Non-Profit Agencies Help Homeowners Buy Back Their Foreclosed Homes

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.

Tomorrow on Foreclosure Exposure Radio: Rebuilding Your Credit

So, you have either gone through foreclosure or come very close to it. If you have missed three or more payments on your mortgage, your credit has been severely affected. How do you rebuild your credit score after foreclosure, and why is it so important?

Tune into Foreclosure Exposure Radio tomorrow at 3PM Eastern/12PM Pacific to hear a step-by-step plan of action for boosting your credit score and the steps you must take to ensure it does not dip in the future. Joining me is Terrence Johnson of Blue Point Financial Alliance – this is an episode you don’t want to miss!

Tune in each Wednesday at 3PM Eastern/12PM Pacific on VoiceAmerica’s Business Channel! Missed a show? Listen to the archives at www.foreclosureexposureradio.com!

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:

• 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.

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.

How to Stall Foreclosure: Ask the Bank to Produce the Note!

A few months ago, I wrote a post about how to stall foreclosure by asking the bank to produce the ORIGINAL mortgage note to prove the validity of their ownership. Now, the Associated Press has done a story on how homeowners across the country are using this tactic to save their homes.

See the story here: http://www.google.com/hostednews/ap/article/ALeqM5hLOuvy9fguykC2NydTDrkqqyybvQD96DHN5G0

The AP reports, "...homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess. During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed. Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage."

Some mortgage companies have electronic versions of documentation, and judges are accepting this as proof of the bank's ownership. But for those homeowners whose lenders do not have the original paperwork (which happens more than is realized), you can use this to force the bank to renegotiate your mortgage!

Read the article and see if this can work for you.

Moving In with Family or Friends After Foreclosure

The livelihood of Americans has been affected dramatically by the housing crisis. After families have been displaced by foreclosure, many people have no other choice but to move in with family or friends. This will change the family dynamic drastically over the next few years, and has the possibility of both positive and negative affects over the long term.

On the negative side: No matter how much we love our friends and family, there can be deep emotional regret after foreclosure that can taint the household mood. Not only did you just lose the house that you loved, but you are moving into someone else's house, living by their rules and according to their schedule, and feeling that you could be a burden, no matter how sincere their offer to let you stay. This is the time to watch your own mood to ensure you do not slip into a depression or anything that looks like a "poor me" mode - instead, use this as an opportunity to reset and rebuild.

On the positive side: This gives family and friends a great opportunity to change the family dynamic. Homeowners who have had to deal with foreclosure often feel isolated - this is an opportunity to pull together to share responsibilities, feelings, and obligations. People coming together in a time of need is what community is all about, and financial education can be a tool that can further the position of not only the affected person, but everyone in the new household. Get together to create a new financial blueprint for the new household, and you will see how everyone involved can prosper.

This is a time where American communities must pull together to make it through this catastrophe. Do not be ashamed to reach out for help, and, if someone reaches out to you, lend a hand any way you can. If you need to move in with a parent, brother, friend or relative during the crisis, take advantage of the situation by making a concrete plan, including a timeline, to get you and yours back on your feet. Examine your finances, pull your latest credit report, make a spreadsheet of your debts, and put a plan into action.

Most of all, thank the person who took you in. Acknowledge the blessing, and be thankful for those who are there to help.

The Housing Market: Is it a Good Time to Buy?

Recently, on an interview that I did for Weekend Today in New York, the anchor asked if it was a good time to buy property. I said yes, but only if you buy SMART, especially if you are considering buying a foreclosure. Even though there are ample foreclosed properties on the market, watch out for the baggage that may come with them. Specifically, any damage to the property that you would be responsible for, and buying in states that have redemption periods after foreclosures. The previous owner would have the right to regain their property if they paid the full restitution amount and your expenses, leaving you to find another property to live in.

Some additional tips for buying real estate in this market:

1. Carefully research housing values: Housing values may continue to adjust over the next year, so do careful research when it comes to choosing a home. Ensure you a buying a property in a neighborhood that has not been decimated by foreclosures – it may seem like a deal today, but if the values keep dropping, you may have paid more than you needed to. It may be a while before the value of the property begins to appreciate.

