Good News From BofA

Well, if your mortgage is held by Bank of America, there's some good news today. BofA has announced it will expand its participation in the Principal Reduction Program in California. Previously, the bank was limiting its participation only to what can best be described as a pilot 'test' version of the program. The program, a federally funded one that helps provide funds to reduce the borrowers' principal balance of their mortgages, covers potential reductions of up to $100,000 in principal amount. That figure is divided between two sources: the state's Keep Your Home California program ($50,000 max) and the participating lender (BofA in this case)(the other max of $50,000. Eligibility is subject to program guidelines. For example, loans owned or guaranteed by Freddie Mac or Fannie Mae are not eligible. However, BofA has stated that any ineligible applicants will be considered by the bank for one of its other assistance programs, such as interest rate reductions, extensions of loan terms or reduction of principal to some degree. For exact info as to your eligibility and terms you can possibly qualify for, call BofA or the California Housing Finance Agency. The agency can be found on the web at: www.calhfa.ca.gov .
Good luck.

There's Still Time!

Those of you who follow this blog regularly may recall that there is a program to help out folks who've lost their jobs when it comes to meeting mortgage obligations. Run jointly by HUD and NeighborWorks, it's called the Emergency Homeowner Loan Program (EHLP). It will provide financial assistance in the form of emergency loans for up to two years or $50,000, if someone became unemployed for no fault of their own, or is underemployed in spite of trying to find new employment. These loans are interest free, and specifically for payment of the homeowner's mortgage. Originally, the cutoff date to apply was July 22, last Friday. However, it has been extended through this Wednesday, July 27. If you need this help, check with HUD or NeighborWorks. Go online or try the phone. But don't wait--July 27 is the day after tomorrow!
Good luck.

A Word to the Wise--RoboSigning Still Happening!

You'd think that the banks and other lenders who are foreclosing on allegedly delinquent mortgages would have gotten the word by now. Robosigning is illegal! Further, they all swore that they'd looked into it at their institutions and had made sure that if it had ever happened, it would immediately cease and never happen again. Well, apparently many of these assurances aren't worth the paper they're printed on--or the lenders swearing it was over had their fingers crossed behind their respective backs. At any rate, in Congress this week, a number of Reps and Senators have requested that the Fed and the Controller of the Currency take a fresh look at the problem because it's apparently still going on in many states by many lenders.
If you're concerned that you may be affected by robosigning, contact your Congressman, Senator or any (all) of the regulatory agencies that may have authority over the lenders: state banking commissioner, Fed, Controller of the Currency, FDIC.
As always, Good Luck.

It's Official--No More Extended Danger From Shorts

Well, for those of you who follow us regularly, you are already aware, as of July 16, that a bill made it through the California legislature terminating lenders' ability to agree to short sales and still come after you for a deficiency judgment afterwards. Well, it's now official! Governor Brown signed it into law yesterday. If you're considering a short sale, check with your attorney as to how this new law applies to you. If you can't afford an attorney, call Legal Aid. But, under the bill, the sale price agreed to in the short is it--no more bank payments after the sale is done!

As always, Good Luck.

More Help For Homeowners

The Helping Responsible Homeowners Act, sponsored by Sen. Barbara Boxer, apparently is gaining support in the Senate. Boxer just announced that Sen. Isakson of Georgia has signed on as co-sponsor. This carries more than the normal support of a co-sponsor, as Isakson previously ran one of the country's largest independent real estate brokerages.
The bill would do a number of important things. Most important are the following two. First, it would remove refi fees charged by Fannie & Freddie from refinancings handled by these two organizations. The fees, up to 2% often make many qualified owners reluctant to borrow the loans. Second, it would help many qualified homeowners whose loans are current refinance when they are 'under water'--the loan is more than the current market value of the home--also refi at current low rates. The idea behind the bill is to remove as many of the procedural barriers to borrowing that qualified homeowners face as possible. For more info, contact Senator boxer's office. As always, good luck.

