Possible Financial Relief--FROM THE BANKS!?

Well, for those of you who have lost your home to what you feel is an improper foreclosure, there may be some financial hope on the horizon. A fund has been established by a number of major lenders as a way for them to try to avoid liability in cases of suits over improper foreclosures.Participants include Bank of America, JP Morgan Chase and Wells Fargo. The fund is aimed at providing compensation to those who can prove that their foreclosure was improper. Admittedly, proving such a thing is not going to be a slam dunk, but at least the fund is there, although the details are still being finalized as to who and how someone might successfully receive compensation from the fund. One of the details being considered is whether lenders who improperly foreclosed would have to make a legitimate new attempt at doing a loan mod for the homeowner who'd lost their home, and, if so, would those mods require that the principal balances of the loans be written down in value.

Of course an interesting thing to consider is what if your home was improperly foreclosed and the bank is willing to reconsider a loan mod for you, but, unfortunately, they sold off the foreclosed home already? Do they have to buy you a replacement home? Do they merely reach a settlement with you for the value of your home? Do they allow it to proceed to litigation, with the courts deciding what is a proper settlement? These are all questions that need answering. You may wish to consult an attorney. If/when we hear some further info, we'll also post it here.

Meanwhile, Good Luck!

Nevada Sues BofA

In a move similar to one made last week by Arizona, the state of Nevada has filed suit against Bank of America alleging consumer fraud in its mortgage servicing procedures. Most of these allegations centered around alleged actions by BofA relating to potential loan modifications for clients facing possible foreclosure. Some of these borrowers apparently were foreclosed upon. If you live in Nevada and have a situation where your mortgage is/was with BofA and you feel you may be similarly involved, call your attorney, or, if you have no attorney, call Legal Aid.
Good luck.

Possibly Some Good News in Arizona

Don't start counting any money yet, but yesterday the Attorney General of Arizona filed suit under Arizona's consumer fraud law against Bank of America. The suit accuses the bank of violations of the law in two areas. First, BofA is accused of misleading consumers in the state by having them continue to make mortgage payments while BofA allegedly claimed it (the bank) was working on loan modifications for the homeowners. Instead, in many cases allegedly, the loan mod never happened, in spite of the borrowers' good faith payments, and the bank foreclosed on the homes anyway. After an absolute flood of complaints by consumers was made to the Attorney General's office, an investigation was initiated over a year ago. This led to a lengthy round of settlement talks between the state and the bank, which commenced in April of 2010. These negotiations continued for months, but finally failed, collapsing on December 10.

According to the Attorney General, Terry Goddard, the bank also allegedly violated the existing terms of a consent agreement arrived at in 2009 that required BofA's subsidiary, Countrywide, to create a loan mod program.
What does this mean for you if you're a homeowner facing foreclosure or already foreclosed upon by BofA/Countrywide? It's difficult to be certain at this stage. First, some result will have to be reached, and, as with anything in legal action, that can take any amount of time from a few months, if settlement can be quickly reached, to years, if it has to go through the whole legal process, including appeals. Also, it will depend on whatever the terms of any final settlement or decision end up being. Does a homeowner receive monetary damages, get their home back, or what? At this stage, there's no way to determine an answer.

So, you ask, what's so good about this? Well, the short answer is that you have the power of a state government, with far more resources than any individual, going up against the bank. At least someone has taken the initiative and gotten a ball rolling. For the ultimate result, we'll have to wait and see.

Good luck to everyone potentially involved. To the more general readership of this blog, here's hoping the Holiday season is a happy one, and the New Year brings you all you seek for you and your family and loved ones.

Fannie's Helping

If you are someone whose mortgage is backed or held by Fannie Mae, I've got a bit of good news for you. Fannie has just launched a website to assist any homeowners currently behind on their payments or facing foreclosure. It's called Knowyouroptions.com and the web address is, obviously, www.knowyouroptions.com . it intends to provide good basic advice on subjects such as how to stay in your home and avoid foreclosure, or, alternatively, sell and avoid foreclosure. It also will list local foreclosure prevention event sin your area,counseling on housing, Fannie Mae resources, information on your credit score, as well as a whole bundle of forms, instructive videos and calculators, to mention just a few things. If that's not sufficient for you, the site also will provide good advice on recognition of and avoidance of the many foreclosure scams currently circulating that all are trying to separate you from your home illegally and NOT provide the claimed help they loudly trumpet they'll provide.
Hopefully, this will help those of you tied to Fannie Mae. Good luck!

