Loan Mods MAY Be Easier

Today the US Treasury Department issued updated rules for the Home Affordable Modification Program (HAMP) that require large lenders to provide and maintain a single point of contact for borrowers through the entire loan mod process. This should make things a bit easier in keeping track of the progress of your HAMP loan mod while it is under consideration. It should also make it easier to communicate back and forth with your lender when pursuing a HAMP mod. A word of caution, however: this new rule only applies to the largest loan servicers. That is defined as those servicers with a program cap of a minimum of $75 Million. However, Treasury's also "encouraging" smaller servicing firms to also participate. Whether or not they do so remains to be seen. This new rule also applies to Federal short sale and unemployment-related home programs, more formally known as Home Affordable Foreclosure Alternatives (HAFA) and the Home Affordable Unemployment Program (UP).The new rule also doesn't apply to second lien situations that may be covered by other Federally supported programs.
The way it works, basically, is that not later than September 1, 2011, a servicer MUST assign a relationship manager to all borrowers who may be eligible for HAMP mods, and by November 1, must assign by November 1, a relationship manager all borrowers who are either in a HAMP, HAFA or UP plan, or have executed a short sale contract or deed in lieu agreement. Once the relationship manager is assigned, the rule goes on to set specific requirements of how the servicer/borrower relationship must then proceed. For the details, check with your servicer or try the US Treasury (USTreasury.gov website; then go to Making Home Affordable tab).

As always,
Good luck.

Some Help From Bankruptcy Court

For the full legal details of the following, you'll have to call your attorney, or, if you cannot afford one, Legal Aid. But this morning, I just learned of a very interesting detail of the US Bankruptcy law. It's not very well known, even though it's apparently been the law for quite some time now. But it can definitely benefit those of you using bankruptcy to avoid foreclosure.

Basically, it goes like this. Your first mortgage cannot be eliminated by filing bankruptcy if you plan to continue to live in the home; it can only become one of your debts to be paid under your approved bankruptcy payment plan, assuming the court approves of your plan. BUT, and that's a very big 'but', if you have a second mortgage, it may be possible to totally eliminate it if there is no equity left in the home after the first is accounted for. The elimination doesn't happen instantly. Rather, the first becomes part of your repayment plan and the second is put on hold for the duration of the repayment plan, frequently 3-5 years or more. At the end of that time, assuming the debts have been handled according to the plan, the second mortgage is eliminated.
Something this important definitely is worth a call to an attorney if you have a second to consider.

As always, good luck.

Bank of America To Offer More Help

In an announcement yesterday, BofA said it is increasing the number of foreclosure prevention/customer assistance centers around the country. Presently a dozen in number, the bank said that beginning in July it will add another 28 to bring the total to 40 nationally. This expansion will see centers added in 22 states. For details, call your BofA branch or loan officer.
As always, good luck!

Good News in S. Carolina

For those of you in SC, there's good news this morning! The state Supreme Court has ruled that all foreclosure actions by banks must be halted as of May 9, until the lender can demonstrate that it has attempted to pursue either a loan modification or other loss mitigation action. This effectively does a couple of things. First, it requires that your bank work with you to try to achieve a loan mod or alternative action to avoid foreclosure. Second, it eliminates, for the present at least, the situation known as "dual tracking" that I talked about here just a few days ago. In cases where the lender attempts a solution with the borrower, but is unable to accomplish this, the ruling requires the lender to certify this to the borrower in writing. More info on this good news? Call your attorney, and if you don't have, or cannot afford one, call Legal Aid.
Good luck.