NEW RULES TO PROTECT AGAINST FORECLOSURE

NEW RULES TO PROTECT AGAINST FORECLOSURE: The Consumer Financial Protection Bureau (CPFB) has announced new rules that may help in avoiding foreclosure--or at least delaying it while you try to make some arrangements (refi, loan mod, etc.) to avoid the foreclosure. The title of this item is a bit misleading--if you don't pay your mortgage and are unable to get a loan mod, you WILL lose your home. However, the new rules can help. One is that lenders/servicers cannot commence foreclosure proceedings until at least 120 days after you miss a payment. In some states under traditional methods, a lender could file a notice of default, beginning the process, the day after you missed a payment. This new 120 day rule gives a homeowner more time to initiate and possibly complete some alternative plan to avoid foreclosure. Another rule requires lenders no longer follow a 'dual tracking' process. Under this process, even if you were seeking a loan mod from your lender, the foreclosure process ground on, often side by side with your loan mod app. You rarely had only a designated single person from the bank to talk to, and, consequently, the right hand never knew what the left was doing. Result? Foreclosure in many cases where you might have qualified for the mod, but for the foreclosure process going on. Yet another rule now requires that in cases where you've filed a loan application at least 37 days before a scheduled foreclosure sale date, the lender must give full consideration and decision to that app before continuing the foreclosure (this continuation would only then occur if your app was denied). Another rule requires that the lender or servicer provide you with written notice of your options once you have missed two payments, and also requires you be given acces to the person(s) responsible for updating the status of any loan app or mod app you may have in process. There area a number of other rules as well and the new rules do NOT apply to all lenders. Exempted form the rules are small lenders/servicers handling fewer than 5,000 loans. Want more details? Go Online: www.consumerfinance.gov, which is CFPB's web site. As always< Good Luck.

HUGE FORECLOSURE ABUSE SETTLEMENT: Federal regulators have reached a settlement with 14 major banks regarding mortgage foreclosure abuses and errors on past foreclosures. Totalling $10 Billion, distributions will include $3.75 Billion to homeowners who were foreclosed in 2009 and 2010. Among the 14 lenders are Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. Another $6 Billion will be provided to homeowners currently facing possible foreclosure because they are behind on their payments. If you were foreclosed upon in either of these years, or are in default currently on your mortgage, IMMEDIATELY CONTACT YOUR LENDER TO DETERMINE YOUR ELIGIBILITY for participation in these payouts. As always, I wish you Good Luck. This definitely is good news.

Help From The Cliff

On November 21,I had written here that the Mortgage Forgiveness Debt Relief Act was due to expire on December 31 (2 days ago), and strongly recommended that anyone possibly affected by its potential demise should immediately call, write or email their Congressional reps in the House & Senate, and demand that it be extended. Well, one of the many benefits of the passage late last night of a deal to avert the 'Fiscal Cliff' was inclusion in the bill averting the cliff of the extension for at least another year, to December 31, 2013. In case you have forgotten the details, the law allows homeowners going through short sales, modifications and/or foreclosures to avoid income tax liability on any forgiven debt as a result of the transaction. A cautionary reminder is also important here: only debt incurred on your home between two specific dates is covered. For details as to exactly how, or if, you are covered under the law, contact your accountant or tax preparer immediately if you are involved in any of these situations. Another benefit of the Cliff avoider is that, while capital gains taxes will increase from 15% to 20%, capital gains tax rates on sale of a personal residence will remain at 15%. So, if you are selling your home to avoide foreclosure (or for any other reason), and have a gain in value from when you purcheased it, you will still only pay capital gains tax at a rate of 15% of the gain, just as before the Cliff avoider passed last night. Congratulations to everyone in these circumstances, and a big 'thank you' to Congress for finally getting off its collective ass and doing something to help the country and its citizens! As we enter the New Year, continued Good Luck.