This May Help

While it is somewhat dated by subsequent events and new programs, there is a good basic text for creating a program to help avoid foreclosure. Written in late 2008, the book is "Save Your House From Foreclosure!", and is available through many outlets such as Amazon.com, Booksamillion.com and BarnesandNoble.com. It is deliberately short, under 70 pages, but, hey, I figured when I wrote it that someone facing the terrible specter of foreclosure doesn't have either the time or interest in reading War and Peace to possibly find a way to save their home.

Give it a shot--it can't hurt, and may help.

Good luck!

Some Help From The Stagecoach

For those of you with mortgages at Wells Fargo and facing foreclosure, the stagecoach (Wells) has announced a revision of its policies if you're working to avoid foreclosure by doing a short sale. Very specific, these changes stipulate that a foreclosure will be postponed if you meet two conditions:
1.)You must have received and provided to Wells an approved short sale contract with a buyer;
2.) The short sale must close within 30 days of the scheduled foreclosure date.

These rules may help some of you if you and your Realtor can get a contract from a buyer for a short and get Wells to approve it. You and your Realtor should check very closely and without delay with Wells on getting the approval.
Good luck!

Separately, for all of you who find themselves facing possible foreclosure and/or short sale of your home, I extend this Thanksgiving wish. It is that next you can hopefully resolve your present situation successfully, and that next Thanksgiving will find you and yours in a happier more joyful situation. Meanwhile, a sincere heartfelt wish for a happy Thanksgiving.

Good News for D.C.

The DC mayor, Adrian Fenty has just signed an amendment to the District of Columbia Official Code. Among these changes is a requirement that all foreclosure procedures include a very specifically worded 'foreclosure mediation' process. This mediation between bank and homeowner MUST be observed before any foreclosure can proceed. Failure to do so, according to the statute, is grounds for voiding the foreclosure. The steps in this mediation procedure include completing a number of forms to get into the mediation, and payment of a $50 fee. If you have questions, you should contact an attorney and/or your lender. If you cannot afford an attorney, call Legal Aid for advice.

Good luck and a very happy Thanksgiving!
Peter

Hope Down The Road

Today, a brief encouraging note for folks already foreclosed and hoping to someday again qualify for a mortgage to buy a home. The standard wisdom on how long your credit is harmed by going through a foreclosure is a minimum of five years! In other words, get foreclosed, don't even bother trying for a mortgage for at least that long. However, as we move through the current economic crisis, there is some glimmer of light at the tunnel's end--and it's NOT a train coming your way down said tunnel.

If, after three years, all of your credit history EXCEPT said foreclosed mortgage is pristine, and i DO mean pristine--not even a single late on ANY other debt/credit obligation, you may be able to get approval on an FHA loan. Why? Because this type of loan only requires a 3.5% down payment, and thus, you have somewhat easier qualification standards to meet. It won't be easy, but it is a possible slight easing for you. REMEMBER HOWEVER: when I say 'pristine' credit, I REALLY mean exactly that.

Good luck, and a happy thanksgiving to everyone!

A Few Things of Note

This week, the authorities in Florida announced that under Federal programs recently rolled out, they are commencing a program to assist unemployed homeowners keep their homes. Initially available only in Lee County, the Florida Housing Finance Corporation will take the program statewide early next year after reviewing its operation in the Lee County market.The initial Lee County 90 day program will be operated in two formats. One, the Unemployment Mortgage Assistance Program (UMAP) will provide full mortgage payments directly to the lenders in behalf of unemployed homeowners for up to 18 months. The second format, Mortgage Loan Reinstatement Program (MLRP) will help get homeowners already delinquent current on their loans if they have recently gotten employed. For info, check the Florida Housing Finance Corp.
Separately, if your mortgage is with Wells Fargo and you're facing foreclosure, demand a 'sitdown' with someone at Wells. Originally, Wells had commented that it was satisfied with its documentation review methodology and wasn't facing issues similar to those announced recently at Chase and BofA. Wells, consequently, didn't suspend any foreclosures. Now, Wells has issued a statement that while they feel all foreclosures are (and were) done properly, they have found "errors" in some notarizations of foreclosure-related documents and are going to submit new affidavits in all 55,000 cases where this occurred. They specifically said that the foreclosures involved are legitimate and they do not plan to suspend the foreclosures involved. These are in the 23 judicial foreclosure states. Check with your attorney if you have not done so to see if you may be involved.
For everyone facing this issue, as always, hope this helps and Good Luck.

