REVERSE MORTGAGES HAVE THEIR PITFALLS TOO! In a report by the Consumer Financial Protection Bureau (CFPB), statistics on Reverse mortgages show an alarming possibility to create problems for the homeowners where there shouldn't be any. The biggest problem is in the borrower fully understanding all of their obligations under the mortgage. The process is set up so that the owner makes no mortgage payments, and the loan is eventually repaid from the sale proceeds when the owner either dies or moves. One exception, however, is that all taxes and similar obligations must be paid by the owner. Failure to do so is a default and can lead to foreclosure. Apparently many owners availing themselves of the Reverse Mortgage do not fully understand this, and, as a result, are risking foreclosure. Also, many owners fail to grasp the relationship of their equity in the home to the loan, and can also find themselves in trouble as a result. If you have, or are thinking of getting a reverse loan, check very carefully with your lender, and, if you feel it necessary, bring along your attorney to help review the documents and your obligations.

POTENTIAL GOOD NEWS IN CALIFORNIA: A couple of days ago, some potentially good news for homeowners at risk for foreclosure came out of committee in the Legislature. The Homeowners Bill of Rights, as it's been referred to, passed in committee and now will eventually go forward for a vote on the floor of the full legislature. Basically, as it currently is designed, it would give homeowners a variety of new procedures to better enable them to qualify for loan mods and other foreclosure avoidance or delaying procedures. I'm not going into details here because anything could be changed by the time the final version of the bill gets voted on. However, if you are interested, contact your representative in the legislature. Good luck.

Good News for Military Personnel: If you're currently active duty in the mil and considering a short sale, but don't want to have late payments on your record in addition to the short sale, there is good news for you. If your existing loan is a Fannie Mae or Freddie Mac loan, the Director of the Federal Housing Finance Agency has announced that military members who have received a PCS order can sell their home via short sale without first having to go into default (missing payments) first. Even better, the lender will not pursue a deficiency judgment after close of the short sale. The reason for this new policy is that when a PCS order is received, the military member hasn't any option about staying or going. Often, this forced move requires a sale of the home so that the serviceperson will be able to buy a new residence at the new PCS location. This policy applies to all homes purchased prior to 30 June 2012.

Is This Fair? If it is shown that a bank included fraudulent documents in filing a foreclosure case, should that same bank be allowed to dismiss the case, remove the fraudulent documents and then re-file the case without the documents? There is a case winding its way through the Florida courts, Roman Pino v. Bank of New York Mellon, in which Pino, the homeowner, is trying to prevent the bank from refiling its foreclosure action due to the fact it originally included a fraudulent document. Some analysts expect a ruling in favor of the lender due to the fact that the state already has adequate fraud remedy statutes available for the homeowner to pursue his case, while allowing this type of case to proceed would likely slow down resolution of the state's foreclosure-related cases. Seems to me that if a bank tries to foreclose using a fraudulent document, that should bar them from getting your home. But, hey, I'm no lawyer.

Help for Vets In Massachusetts! Well, as reported in the Haverhill Gazette (my hometown paper as a lid in the Boston suburbs), MassHousing's Homes For the Brave program is designed to both help vets in buying homes and, equally important here, helping them avoid possible foreclosure woes in the event of either a job loss or redeployment (if the borrower is still in the mil). In the latter case, the program will pay up to six months of mortgage payments for the vet/borrower. For more info, call your local ban in Mass, or, if you're in Haverhill, call Pentucket Bank. As always, good luck.

EARLY RELIEF?: As those of you who follow this site already know, a recent $25 Billion settlement between the nation's five major mortgage lenders and 49 of the 500 states has opened up the possibility of opportunities to avoid foreclosure through a variety of ways. One immediate problem for homeowners who might otherwise qualify, but are already in the foreclosure process: if you get foreclosed before the July 1, 2012 start date for the settlement, the options there available do you no good! It'll be as if they didn't exist. With this in mind, the mayors of four California cities: San Francisco, Sacramento, Fresno and San Jose are sending a joint public letter to the five lending institutions asking them to briefly create a moratorium on any loans currently undergoing foreclosure proceedings if those loans would otherwise qualify for the relief envisioned in the settlement. The requested moratorium would only be until the July 1 start date of the settlement process. For more info, call the offices of any of these mayors. As always, Good Luck.