure news and events, and understand what it means to you, the homeowner.
That’s right… this show is for YOU. Everything we discuss is designed to help you not only face foreclosure issues, but CONQUER them! We will delve deep into all aspects of foreclosure – not just the financials, but the emotional as well! – and provide solutions and advice rarely heard.
Tune in to Foreclosure Exposure Radio each Wednesday at 3PM Eastern/12PM Pacific and get the facts!
Tune into Foreclosure Exposure Radio on the Voice America Business Chanel!
Carla Douglin, national foreclosure prevention expert and author, will define several confusing foreclosure terms, break down the multi-faceted foreclosure process, and explore step-by-step solutions that homeowners can implement IMMEDIATELY to save their home or credit. Listen in to discover and demystify the latest foreclosure news and events, and understand what it means to you, the homeowner.
That’s right… this show is for YOU. Everything we discuss is designed to help you not only face foreclosure issues, but CONQUER them! We will delve deep into all aspects of foreclosure – not just the financials, but the emotional as well! – and provide solutions and advice rarely heard.
Tune in to Foreclosure Exposure Radio each Wednesday at 3PM Eastern/12PM Pacific and get the facts!
Monday, January 26, 2009
3.1 MILLION Foreclosure Filings in 2008!
Hello, dear Reader!
Been on travel for a while and have neglected my blog, but now we're back... and oh, how the news has packed a wallop!
First and foremost, the inauguration of our new President was one of the most exciting events in history! You could FEEL the energy of change in the air, and the way America celebrated was truly heartwarming and inspiring. The most important thing to remember, however, is that actual change takes time, planning, and commitment, so not everything is going to turn around TOMORROW. Let's watch and see how the new Administration handles the crisis. I believe that we will see positive changes in the housing market over the coming period, but that period may take years, and we should all be prepared for that.
As Obama's team initiates new legislation regarding the housing market, I will report it here and accept your comments!
Now, onto the big news.... 3.1 MILLION foreclosure filings in 2008!!! WHAT?
Now, I think we all knew it would be big, but that is an 81% increase from 2007, and a 227% increase from 2006! This is very telling - and even MORE telling is the fact that the 3.1M filings were on 2.3M homes. That means that several hundred thousand homes received MORE THAN ONE foreclosure filing... families faced the foreclosure block more than once.
This, however, doesn't even come close to the number of homes who JUST pulled it out in time - the number of families who came close to the foreclosure filing but were able to scrape the necessary funds together at the last moment. Those numbers are harder to track - the households that are living paycheck to paycheck and have more month at the end of the money.
This is a heartbreaking phenomenon!
Several states have initiated foreclosure moratoriums to slow the tidal wave, which affected last year's numbers. Fannie Mae and Freddie Mac have extended the holiday moratorium through the end of January, and one of Obama's talking points has been to institute a nationwide 90-day moratorium to assist homeowners in distress. You have read earlier posts from me discussing the importance of education throughout the stay, so I would urge homeowners to be prepared for that. If you are in a state that has enacted a moratorium, or if you have a Fannie/Freddie-backed loan, don't take this as a time of rest - this is really the time to be MORE diligent and rectify the financial situation that has caused the missed housing payments.
Remember - education is the key!
Been on travel for a while and have neglected my blog, but now we're back... and oh, how the news has packed a wallop!
First and foremost, the inauguration of our new President was one of the most exciting events in history! You could FEEL the energy of change in the air, and the way America celebrated was truly heartwarming and inspiring. The most important thing to remember, however, is that actual change takes time, planning, and commitment, so not everything is going to turn around TOMORROW. Let's watch and see how the new Administration handles the crisis. I believe that we will see positive changes in the housing market over the coming period, but that period may take years, and we should all be prepared for that.
As Obama's team initiates new legislation regarding the housing market, I will report it here and accept your comments!
Now, onto the big news.... 3.1 MILLION foreclosure filings in 2008!!! WHAT?
Now, I think we all knew it would be big, but that is an 81% increase from 2007, and a 227% increase from 2006! This is very telling - and even MORE telling is the fact that the 3.1M filings were on 2.3M homes. That means that several hundred thousand homes received MORE THAN ONE foreclosure filing... families faced the foreclosure block more than once.
This, however, doesn't even come close to the number of homes who JUST pulled it out in time - the number of families who came close to the foreclosure filing but were able to scrape the necessary funds together at the last moment. Those numbers are harder to track - the households that are living paycheck to paycheck and have more month at the end of the money.
This is a heartbreaking phenomenon!
Several states have initiated foreclosure moratoriums to slow the tidal wave, which affected last year's numbers. Fannie Mae and Freddie Mac have extended the holiday moratorium through the end of January, and one of Obama's talking points has been to institute a nationwide 90-day moratorium to assist homeowners in distress. You have read earlier posts from me discussing the importance of education throughout the stay, so I would urge homeowners to be prepared for that. If you are in a state that has enacted a moratorium, or if you have a Fannie/Freddie-backed loan, don't take this as a time of rest - this is really the time to be MORE diligent and rectify the financial situation that has caused the missed housing payments.