Bank of America Halts Foreclosures!

Succumbing to legal and political pressure, Bank of America announced today that it suspending ALL foreclosures in the entire country until further notice. What this means is that BofA will no longer foreclose on any homeowner until it has had the time necessary to review ALL title and foreclosure documents on all of its mortgages to be certain that these docs are the correct ones and that they have been correctly completed and signed. How long this will take is anyone's guess, but the suspension begins tomorrow, Saturday, October 9, 2010.

There are hints that other large players in the home mortgage industry may also undertake such a policy, but thus far none have actually done so. Stay alert for further info in your local newspaper, TV, on-line or, of course, HERE!

Good luck!

More Relief in Michigan

In addition to one of the most storied football rivalries in the nation, UM vs. MSU, the state of Michigan has something else to help Michiganders who are having trouble making their mortgage payments because they're out of work. Called the Michigan's Hardest Hit Fund, it is an attempt by the state's Housing Authority to help unemployed homeowners make their payments. It is designed to cover up to half of a homeowner's monthly mortgage payment, and will provide this assistance to eligible borrowers for up to twelve months. Chase Bank has announced it will partner with the state to help out its mortgage customers. By the way, eligibility does NOT require the homeowner be behind in their payments. Perhaps the mortgage is getting paid, but while doing so, the lack of income is being felt in some other area of the family budget--other loans or financial obligations, food, utilities bills, medical care--you name it. Under this program, the assistance will help ease the strain by covering half of the mortgage payment.
Separately, Chase also has counseling centers set up in Troy and Detroit to help provide counselors to various outreach programs in those areas.
Mortgage with Chase? Call them now if you are unemployed, and Good luck.

Connecticut Leads The Way!

Not only does the Nutmeg State have the best women's basketball team in the country, but last week it took the lead in dealing with the issue of possible illegitimate foreclosure actions by banks. As those of you who follow this blog are already aware, many defaulted mortgages, as well as subsequent foreclosures, are being called into question across the country as more and more often it is being discovered that documents proving a lender's right to foreclose either don't exist or have nothing to do with the lender wishing to foreclose. Some states have established moratoria on foreclosures in a limited way, while other states have seen specific banks say they are suspending foreclosures while they review relevant documents and loan portfolios.

Not Connecticut! The Attorney General of the state, Richard Blumenthal last week announced a total, as in complete, no exceptions, moratorium on ALL BANKS regarding foreclosures in the state of Connecticut. The freeze on foreclosures will last 60 days, and could be extended beyond at that point if the situation warrants it. If you live in Conn, call your attorney for further advice. No lawyer, call Legal Aid.
Good luck!

BofA Backs Off On Foreclosures--A Little

Echoing recent similar actions by a couple of its major home mortgage rivals, Bank of America announced yesterday that it would suspend final foreclosure actions (the actual foreclosing and subsequent eviction of occupants) for the time being in a number of its areas of operation around the country. They are taking this action in states where foreclosure is handled by judicial action only. This means that if you are not located in a state where such form of foreclosure is an option, you fall outside this moratorium by BofA. There are 27 states that do not have judicial action as a form of foreclosure, including California. But, there ARE 23 states that do have this option, so you may have some good fortune here.

The reason for this action by the bank is in cases of BofA having difficulty verifying it has the legal and documentary right to foreclose on a particular property, it wants the ability to locate and verify it has legal rights of foreclosure backed by the appropriate related documents before proceeding on these foreclosures. This has increasingly become an issue in many areas of the nation not only for BofA, but for many other lenders as increased numbers of loans were sold and resold in various parts of the secondary and/or securitized markets.

Advice to the homeowner potentially facing foreclosure, regardless whether your loan was made by BofA or not, be prepared to challenge the action by the bank by forcing them to produce the relevant mortgage docs (promissory note and/or loan agreement). No docs from the bank may mean no foreclosure, or at least a long delay while they attempt to locate them.

Good luck!

Hope in Congress

Hope, and that's all it is at this point, for some loan mod help is showing up in Congress. A vote is possible on a bill that would mandate a loan modification decision before a foreclosure could proceed. Whether it finally happens and when is an open set of questions, but apparently, both are getting serious consideration by the folks in DC. Stay tuned and good luck.

Florida Fares Well with Fannie!