Less Liability for You in California Shorts

No, I'm not referring to any form of fashion. I'm talking about the removal from further liability to any individual in California when selling their home in a short sale. Usually done to avoid the loss of a home by foreclosure, short sales occur when a homeowner sells the home for a price lower than the outstanding principal balance of their mortgage. Don't get the idea that doing a short sale is a wonderful thing--it isn't. Your credit still gets trashed, although possibly not quite as much as in a foreclosure. You may very possibly find yourself owing a possibly substantial sum in income taxes to both the Feds and the state (how much, if any, depending on your particular situation--check with your accountant). But, if you do a short sale, you at least avoid foreclosure and your mortgage travails are over. At least that's what you expect to be the situation when it's completed.
However, in an increasing number of cases, the banks holding your mortgage have been requiring you, the selling homeowner, to agree to pay a deficiency payment, or acknowledging that they may retain the right to sue you for a deficiency after the short has concluded. A deficiency is the amount left unpaid and supposedly forgiven by the bank that makes your transaction a short sale.
Well, under a new law taking effect today, Californians are no longer liable for a deficiency judgment in the short sale of their homes. Passed as California Senate Bill 458, the law prohibits any deficiency judgment in short sales of residential properties, one to four units, and also precludes ANY lender (regardless if it's your first mortgage or your fifteenth) requesting you to agree to make any form of deficiency payment or judgment after the conclusion of your short sale. The law says that any such payment shall be void as against public policy. What that fancy bit of lawyer language means is that the law regards such payments as harmful to the general public, and thus not permitted. This law doesn't,however, prohibit borrowers from offering a payment as an inducement to the lender to approve a short sale. It also doesn't protect the homeowner in cases of his/her fraud or waste to the property, or where the homeowner isn't a natural person or has cross-collateralized the mortgage with more than one property.
If you're considering doing a short sale, definitely check with your attorney to be certain if you qualify for this new protection. Like I said at the start, it's not a wonderful thing, but it's a hell of a lot better than a foreclosure--and a hell of a lot better than it was as recently as yesterday.
Good luck.

A Couple of Items

Two new things today--
One: The Congresswoman from Ohio, Marcy Kaptur, has gone on record as asking that lenders offer a moratorium on foreclosures due the fact that so many homes not yet lost are well "under water" in terms of their value compared to how much is owed on their mortgages.Noting a precedent during the Great Depression by Minnesota, she filed a House Resolution requesting President Obama declare a national foreclosure moratorium until the overall situation has improved. No specific amount of time was suggested. For more, contact her in the House of Representatives--or call your own congressional rep.

Two:Homeowner Reward, a subsidiary of PMI Group, is starting a program to support homeowners whose mortgages are larger than their homes' current values.Limited to homeowners whose loans are insured by PMI, the program offers cash rewards to homeowners who elect to remain in their homes, as opposed to just walking away, when the values are less than the mortgage amounts owed. If you are, or think you may be insured by PMI, contact them immediately to determine your eligibility for the program.

And, as always, Good Luck.

Great News For FHA Borrowers!

Just announced a few minutes ago--starting August 1, 2011, the Federal Housing Administration, better known by its initials: FHA, will extend and expand its foreclosure forbearance program for unemployed mortgage holders. Presently limited to a max of 3-4 months, the revision will allow qualified FHA borrowers who are unemployed to go as long as one year without having to make mortgage payments. After the year is the earliest that foreclosure proceedings could commence under the expanded program. This new program applies ONLY (I'll repeat that:ONLY) to loans that are backed by the FHA. If you're not sure, check with your lender or call the FHA directly.If you are accepted into the program you will eventually have to repay the entire loan, just as you're currently obligated to do. But the delay in payments is the important thing if you're unemployed. It's one less strain on a what likely is a very limited budget for you.
Additionally, the Government is hoping that the country's private lenders as well as Fannie Mae & Freddie Mac, , following the FHA's lead, will develop similar policies on their own. If you're unemployed and have a mortgage that is FHA backed, don't wait! Call your lender or the FHA NOW!
As always, good luck.