Remember - education is the key!
Monday, December 15, 2008
CBS 60 Minutes Report: Option ARM and Alt-A Mortgages are Next Foreclosure Tsunami
This was one of the scariest reports I have seen in recent days on foreclosures.
According to the 12/15 60 Minutes report, waves of Option ARM and Alt-A mortgages are about to reset. These mortgages had teaser rates of 1-2%, and will adjust to higher rates after 2, 3, or 5 years. With that understanding, mortgages acquired during the housing boom in 2005-2006 will reset over the next few years. Lenders are already seeing delinquencies on these mortgages, even BEFORE the teaser rates have expired.
For more on this story, follow this link: http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml
According to the 12/15 60 Minutes report, waves of Option ARM and Alt-A mortgages are about to reset. These mortgages had teaser rates of 1-2%, and will adjust to higher rates after 2, 3, or 5 years. With that understanding, mortgages acquired during the housing boom in 2005-2006 will reset over the next few years. Lenders are already seeing delinquencies on these mortgages, even BEFORE the teaser rates have expired.
For more on this story, follow this link: http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml
Monday, October 20, 2008
The Consumer Bailout That Nobody Knows About
This is a press release that was put out on October 1st by the CMPS Institute. Great advice and insight... important to use when working with your lending partner!
RISMEDIA, Oct.1, 2008: As congress considers various bailout proposals for the financial system, there is a little known ‘bailout’ for home owners that has already been enacted into law, according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure as long as three requirements are met:
1. Default on the mortgage either has already happened or is “reasonably foreseeable“
2. The homeowner is living in the property as his or her primary residence.
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.
“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” Nicholas said. Borrowers make their monthly payments to mortgage servicers, and servicers keep a portion of the payment as their profit while sending the rest to the Wall Street investors who actually own the mortgage.” This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.
When negotiating a loan modification with your mortgage lender, it is advisable to follow this four step process:
1. Make sure you are dealing with your lender’s loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances.
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. “The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan,” Nicholas said.
It may be advisable to consult with your attorney- especially if you qualify for a loan modification under the law and your lender still refuses to work with you.
RISMEDIA, Oct.1, 2008: As congress considers various bailout proposals for the financial system, there is a little known ‘bailout’ for home owners that has already been enacted into law, according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure as long as three requirements are met:
1. Default on the mortgage either has already happened or is “reasonably foreseeable“
2. The homeowner is living in the property as his or her primary residence.
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.
“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” Nicholas said. Borrowers make their monthly payments to mortgage servicers, and servicers keep a portion of the payment as their profit while sending the rest to the Wall Street investors who actually own the mortgage.” This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.
When negotiating a loan modification with your mortgage lender, it is advisable to follow this four step process:
1. Make sure you are dealing with your lender’s loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances.
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. “The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan,” Nicholas said.
It may be advisable to consult with your attorney- especially if you qualify for a loan modification under the law and your lender still refuses to work with you.
Thursday, October 9, 2008
Foreclosure Moratoriums... Short Term Solutions for Long Term Issues
Many people feel that the recent "bailout" bill doesn't do enough for American homeowners facing foreclosure. Non-profits and government representatives alike are calling for more help for Main Street, and one of the suggestions is a moratorium on foreclosures across the nation. People say that an across-the-board moratorium would allow homeowners more time to find a solution, create a workout package with lenders, and take advantage of proposed government programs.
I ALMOST agree with that, but there is a fundamental element that is missing from this suggestion.
Yesterday, I was interviewed on WPFW in Washington, DC. The phone lines were lit up with callers asking about their homes, their bankruptcy situations, their initial mortgage choices and mistakes, what they should say to lenders... information that is critical to assist them in saving their homes. I continue to see the extent of confusion people have about the process... confusion that does not go away with more TIME, but more EDUCATION.
Recent reports show that we are nearing 750,000 homes lost to foreclosure this year. There were more than 107,500 foreclosures in September alone - an 82.6% increase from this time last year. How many of those homes could have been saved if the owners knew what to do?
Many states have enacted extended timelines for homeowners facing foreclosure. They haven't, however, shown these homeowners WHAT TO DO in the mean time. This will result in an immediate dip in foreclosure numbers with a spike in filings and auctions in a month or two.
It's just a delayed sale, not an actual solution.
Now, if they implement an EDUCATION element to this delay, they may be able to do some actual good. People need information. Lenders are saying that people aren't calling in to find out what to do... this is true. However, in this crisis, with $700 billion dollars available to fix the issue, I think banks and servicing companies can afford to do a bit more outreach.
Education is the key.
I ALMOST agree with that, but there is a fundamental element that is missing from this suggestion.
Yesterday, I was interviewed on WPFW in Washington, DC. The phone lines were lit up with callers asking about their homes, their bankruptcy situations, their initial mortgage choices and mistakes, what they should say to lenders... information that is critical to assist them in saving their homes. I continue to see the extent of confusion people have about the process... confusion that does not go away with more TIME, but more EDUCATION.