A while ago, last December, in fact, the Florida Supreme Court ruled that lenders had to have mediation sessions before finalizing a foreclosure or a summary judgment of judicial foreclosure. In line with this decision, Fannie Mae has now announced that its administrative guidelines for such activity will require that any such lender with a Fannie Mae backed loan refer any loans on Florida property to an attorney from Fannie's retained counsel mediation network BEFORE instituting foreclosure proceedings. This provides anyone with a Fannie loan on Florida property some additional opportunity to go through the mediation process as part of the effort to resolve the problem without automatically losing the property to foreclosure. Check with your lender or attorney for more details as to how exactly this applies to you if you are a Florida property owner in this category. Good luck.

Possible Help If You're Underwater

Well, an item we discussed previously is now up and running. The FHA's program to help those who are underwater (owe more than the home is worth) went into effect on Tuesday, September 7. Basically, it is directed at non-FHA borrowers, and aims to offer FHA-guaranteed refinancing of their existing loan. While it will NOT help all homeowners who are in this situation, estimates range from 250,000 to 1.5 million owners that will be helped.
The way it will work is that FHA will provide FHA-guaranteed refinance loans to homeowners who are in a negative equity position, and whose existing lenders will agree to write of a minimum of ten percent of the presently existing loan balance.

Comment: This is an excellent opportunity for those who qualify! My advice: Call both HUD and your lender TODAY!
Good luck!

Is Your Loan Held by MERS?:Possible Salvation

Those of you who follow this site regularly know that I don't normally encourage litigation unless there has been some egregious behavior on someone's part. However, in today's posting, I am going to make an exception because this information is so important. Although most people don't know it, there is a system out there that acts in behalf of mortgage lending institutions and holds the mortgages. Named the MORTGAGE ELECTRONIC REGISTRATION SYSTEM, or MERS, it allows mortgages to change hands from bank to bank without any recordation of these changes in the mortgage to ever be made. It sounds like a great idea, until you stop and realize that it almost never appears to actually have the mortgages under its own name and is only in essence holding them for some bank. "So what", you ask? Well, here's what! A recent California court case has held that this convenient electronic device the banks created effectively prevents the underlying banks to prove their ownership of titles and thus, also precludes their being able to foreclose on said properties! How does that sound?
So how does this relate to you and your mortgage if you are facing foreclosure? Well, MERS has over 62 million mortgages currently held in its name--loans that it never had anything to do with making!
The California case, decided on May 20, 2010, is called In re Walker. In it the court held that MERS couldn't foreclose because it wasn't the lender, held no lien rights and was just a 'nominee', someone standing in for the lender. Because of that the real lender, Citibank, couldn't foreclose because MERS had the loan on its books.But since MERS had no proof whatever that it didn't own the actual mortgage note (the legal proof of the debt), it had no interest in those same notes to pass to Citibank to lat Citi foreclose. If you don't own the legal proof of the debt, the promissory note, you can't pass on the right to foreclose under that note.
In case some of you out there are thinking this is just another example of California craziness, the judge cited as precedent cases from the appellate courts of Kansas, New York, and Ohio.
MERS has been the target of these problems in many earlier cases as well. But these earlier cases usually found fault with MERS because MERS was unable to actually produce the legal evidence of the debt, the promissory note, to prove it had the right to foreclose. Same principle: no note, no foreclosure right.
If you live in Florida, you may be interested in hearing about an attorney with Legal Aid who has been helping homeowners avoid foreclosure since 2004 using this same argument about the missing promissory note. April Charney says over five years later she still has a number of homeowners living in their homes because of her efforts fighting 'no note' foreclosures. She's now taking this to the next level by helping many of these same homeowners to take action in court to regain full title to their homes through what are called "quiet title" lawsuits. In case you have similar problems and don't live in Florida, Charney says she's trained many attorneys across the country to use these methods to help their homeowning clients avoid foreclosure.
For more info, you may wish to contact Charney. She's based in the Jacksonville Area Legal Aid office, and can be found online at their website: www.jaxlegalaid.org . Separately, you could also contact Ellen Brown, the author of a very detailed article from which much of my info has come, for YES MAGAZINE. Additionally, you may wish to check out the tale of Richard Davet, who stalled the Bank of America and related institutions for over ten years in his fight to avoid foreclosure. Though finally losing, his action proves that, at a minimum, one can use the courts legitimately to delay the bank's takeover of a home, and, at a maximum in some cases, stop the foreclosure cold.
Good Luck!

