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.
Friday, June 11, 2010
Wednesday, June 2, 2010
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.
"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.
Thursday, May 13, 2010
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.
Tuesday, April 20, 2010
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.
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.
Tuesday, April 13, 2010
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.
Friday, April 9, 2010
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.
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.
Thursday, April 8, 2010
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.
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.
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