Good News For Mil Members! Well, if you're in the military and have been prevented from taking advantage of HAMP, the loan mod program, due to the fact that your duties keeping the country safe have you living somewhere else while you're on duty, take heart. Effective June 1, according to an announcement by the US Treasury and the Consumer Financial Protection Bureau, you may be eligible to take advantage of the program if you're away from the home due to a transfer out of the area (PCS), intend to return to the home ultimately and do not own any single family home elsewhere. For further info, you can check with either of these offices or with Hope Now. Hope Now can be reached at (888)995-HOPE . Good luck, and, from a Vet, thanks for all you do.

GREAT BofA NEWS!! As previously hinted at, the recent $25 Billion mortgage settlement has produced solid results for Bank of America borrowers. BofA announced today that it is mailing letters to 200,000 'eligible' borrowers offering mortgage principal reductions to those of the recipients who are qualified. If you get this letter and toss it, don't try to jump on board later--you're out! If a letter from BofA comes to you, and you have a mortgage with them, OPEN IT AND READ IT; THEN FOLLOW ITS INSTRUCTIONS! The lender estimates that if everyone receiving a letter gets a reduction, the AVERAGE reduction will be $150,000 per homeowner. Who will qualify? If a borrower was underwater on their loan as of January 31, 2012 (the loan was more than the house was worth), is already delinquent in payments by at least 60 days, and the bank either owns the loan, services it, or has an investor in the note agreeing to the process, that borrower is eligible. What to do? If you are with BofA, CALL THE BANK! If you get a letter from BofA, don't just toss it, thinking it's just junk mail. Open it and read it! It may save you quite a bit of money--and it just may SAVE YOUR HOME! If everyone qualifies, the total would reach $11 Billion. BofA has also stated that if the value of loans that those responding to the letter exceeds this amount, they are prepared to include them as well. Good Luck!

Some Disturbing News! According to documents that Congressmen Cummings (MD) & Tierney (MA) received recently, in the case of Fannie Mae - connected borrowers, the reason that loan principal reductions are being frequently shot down is that the acting Director of FHFA, Edward DeMarco, is ideologically opposed to loan principal reductions. FHFA claims all decisions are fact-based, but, as far as can be seen, he doesn't want to push for many reductions for fear that it will have to be taxpayer supported,even if taxpayer support of saving folks' homes wouldn't be such a bad idea.Might be a good reason to write to your Congressman and/or Senator and rattle someone's cage. Good luck.

Lender Settlement: A Quick Word

As those of you who regularly follow this blog know, the five largest mortgage lenders recently concluded a $25 Billion settlement with 49 of the 50 states, which will put some cash into the hands of foreclosed homeowners and possibly provide some alternate resolution to others facing foreclosure. There has been a push recently to get Fannie Mae and Freddie Mac to sign on to the settlement as well, which would only benefit homeowners in distress, although exactly how much is not yet known. While neither Freddie nor Fannie have acceded to this idea, please be aware that it is out there and when something happens, good or bad, we'll get you the info as soon as it's available.
Good Luck.

They Keep Crawling From Under Their Rocks!

I've occasionally talked here about scams to avoid when it comes to saving your home from foreclosure. Unfortunately, as new government aid and legal settlements with major lenders are accomplished or announced, the scam artists just jump out and want their ill gotten share of the pie--like cockroaches in a kitchen where food has been left out! According to the Home Preservation Foundation, there are more of these scum around than ever before. Without getting into specific scam details, the general rule is: If it seems too good to be true, it probably is. If someone offers to "help" you, but wants up front money, or offers services to help you avoid losing your home and charges a fee, RUN--FAST--IN THE OTHER DIRECTION!! Contact the HPV for details or your local district attorney's office, in the fraud section.
Good Luck!

More On Short Sales: Good News

Continuing on our recent tack on shorts, BofA has announced plans to make short sales less time consuming than they have been to now. Starting April 14 (this coming Saturday), BofA will institute a process designed to cut the consideration time for a proposed short sale down to a max of three weeks. Previously, such decision time ran from 45 days upward to several months. Realtors doing shorts will be required to submit five specific documents (•Purchase Contract including Buyer’s Acknowledgment and Disclosure
•HUD-1
•IRS Form 4506-T
•Bank of America Short Sale Addendum, which includes the Agent Certification form
•Bank of America Third-Party Authorization Form)
to the bank along with their offer, at the time of offer. Simultaneously, the bank will work with agents and attorneys to get collection of docs, valuations and such done more quickly to help reduce time for a decision.
If you are considering doing a short sale and your loan(s) is with BofA, contact them immediately. Involve your Realtor in the conversation as well.
As always, Good Luck.

Short Sale: Pros & Cons

AS we get farther and farther into the foreclosure crisis, more and more is being heard about Short Sales as an alternative. Yet you find yourself asking just what is a short sale, and is it better for me than being foreclosed upon? Well, let's look at the details and then you can better decide what benefits you most (or hurts you the least).
In a foreclosure, the lender takes away your home--short and sweet (well, maybe we can forget the sweet here as there's nothing sweet about losing your home). You probably won't qualify credit wise for another mortgage for at least seven years, assuming your other credit is kept OK. You potentially could end up owing income tax on the lost home as well, if the foreclosure price paid at the public auction is higher than what you paid originally, but, given recent years' values, that's not very likely.
A short sale, however, is different, although it's still not a bowl of cherries. In a short, you sell your home to a third party buyer, subject to bank approval, at an amount that is less than the bank is owed on the mortgage--in other words, short of what is owed. Do you get any cash from it? No! You just avoid foreclosure.
However, there are some definite negatives.First, contrary to some claims, your credit is still going to be trashed if you do a short. It just won't likely be trashed quite as badly. For instance,if the rest of your credit is good and stays that way, you very well may qualify for a mortgage to buy another home in 3 years rather than the post-foreclosure seven.
As far as possible tax liability is concerned, traditional tax law makes ANY forgiven debts taxable income at regular tax rates in the year that the creditor (your lender) says, "Oh, what the hell--forget it; let's let bygones be bygones." However, due to the severity of the foreclosure/mortgage crisis of the past few years, a law was passed by the Feds that exempts some (NOT all) borrowers who do shorts from being liable for income taxes on the forgiven amount of the mortgage. So, how do you know if you're exempt? Call your accountant and/or your attorney. This advice also goes for just doing a short--protect yourself on the obligations of your proposed short and make certain the docs for the transaction aren't any more onerous to you than is absolutely necessary!
Good luck!