More Helpful Info

The FHA has announced that it will introduce a program of FHA-insured mortgages beginning September 7 to slow foreclosures further. Available to homeowners who have loans that are not currently FHA-insured, these should help further stem the REO tide. Basically, they will be made available to homeowners who are still current on their mortgage payments, but whose home value is less than the mortgage still owed. One further condition is that the existing lender has to agree to write of 10% of the current principal balance. Check with your lenders or directly with the FHA for more info. Good luck!

Good News in NC,SC,Ohio,RI and Oregon

The Obama administration has approved the state housing agencies in these five state using Federal funding to help further their own foreclosure avoidance programs at state level. Total Federal funding to be used in the programs is about $600 million. Check with your local housing agency if you live in any of these states and are facing possible foreclosure. Good luck!

Mortgage Payment Assistance

In addition to various previous payment assistance plans for those unable to make their mortgage payments, Congress just this past week added another source of funding to the list of help for struggling homeowners. Included in the new financial regulations bill that became law last week, the program, Emergency Mortgage Relief, makes loans available from the Federal government to homeowners who are unable to pay their mortgage loan payments. It is specifically directed at those at least three months in arrears on their payments, and will provide loans up to a maximum of $50,000 for coverage of these payments. The reasons for the delinquency must be either unemployment or medical problems that have caused the delinquency on the mortgage. The loans will be made available beginning October 1 of this year from the U.S. Department of Housing & Urban Development (HUD). You can find them in the 'Government' pages at the front of most phone books today or go online: www.hud.gov . Good luck!

BofA Help in Massachusetts & Florida

Well, readers, this week Bank of America has announced more assistance for some of its customers. They have opened OutReach Centers in Dedham, MA and Ft. Lauderdale, FL to provide assistance to home borrowers who are having trouble making mortgage payments to the bank. In order to get the maximum benefit in each case, individual private appointment will be used by the bank to assist the borrowers. If you're in South Florida or Massachusetts, and have a mortgage with BofA, call. This may be the call that helps you save your home. Good luck!

Healthy California Trend

According to Foreclosure Radar, the month of June evidenced a healthy trend in foreclosures in the Golden State. While it is only a trend, it is encouraging. The number of actual foreclosure auction sales being cancelled--no foreclosure completed--increased 27% since May of this year and 153% since June a year ago. What this would indicate is an increased number of homes facing foreclosure ending up averting the auctioneer's hammer by reason of loan modification. The largest number of these is with JP Morgan Chase, largely due to its acquisition of Washington Mutual and that lender's large default portfolio. So, if even a share of these loan mods remain healthy, a major step has been taken to reduce the overall effects of the foreclosure crisis.

REMEMBER: If you do accept a lender's loan mod terms, make certain it is something that you truly can afford so that you don't find yourself back behind the eight ball a few months later under the loan mod's terms.

Good News in Massachusetts!

Well, if you happen to live in my original home state, the Bay State (GO RED SOX), I've got some good news for many of you who may have had sub-prime mortgages. The Mass Attorney General, Martha Coakley, announced that her office has obtained a nearly $102 Million settlement from Morgan Stanley due to their practices in the securitization and warehousing of sub-prime loans for such firms as New Century. Some of this settlement will go to homeowners to help them avoid foreclosure, while the rest will be split between the Massachusetts Pension Fund and the state's general fund. The breakdown is as follows: $58 million to over 1000 homeowners affected; $23 million to the pension fund to restore lost investment funds due to the sub-prime catastrophe; and the remainder, $19.5 million to the state's general fund. This last amount recovers lost taxpayer funds. Are you eligible for the homeowner reimbursement portion of this? Call the attorney general's office. Good luck!

To The Rescue!

If your home is at risk of foreclosure and you live in any of the following states, I have some really good news for you! If you're in California, Arizona, Florida, Michigan or Nevada, you may be eligible for what amounts to foreclosure avoidance financial aid from the Federal government and administered by your state. The US Treasury announced yesterday that these states' "hardest hit" assistance programs have been approved for a total sum of $1.5 Billion is aid to assist homeowners in danger of foreclosure.
Arizona's receiving $125.1 million to aid in principal and/or interest rate reductions or extensions of the term of the mortgage. The state may also provide aid to unemployed/underemployed in finding a new job. This help will be in the form of mortgage payments or removal of subordinate mortgages in some cases.
California is receiving $699.6 Million of these funds, and will use the funds to either reduce loan principal balances or make payments for unemployed homeowners until they get new jobs.There will be a maximum term for such payments.
Florida's $418 million will go to help unemployed/underemployed borrowers make their mortgage payments while seeking new employment.
Michigan's $154.5 million will largely be used in a similar way. Also, it may be available to help homeowners pay off loan payments that are now late.
The state of Nevada's $102.8 million will go to help make loan mods.
Additionally, some, if not all of these states will also provide some assistance to remove or modify second mortgages that are complicating working out assistance for the firsts.
As with any government programs, the details are many more than can be covered here, so contact your local state government housing offices.
Good luck!