2. Prepare for your mortgage qualification. In today’s housing climate, lenders are getting stricter when it comes to approving a loan. Ensure that you have planned effectively for a meeting with a prospective lender – check your credit score, save generously for a down payment, ensure that your current debt to income ratio is below 35 percent, have hard copies of 6 months worth of bank statements and obtain written verification of your employment history.

3. You’d better shop around: With interest rates being low, shop around for a lender who will provide you with the best terms and incentives for your pocketbook. Additionally, find your mortgage BEFORE you begin looking for a property. Instead of falling in love with a house first, ensure that you secure a loan whose terms are within your means, and then find a house that fits with your financial picture.

4. Opt for a fixed rate: A fixed rate mortgage allows you to plan for the long term. If you are just beginning to budget, having your house payments remain the same over the long term increases the probability of remaining on track. If you have an adjustable rate mortgage, ensure that you project early and accordingly for the financial adjustment.

5. Buy smart and plan for your future: Do NOT buy more house than you can afford, and budget conservatively for monthly expenses. Even you hate the “B” word, it is important to apply a budget to your household finances. Creating a conservative financial plan that allows for a sufficient savings cushion, expense allowance, and a bit of spending money will create a foundation that stands up to emergencies.

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.

Foreclosure Crisis Creates an Opportunity for Reassessment

Not only is it the perfect time to reassess your income, expenses, cash reserves and investment portfolio, the economic crisis has created a great opportunity to lower your property taxes by contesting your recent tax assessment. The BluePrint for Financial Prosperity blog outlines the following tips:

Build a case for a lower property assessment and do it quickly: Most places have a time limit for an appeal, Money says 60 days it the norm but I’ve seen places with 45 days and 90 days. Your case will be based on how your county assesses home value. If they use comparables, get some comparables and use them as ammunition (get 5-10, more is better).

Meet with the assessor first, then file an appeal: If you can convince the assessor that he or she assessed your home higher than he or she should have, it’ll help your case when it comes time to appear before the review board because they’ll be there. If you convince them, they’ll put up less of a fight. At the appeal board, prepare an 8-10 minute presentation with pictures of the comparables and a spreadsheet of the data. Think about what you would want to see if you were on the board. If you’ve done your homework, act professionally, then you have a good shot.

For more information, read the full blog post here! Great data (and more in the Money article referenced)... take action on it immediately!

Foreclosure FAQ: Can I Buy A House After Foreclosure?

A lot of homeowners who have been through foreclosure wonder when they will be able to buy a home again. Let me say it's not an easy task, but not impossible.

The first thing to consider is that a foreclosure stays on your credit report for 7-10 years. However, lenders usually look at the last three years of credit when considering a mortgage approval. It is important to start planning your credit rebuild immediately to pad the foundation of your financial picture. Start with a secured credit card, on which you only spend and pay off 30% of the allowed credit limit each month. Next, get an apartment and stay there for two years. Pay your rent on time EVERY month and use the favorable review from the landlord as a good credit reference.

The second thing to think about is your down payment. It will be critical to put down as much money possible if you want to go towards the traditional mortgage route. Since the foreclosure is going to be a consideration factor, start saving for a 20% down payment.

Next, be CONSERVATIVE when it comes to choosing your next property! The Taj Mahal will not be in your budget... talk with a Realtor to realistically plan how much house you can afford, and then consider looking at houses BELOW that threshold.

The most important thing is to plan your finances and be disciplined with your spending and saving goals. You can rebuild your life... it just takes practice and focus.

Good luck!

Foreclosure Consultants vs. Housing Counselors... Which Way Should Homeowner's Go?

A recent blog posting in the Baltimore Sun has me thinking.

Jamie Smith Hopkins – writer of the Real Estate Wonk – posted a story about the dangers of paying foreclosure consultants to create workout solutions. In her opinion, homeowners should reach out to certified, non-profit housing counselors to get free advice and assistance instead of paying for help. In the story, Bill Gruhn, chief of the attorney general's consumer protection division, says, "We have several suits currently pending against people who were purporting to offer foreclosure rescue and in fact took the houses," He also states that homeowners should list their property on the market with a Realtor instead of entertaining an investor proposition.

