New Massachusetts Law Pending Limits Foreclosure Challenges

Well, my home state, Massachusetts, is considering a bill to limit time available to homeowners to challenge the foreclosure of their homes. It is intended to do so to make a final determination on title validity easier to allow future sale of said properties by avoiding potential foreclosure-related clouds on title. It would also shorten the time a homeowner about to be foreclosed on has to challenge the validity of the pending action, although it would not preclude foreclosed homeowners from suing for recovery damages related to the value of the foreclosed home. If you live in the Bay State and are facing possible foreclosure, you may want to contact your legislator and oppose this bill before it becomes law. As always, Good Luck.

JP Morgan Chase Offers Help

As part of their recent settlement with the Justice Department, JP Morgan Chase Bank is offering assistance to homeowners, including forgiveness of debt and other mortgage relief for homeowners. The relief comes in a number of areas, including loan modifications, interest rate reductions, low income and disaster lending and blight relief lending. As Chase makes various types of loans, it gets credit under the JD settlement, but not all relief gets the bank dollar for dollar relief. So, obviously, they are happier doing one form than some of the others. ultimately, assistance under the terms of the settlement will total $4 Billion, and the bank has until 2017 to get it all completed and disbursed. The first 100 cases are now underway, and are regarded by both government and bank officials as a 'test' of how the settlement will work. If you have a home loan with Chase and think you may qualify under the terms of the settlement, or if you're not certain if you qualify, get in touch with Chase as soon as possible and get the discussion going. As always, Good Luck.

Good News for Current & Former Citibank Borrowers

Well, if you are or were a Citibank borrower, yesterday's news is potentially good for you. As part of a $7 Billion settlement with the Department of Justice. Of that $7 Billion figure, $2.5 Billion will go to provide financing for construction of low income multi-family rental housing. Part of the $2.5 Billion reportedly will also go toward helping home owners who financed their homes with Citi. This part of the settlement will provide loan mods and principal reductions of existing loans. If you have questions, contact Citibank or the Department of Justice in Washington, D. C. As always, good luck.

More Help to Avoid Foreclosure in NY

The New York state Atty. General, Schneiderman, has announced a new plan to grant targeted small loans to help families remain current on their mortgages by qualifying for a loan mod they might not otherwise be approved for, thus avoiding foreclosure. The program is called New York State Mortgage Assistance Program (NYMAP). Loans will be for a max of $40,000, and be used to pay off other financial obligations that might be preventing the homeowner from qualifying for a loan mod on his/her mortgage. For more info, contact the NY State Atty. General's office. As always, good luck.

REO Properties Increasing Again

For the first time in several months, the total number of homes lost to foreclosure has shown a marked increase. Rising 15% since last August, there are now 430,000 foreclosed homes nationally, up from August's 375,000. Now, even the increased number is far below the totals at the worst of the Great Recession, but an increase such as this is troubling, and not only to home owners. What is more troubling is that the increase was felt across most of the nation, with 46 out of the 50 states showing increases. Leading the rise was Idaho, which nearly doubled its REO inventory. Other states with large increases included Maryland, Oregon, Nevada, and North Dakota. There are likely many reasons for the increase, but one thing it tells me here is that people who are trying hard to keep their heads above water are having trouble for any of a variety of reasons. It also tells me that it is time to remind folks in this situation that there is a book that can recommend ways to avoid having this specter creep up on you. The book is a short one, less than 80 pages total (let's face it--if you're facing foreclosure, you're not interested din reading War and Peace), and not very expensive. It can be ordered on Amazon.com . OK< so you're wondering what the name of this book is. It's called, "Save Your House From Foreclosure" , and is written by yours truly. Basically, it has a number of bits of advice that I have gleaned from my careers in lending and real estate over the years. There are no guarantees in life, but the small cost of this book can possibly make a difference if you're one of the unfortunate folks again facing the terrible prospect of default and foreclosure. As always, good luck.

FHA Plans to Expand Credit Access

Since its inception, this blog has sought to assist homeowners in avoiding foreclosure. One way to do so is to help them avoid getting into credit trouble with their mortgage lender. With that in mind, today we have a brief blurb on a new plan to expand credit access for borrowers without increasing risky situations that normally such expansion could create. The FHA has announced a new program to help counsel borrowers to avoid the possibility of loans becoming seriously delinquent, a major step toward possible foreclosure. A new program, Homeowners Armed With Knowledge (HAWK) is including counseling in the home buying process as a means to avoid risky decisions or loans. This will be on FHA-insured loans. For more info, contact your lender or go to FHA's web site: www.fha.com . As always, good luck.

Lender Problems? Call CFPB

Well, the Consumer Finance Protection Bureau, CFPB if you like initials, has just released its latest report on complaints from consumers. While it's showing that things may be slowly improving in financial services, including mortgages, it's also showing that there's a long way to go until every institution is walking the "straight and narrow". Complaints rose 80% in 2013 from 2012, reaching a total of 167,300. Not al of these are mortgage related, but 37% of them are. Over half of these were related to borrower inability to pay or loan mods and foreclosures. Eight per cent of mortgage complaints were from consumer complaints on application related issues. These included rate-lock disagreements and lenders charging penalty fees when a loan failed to close or to close "on time". So, the advice from here is that if you feel you have a gripe over your mortgage in any way, get in touch with the CFPB. That's what it's there for and it may be able to help you get that issue resolved. Good Luck.

Loan With Ocwen? You May Be Entitled to Cash!