More Gulf Mortgage Good News

Following on and expanding yesterday's comments, additional lenders have announced suspension of mortgage payments by borrowers and foreclosure proceedings in the Gulf area affected by the massive BP oil spill. B of A and Wells Fargo announced disaster relief programs for their borrowers. In B of A's case the relief is a forbearance from making mortgage payments on home loans for up to 90 days. Their program is one, they noted, similar to others they have instituted after other various disasters such as Hurricane Katrina. In the case of Wells Fargo, the bank is suspending foreclosure proceedings for home owners adversely affected by the oil spill disaster.

Further also to yesterday's commentary, I must correct an error. I said Freddie Mac was developing a program to assist those homeowners adversely affected by the spill and its effects. Actually, that was Fannie Mae. However, if your loan is held or guaranteed by Freddie, today's news covers you. According to Ingrid Beckles, Sr. Vice President of Freddie Mac, they are commencing a program of forbearance in making mortgage payments for any homeowner negatively affected by the spill in the Gulf area. While typical Freddie programs of this nature provide for suspension of payments entirely for up to three months or reduction in the payment amount for up to six months, Beckles noted that in this case, based on individual situations, Freddie may grant forbearance of some form for up to a full year. Gulf Homeowners: CALL YOUR LENDER--NOW!!
Good Luck!

A Sorely Needed Bit of Good News in the Gulf

Well, it may be a classic example of 'damned by faint praise' or something along those lines, but a couple of announcements were made today regarding mortgage payments for those living in the Gulf Coast area affected by the BP oil spill disaster. Citibank and Freddie Mac both announced a willingness to allow homeowners up to three months time to NOT make scheduled mortgage payments IF their employment is negatively affected by the effects of the oil spill. While I am sure that said Gulf residents would rather make their payments and not have the spill at all, and while the effects of the spill may be felt way beyond three months, this is a most welcome gesture by these lenders. I feel confident in saying it very well could help many folks in the affected area avoid default and foreclosure. DETAILS: CHECK YOUR LENDER--AND DO IT NOW!!
Good luck!

Some Good Fortune in Utah: Peter

Don't know how long it will last, but if you live in Utah, have your mortgage with Bank of America, and are facing foreclosure, you got at least a temporary reprieve this past week. A court ruling held that B of A must, at least for the time being cease foreclosures under such loans as, according to the judge, B of A is not licensed to conduct business in the state of Utah. I'm sure that the bank won't take this lying down, but how soon they get it straightened out and resume foreclosures again is something to keep your eyes peeled for. Check your papers regularly and stay in touch here. If I hear of anything further, you'll all be the first to know.
Good luck.

Cause and Effect

In information released yesterday, it was announced that by far the largest single cause of homes going into default, possibly followed by foreclosure, is the loss of a job by the homeowner or homeowners. With a homeowner's employment usually as the primary source of mortgage repayment, it is obvious how sever an impact loss of employment can have on making the payments.

"So what? This isn't news", you say. Well, that's probably true. However, what can you do if you find yourself in this situation? If you know for certain that it's only a temporary situation, such as seasonal retooling or staff reductions, and that you definitely will be back at work in a short period of time, you may already have planned how to handle your payments in the interim. If not, you may want to seriously consider initiating the conversation with your lender to see if a temporary forbearance period can be arranged on your normal payments. If your previous payment history is good, a lender will be more inclined to work with you on such a request, especially if you can prove that you do have a job to go back to on a specific date in the near future.