Recent reports show that we are nearing 750,000 homes lost to foreclosure this year. There were more than 107,500 foreclosures in September alone - an 82.6% increase from this time last year. How many of those homes could have been saved if the owners knew what to do?
Many states have enacted extended timelines for homeowners facing foreclosure. They haven't, however, shown these homeowners WHAT TO DO in the mean time. This will result in an immediate dip in foreclosure numbers with a spike in filings and auctions in a month or two.
It's just a delayed sale, not an actual solution.
Now, if they implement an EDUCATION element to this delay, they may be able to do some actual good. People need information. Lenders are saying that people aren't calling in to find out what to do... this is true. However, in this crisis, with $700 billion dollars available to fix the issue, I think banks and servicing companies can afford to do a bit more outreach.
Education is the key.
Monday, October 6, 2008
Another Unfortunate Foreclosure Incident... Addie Polk's Attempted Suicide
Last Friday, a 90-year old woman in Akron, Ohio attempted suicide as sheriffs were coming to evict her from her property. Addie Polk was found by a neighbor in her bedroom - a long-barrel shotgun next to her on the bed, and her car keys, purse, and life insurance policy in plain view, suggesting that she meant to kill herself.
This incident is just one of the many examples of people who feel that extreme measures are the only way to solve their extreme financial issues. The story was so shocking that the Democrats mentioned it while debating the "bailout" bill on Friday, even saying that "the bill does nothing for the Addie Polk's of the world."
Thankfully, Fannie Mae has agreed to forgive the debt on Ms. Polk's home and give her the property free and clear. But look what had to happen in order for her to achieve this! Without knowing the details of her circumstance, so many questions come to mind... what has happened to the state of the union where a woman in her nineties is STILL responsible for a mortgage? Many people have spoken up since the incident went public, but where was her community BEFORE she shot herself? What resources did she have to help her avoid this situation? Did she reach out for help before deciding this was the only way out?
I don't think the answers will be available until after Addie is released from the hospital. Currently, she is still in critical condition.
I hope this is a wake up call to people... you MUST reach out for help if you feel that you are at the end of your rope. Death is never the answer.... such extremes are an example of short-term thinking. There is ALWAYS another solution.
This incident is just one of the many examples of people who feel that extreme measures are the only way to solve their extreme financial issues. The story was so shocking that the Democrats mentioned it while debating the "bailout" bill on Friday, even saying that "the bill does nothing for the Addie Polk's of the world."
Thankfully, Fannie Mae has agreed to forgive the debt on Ms. Polk's home and give her the property free and clear. But look what had to happen in order for her to achieve this! Without knowing the details of her circumstance, so many questions come to mind... what has happened to the state of the union where a woman in her nineties is STILL responsible for a mortgage? Many people have spoken up since the incident went public, but where was her community BEFORE she shot herself? What resources did she have to help her avoid this situation? Did she reach out for help before deciding this was the only way out?
I don't think the answers will be available until after Addie is released from the hospital. Currently, she is still in critical condition.
I hope this is a wake up call to people... you MUST reach out for help if you feel that you are at the end of your rope. Death is never the answer.... such extremes are an example of short-term thinking. There is ALWAYS another solution.
Thursday, October 2, 2008
About the Hope For Homeowners Program... Are Lenders Game?
Steve Preston, Secretary of the Department of Housing and Urban Development (HUD), recently stated that lenders are "required" to make mortgages more affordable under the Hope for Homeowners program. But are lenders really game for the change?
I have been hearing more and more that lenders are becoming harder and harder to work with. Clients aren't getting through to the correct departments, workout proposals are increasingly denied, and short sales are a thing of the past. What would entice a lender to actually agree to a workout proposal?
In truth, a bank loses 25-40% of the value of a home if the property goes into foreclosure. The fees expended through foreclosure proceedings alone are enough to persuade a lender to participate in the program. Even though the program is short-term and may only assist a handful of people, lenders should use this opportunity to assist the homeowners who reach out to restructure loans to more affordable payments so they can continue their financial obligations.
This creates a win-win for homeowners who qualify and lenders who participate. Families get to stay in their homes, and lenders get the payments those homeowners agreed to.
I have been hearing more and more that lenders are becoming harder and harder to work with. Clients aren't getting through to the correct departments, workout proposals are increasingly denied, and short sales are a thing of the past. What would entice a lender to actually agree to a workout proposal?
In truth, a bank loses 25-40% of the value of a home if the property goes into foreclosure. The fees expended through foreclosure proceedings alone are enough to persuade a lender to participate in the program. Even though the program is short-term and may only assist a handful of people, lenders should use this opportunity to assist the homeowners who reach out to restructure loans to more affordable payments so they can continue their financial obligations.
This creates a win-win for homeowners who qualify and lenders who participate. Families get to stay in their homes, and lenders get the payments those homeowners agreed to.
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