In a settlement between Ocwen Financial, Ocwen Loan Servicing and 49 states, Ocwen has agreed to pay financial relief to borrowers totaling $2.1 Billion. This is for violations of various mortgage servicing laws. Of that sum, $2 Billion is for principal reductions to homeowners who are currently in default or in danger of foreclosure. In addition, $127.3 Million in cash payments is to go to former homeowners whose homes were foreclosed upon by Ocwen and its recently acquired other lending firms, Litton Loan and Homeward Residential. The Ocwen liability for Ocwen comes from the alleged violations by these two entities that Ocwen subsequently acquired. The foreclosures covered in this cash settlement were completed between January 1, 2009 and December 31, 2012. SO< if you have a loan from Ocwen, originated by either Litton or Homeward Residential, get on the phone. You may have some cash heading your way, or, failing that, a reduction in the amount you now owe under the mortgage. While I don't have the overall state by state breakdown of the settlement, California homeowners' share of the $2.1 Billion is $268 Million. Not a bad way to spring into Spring, is it? Good Luck!

The Return of Robosigning?

In a lawsuit filed in Federal Court in New York last week, it has been alleged that Wells Fargo, the nation's largest mortgage lender, has come up with something new in robosigning and related issues. The suit claims that the bank has assembled a 150 page manual for its attorneys detailing how to make it look as if a bank has signed over to Wells a mortgage, by autosigning documents related to the mortgage. According to the story run by the New York POST, which reviewed the suit and the alleged manual, the guide shows how endorsements and allonges can be added after the fact to documents from the mortgage when they previously weren't there. Wells, as would any defendant, disavows any wrongdoing. For more details, if you are a Wells borrower having problems with your mortgage, you can contact the attorney filing the suit. Her name is: Linda Tirelli, based in White Plains, NY. For reference, her web site is: www.TheGTCFirm.com . As always, good luck.

California Deficiency Judgment? Take Heart!

One of the less discussed negatives (after losing or short selling your home)is what's called a deficiency judgment. Simply described, this is when a homeowner sells his home short or loses it to foreclosure and the bank involved still ends up getting less than the amount of the outstanding mortgage. They go to court and get a judgment against the former owner for the difference--a deficiency judgment--which means that the owner hasn't suffered enough yet, but must also pay what's left that wasn't recovered in the sale or foreclosure of the home. California has had for years a law that partly shields the homeowner from this ignominious fate. It's called the One Action Rule, and basically says that in many cases (check your atty to see if you benefit), the lender gets "one bite of the apple" on a foreclosure--if the house doesn't cover the debt, the bank's stuck. It doesn't get to come back to you and hold out its hand for the difference. Well, this summer, California broadened this consumer protection. Previously, the courts in the Golden State ruled that although the rule didn't allow the lender to pursue the shortage, it didn't extinguish the debt. Bootstrapping onto that many lenders have handed out the deficiencies to credit collectors, or filed suit in court top get the amount they were left short of. Under new legislation, this is now banned. Many lenders and collectors have so far ignored the change in law, but all that does is potentially set up a cause of action for the former homeowner being pestered for the deficiency to sue whoever's chasing him/her for the harassment of trying to collect on the debt. SO, if you fit the situation of prior foreclosure with a deficiency in what the lender was able to collect and are being hounded, call your attorney. You may come up with some unexpected cash to soothe your aggravation. As always, good luck.

Short Sale Tax Liability Shield Extension Proposed

The law shielding homeowners from income tax liability of forgiven debt when doing a short sale expired December 31, 2013. No extensions yet, but Congressman Bill Foster of Illinois has written a bill to do just that. His proposed bill would extend the tax shield on amounts reduced by debt forgiveness from short sales up to $2 Million on primary residences from January 1, 2014 through January 1, 2016. As a way to cover the cost to the Treasury of the extension in lost tax revenue, his bill proposes the repeal of a tax break for oil and gas companies that he says is no longer necessary due to the vastly increased profits they are now receiving. This part of his bill could be an issue as the Republican-led House is anathema on any tax increases, no matter how reasonable they may appear. Knowing that, this might very well be a good time to get in touch with your Congressional representative (and your two Senators) and voice your support of the bill as written. As always, good luck.

CPFB Rules Working

In remarks made yesterday, the head of the Consumer Finance Protection Bureau (CFPB) noted that most of their new rules governing provision of credit and loans to the general consumer market appear to be working and working very well. While the CFPB is mostly known for its rules trying to help individual borrowers in regards to credit card and similar debt, they also have created rules for the safe and fair granting and administration of mortgages. The two rules most closely related to fair administration of mortgages are the Ability-to-Repay rule (ATR) and the Qualified Mortgage (QM) rule. The former specifically lays out guidelines for lenders to follow when making a loan to insure that the borrower is able to repay the loan. In the recent financial meltdown of the last few years, this was one rule that, due to its non-existence, allowed lenders to make loans and pay little attention to the likely ability of borrowers to ever be able to repay. This situation, of course, allowed many loans to be made that should never have been, with the result that many of them ended up in default and the underlying homes they financed being foreclosed upon. The QM mortgages are administered with new rules banning dual tracking and restricting the speed with which foreclosures may be initiated. Dual tracking, for those of you yet to suffer through it, is the now banned practice that allowed a lender to simultaneously commence foreclosure procedures for a defaulted loan at the same time that the borrower was supposedly being considered for a modification. Usually, the lender's employees working on both procedures for a specific loan never spoke to one another, with the frequent result that a borrower diligently working with his/her lender to gain a loan mod would be foreclosed with little or no warning. If you have any questions about your home mortgage, home credit line or other credit obligations, give a call to the CFPB or go to its web site: www.consumerfinance.gov . Good luck.