What if your situation is not this type? What if you're out of work and no immediate prospects? There are a number of different things you can try. One is to take on temporary work until you can land a full time position. Another is, once again, to contact the bank holding your mortgage. Se if you and they can work out some form of forbearance on payments or a reduction in the size of your payments. Perhaps an agreement to pay interest only for a specific number of months can be arranged. Again, the bank's willingness to work with you on a solution will be based to some degree on your history of making payments in full and on time up to now. Another type of loan mod that may work is to extend the term of the loan. Say your present mortgage is for thirty years. Perhaps you can get the bank to change the terms to a forty year loan, payments to commence in three months. That will give you both a smaller payment and some time to try to gain meaningful employment before you have to resume payments.

Every person's situation is unique, so what may work for one won't necessarily work for another. But give it a try! Remember: the home you save IS your own!
Good luck.

Relief For Unemployed

The Treasury Department is coming out with guidelines for its previously announced program for unemployed homeowners. Basically, the program, scheduled to take effect on June 1, 2010, will require at least three months forebearance on making mortgage payments for anyone unemployed. Exceptions to this coverage will be for those whose loans are from GSE's. Call your lender if you are unemployed and having troubles making payments.

More Good News-Maybe

In separate announcements today, two of the biggest mortgage lenders in the nation: Wells Fargo and Bank of America, laid out further possible relief to homeowners facing foreclosure. Wells stated it will host a three day workshop beginning April 26in Oakland that will allow troubled borrowers to talk with a counselor and possibly obtain a loan modification. So far over 500 customers have signed up for the program, but there is still room and registration is open through Friday, April 23. Wells is going even farther with signups. If you haven't registered and want to attend, walkups are also welcome to come. It will be held at the Marriott City Center Oakland from ten in the morning to seven in the evening each day. Anyone wanting more info or to register should call: (800) 405-8067; or the website: www.links.sfgate.com/ZJNO .

As for BofA, they said they're CONSIDERING a program to assist unemployed homeowners avoid foreclosure. The proposed program, and, for now, that's all it is--PROPOSED, would allow unemployed homeowners to avoid making any mortgage payments for up to nine months while they sought employment. If, during that period, the homeowner obtained a new job, then BofA would put together a loan modification for them. If, however, the borrower was unable to find work during this period, at the end of the nine months, he/she would have to relinquish the home to the bank via a deed in lieu of foreclosure. Final approval requires regulatory approval. Keep your eyes on this page for more as it develops.

More Good News in California!

Well, as predicted here a few days ago, the state of California has enacted a law allowing homeowners to avoid income tax liability for forgiven debt that relates to foreclosures and short sales. SB401 closely aligns California property situations to a similar Federal law, although for different amounts. Under the new California law, forgiven debt up to $500,000 of an original loan of a max of $800,000 on the taxpayer's qualified principal residence may avoid California income tax liability. Qualified principal residence debt refers to the taxpayer's debt used to acquire, build or "substantially" improve the principal residence. Both first and second mortgages are covered. Also covered are mortgages used to refinance the original loan if the refi was NOT used to take cash out of the property. In other words, that refi you did last year to pay for the family European vacation very likely will not qualify. Also, investment property and second homes are generally not covered. As everyone's situation is personally unique, you should check with your tax advisor for details and to be certain if you qualify.

More California Good News

As I mentioned yesterday, one of the pending pieces of legislation to help homeowners facing foreclosure was SB1275. Referred to as the Homeowners Bill of Rights, it could, if it becomes law, require all mortgage lenders doing business in the state to review possible defaulting borrowers for a loan modification before foreclosure could proceed.

If a mod were then denied by the lender, the homeowner would have the right to file an action (sue) to either void the foreclosure or receive damages based on their situation.

Yesterday, the Senate committee considering the bill passed it 7-1, passing it on to the full Senate for consideration. In order to become law, it must pass the whole Senate, then the Assembly and then be signed by the governor.

GREAT News in California!

For all those of you living in California and facing foreclosure, or having just lost a home through foreclosure, there is some truly wonderful news hanging out there on the immediate horizon! There are three bills working their way through the California legislature that will, if passed, provide a great deal of relief for homeowners in these straits.

First, a bill scheduled to be voted on today, which the governor has indicated he will sign, will bring the California tax code into line with the federal one regarding the taxability of loan amounts forgiven in short sale, as well as any other taxable results from foreclosure, deed in lieu, or loan modifications reducing the amount of debt owed. In short, if you fall into any of these categories, your avoided debt from any of these situations will no longer be considered taxable income by the state of California. It would be retroactive to tax year 2009. As with any tax issues, talk with your tax advisor to get specifics as they apply to your particular situation and circumstances.