It is imperative in these days and times that homeowners have the most education and information possible to make the correct decision about their property. Although housing counselors provide a great resource for pre-foreclosure families, not all housing counselors are trained well enough to provide the information homeowners need to weigh all the options they have available. In addition, we are all hearing about the lack of counselors available to those in need due to the increase in pre-foreclosures.

I agree that there are foreclosure consultants who are not working in the homeowner’s interest. There are also “consultants” that have agency with investors and only work to feed properties to those interests. However, this is against the law – SB761 was initiated to regulate foreclosure consultants and provide structure to investor sales and protection for the property owners. This is the information homeowners need more education about – the rights and protections they have under the law.

There are also investors whose sole purpose is to scam a homeowner out of their property. However, this is not always the case. When Mr. Gruhn says that homeowners are better off selling their home on the market, this is not always an option. There are investors who will buy a property in as-is condition and provide a solution that a market sale would not.

It is important that homeowners have the education necessary to empower them to face their foreclosure situation. When this is in place, a homeowner can utilize the services of a housing counselor more effectively and create a plan that will truly help. They will also have the savvy to deal with any third party that offers services or assistance. If not, then going to a housing counselor, sufficiently trained or not, will be a waste of time.

New DVD Helps Homeowners Avoid Foreclosure

The record number of American homeowners facing the prospect of foreclosure can now find the help they need with The Foreclosure DVD: The Homeowner’s Guide to Understanding Foreclosure and Saving Their Home.

The DVD guides homeowners through a proven, easy-to-apply system for saving their home and/or their credit. The new 45-minute educational video is a companion piece to The Douglin Group’s recently released publication, The Foreclosure Workbook. The materials are available as a package online at foreclosurehelpdvd.com.

Together, the DVD and Workbook instruct and encourage distressed homeowners to understand their finances, and then navigate them step by step through the foreclosure avoidance process. Homeowners will also gain critical information such as the most common foreclosure scams to watch out for, and what most people don’t know about using bankruptcy to fight foreclosure.

Whether you're one month behind or facing an auction, get the DVD and Workbook now!

A New Way to Fight Foreclosure... Make the Bank Prove They Own Your Property!

Does the bank REALLY own your property?

Many homeowners find themselves transferred to and from several different servicing companies over the life of their loan. During those transfers, are you certain the bank has all the paperwork proving that they own your home?

The actual proof that a bank owns your property and that a homeowner owes the debt is called a "promissory note". If your bank cannot produce the promissory note that proves they own the property, you can ask an attorney to stall a foreclosure until the evidence is shown. Unfortunately for the lender, documents are lost and/or destroyed approximately 40% of the time!

Last November, a federal court ruled that Deutche Bank could not foreclose on a group of homes until they produced the appropriate documentation proving ownership and debt. As of June 16th, those foreclosures are still on hold.

Check it out. See if the bank can produce the documents. If they cannot, take action to stall your foreclosure!

Yet Another Reason to Read the Fine Print...

I'm shaking my head at this very moment, dear Reader.

In today's Washington Post, there's a great article entitled, "If You Walk Away, Expect to Pay". The article discusses how the decline in the housing market is causing contract cancellations for new homes, and builders are feeling the hit. So, as an incentive for would-be buyers NOT to cancel, they are adding promissory notes to their contracts. The contract states that not only does a buyer rescind their right to their deposit money, but they OWE additional funds - sometimes as much as the deposit - if they back out of buying the home.

Now, if you have ever bought a home in a new development, you know that you may not even get to see the contract until you are about to sign it. The promissory note is a part of the contract, however, the builder is not obligated to point out this addition. If you don't read it, it doesn't matter - you have still signed the contract and are obligated to pay if you don't end up buying the property.

This is a HUGE oversight for homeowners who are facing foreclosure. One of the reasons people have backed out of these contracts is because they were unable to sell a home they already had. I have had several clients move back into a home they were trying to sell and cancel a contract on a new property to avoid foreclosure. But would you do so if you knew you were going to lose your deposit AND pay thousands more?

You would then be between a rock and a hard place, especially if you were looking to use the deposit money to avoid foreclosure proceedings.

The article points out options for would-be buyers who need to cancel a builder contract. Read the article, and make sure you ALWAYS read the fine print!