Second, under proposed SB1275, lenders would be forced to offer loan mods to anyone in trouble with their mortgage before the lender could begin the foreclosure process via recordation of a Notice of Default. If the application is filed by the homeowner, the lender would first have to process it before foreclosure proceedings could commence. Further, if the mod were denied by the lender, the lender would have to state why the denial in writing. This bill is in the senate committee stages of consideration, and has a way to go before it could become law.

Third, AB1588, now in early stages of Assembly consideration, would, if it became law, create a mediation program for lenders and borrowers. The process would basically allow borrowers in danger of foreclosure to request a mediation with their lender and the lender would have to agree to the mediation, the goal being an attempt at a loan mod. As it is early in the process, details are not yet available.

For more info as these and other forms of relief develop, keep following this site.

More Good News!

If you're mortgage is with Bank of America, and you are in trouble, I have news for you! B of A yesterday announced that effective immediately it will reduce the principal amount of your mortgage loan balance. There are qualifications you must meet.

You must have missed at least two months payments on your mortgage, and the mortgage balance must exceed the value of your home by at least 20%. According to B of A, this will affect about 45,000 borrowers, or about 30% of its overall mortgage portfolio.

Also, it should have the effect of applying other major lenders to follow the same path. Wells Fargo announced it has already done so for 52,000 borrowers to the tune of about $2.6 Billion, while both Citi and JPMorgan Chase refused to say if they'd attempt a similar program.

Brief Notes

Well, things are apparently slo-o-o-o-w-ly improving. The latest updates from the government and the banking industry indicate that more and more lenders are working with borrowers who are either in trouble already or just barely avoiding it. Latest statistics show that more loan mods are getting put together, and at a somewhat faster pace than just a few months ago. How long this trend continues is anyone's guess, but it just makes good sense to do so, as any loan that is modified & avoids default and foreclosure benefits the lender as well as the borrower. Stay tuned, and we'll bring you the latest on this and other trends as soon as it becomes available.

Brief Notes

Hate Those Fees!

Hate those fees that people charge up front to help get a loan modification? While some are legitimate and from legitimate firms, there are an increasing number that aren't. You pay your money and--that's all that happens. You pay your money! No loan mod, no nothing, except a bigger hole in your wallet.

Well, take heart! The Federal Trade Commission is proposing a rule that will ban any fees from loan mod firms until AFTER they have a letter documenting a legitimate modification offer from the lender involved. Stay tuned for more as it develops.

Good News From Bank of America

BofA has just announced that it will become the first mortgage servicing entity to agree to do loan modifications on various types of second lien paper. This will include regular second mortgages and home equity lines of credit. What makes this announcement particularly encouraging is that BofA is NOT conditioning its agreement on a homeowner having its first mortgage also with BofA. As long as the second lien in question is a BofA loan, the primary mortgage can be with any lender, even if it's someone other than BofA.
The reason that this is of major importance is that, according to the Treasury Department, roughly half of all homes with first mortgages in default also have a second lien. This could imperil the homeowner even if he were able to negotiate a loan mod for the first. BofA's action could lead the way to an improvement in the overall mortgage finance market where default situations exist.

Good News From HUD

In an announcement this past Friday by HUD, it was announced that homeowners with FHA loans no longer have to become delinquent on their payments before gaining eligibility for loss mitigation assistance. Under the new guidelines, these homeowners must fit the definition of one "facing imminent default". What that means is that the borrower must be facing reduction of income or some other form of financial hardship that will result in the homeowner finding it difficult to make the next scheduled payment. Conceivably, such other hardship could be something such as death in the immediate family or a health crisis uncovered by insurance.

This could cause the FHA's forbearance program to kick, thus allowing the lender involved to postpone, reduce or suspend scheduled payments on the loan. Questions? Get in touch with your lender NOW--before you fall into default.

Good News in Florida!

Happy New Year and here's hoping things get better in the new year for all of you! Moving to the latest bit of good news for people facing foreclosure, in Florida, the state Supreme Court has started a mediation program between lenders and homeowner/borrowers in hopes of reducing the number of foreclosures. The court's order requires that ALL foreclosure cases in the state's courts involving residential property be put through a 'managed' program to mediate a non-foreclosure solution for the case. This will have to be started for a given case within 120 days of it being filed in court, and the costs will largely require that the lender be responsible for payment. How well will it work? Time will tell, but, once again, we see that a little bit of ingenuity can go a long way to easing this terrible national crisis.