Write Your Congressmen/Senators!: For those of you who are, or have recently, undergone a foreclosure, short sale or principal reduction in your mortgage(s), an important date is soon to arrive. It's December 31, 2012. What, besides New Year's Eve, is so important about that date? It's the date that the Mortgage Debt Relief Act of 2007 is set to expire. If you're not familiar about the law, this is the federal law that Congress passed in 2007 to help homeowners avoid income tax liability on any amounts of mortgage debt written off by a lender in a short sale, foreclosure or principal reduction. Under already existing law, ANY debt that is forgiven by a lender is considered taxable income in the year it's forgiven. Worse, it's taxed at regular tax rates. So, let's say you did a short sale for $50,000 less than the amount of your mortgage. That means that the bank holding your loan forgave $50,000 and you would normally have to pay tax on that fifty grand as if you'd earned it as salary! Bad enough you lost your home--you then had to pay taxes on it as well! Well, Congress in 2007 passed the aforementioned law to help homeowners like you avoid such a tax obligation if you fit within a very broad set of parameters. (Check with your CPA.) So, getting back to the start of this item, that law is set to expire at year end. So far, fortyone state attorneys general have written to Congress asking for the law to be extended. DON'T SIT BACK AND WAIT FOR ACTION! CALL OR WRITE YOUR US SENATORS AND CONGRESSIONAL REPRESENTATIVES & TELL THEM YOU WANT THE LAW EXTENDED! DON'T WAIT! I know it's Thanksgiving and then you have to shop for the holidays. But the law will expire if nothing is done about it! CONTACT THEM NOW! The tax you save may be your own! Good luck.

POSSIBLE COMPENSATION FOR LENDER FORECLOSURE ERROR?: In an advertisement published in major newspapers across the country over the weekend, the Federal Reserve and Office of the Controller of the Currency (who regulates nationally chartered banks) list a number of lenders and servicing institutions who may have made errors in foreclosing on many homes nationally. The list of lenders is as follows: America's Servicing Co.; EMC; PNC Mortgage; Aurora Loan Services; EverBank/EverHome Mortgage Co,; Sovereign Bank; BAC Home Loans Servicing; Financial Freedom; SunTrust Mortgage; Beneficial; GMAC Mortgage; US Bank; Chase; HFC; Wachovia Mortgage; Citibank; HSBC; Washington Mutual (WaMu); CitiFinancial; IndyMac Mortgage Services; CitiMortgage; MetLife Bank; Wells Fargo Bank, NA; Countrywide; Nagtional City Mortgage; and Wilshire Credit Corporation. If, according to the ad, you feel there were errors made in or related to a foreclosure that cost you money, you can request a free review of your foreclosure by a neutral party, and you MAY get compensation for these errors. Compensation could be up to a maximum of $125,000 PLUS equity. Call (855) 778-0855 or go online: occ.gov/independentforeclosurereview or federalreserve.gov/consumerinfo/independent-foreclosure-review.htm . Sounds like a good thing for possible help if you were victimized by erroneous foreclosure action. Good luck.

BofA Paying It's Share!: In an announcement today, Bank of America has confirmed that it has already completed or approved for processing $15.8 Billion in consumer relief for 164,000 homeowners under its agreement in the recent mortgage settlement agreement it participated in. This is as of September 30. One form is forgiveness of first liens in the amount of $4.75 Billion in principal forgiveness offered to 30,000 borrowers. The bank has also provided short sale or deed in lieu settlements to an additional 62,000 borrowers. As far as second line borrowers, they have also been helped by BofA. In an other form of relief, the bank has provided interest rate relief to another 1,000 borrowers. If you're a BofA borrower, hopefully you've already been in one of these groups. If you are with BofA and haven't yet been offered any relief under the settlement, you should get in touch with BofA now to see what their plans are for you, and if your obligation is included in their relief activities. As always, Good Luck.

Is Your Loan LIBOR Pegged? Five Alabama homeowners have filed suit against a large group of lenders, BofA, Barclays and Citibank chief among them, for allegedly rigging the LIBOR rates that their mortgage loans are pegged to. The basis for their claims is simply that, if proven, the alleged rigging of the rates on their loans cost them a great deal more money than they otherwise would have had to pay without rigged interest rates. Who's right? Were their rates rigged? Those answers will have to wait for a court trial. However, if your loan is LIBOR-based and provided by one of the named lenders, you may want to have someone such as a lawyer and/or accountant review your loan documents and then compare them to the LIBOR rates that existed at the time of your loan. For that, you may also need to enlist the help of a banker from one of the large banks NOT named in the suit. Aside from extra costs, such a rigging could conceivably contribute to a foreclosure if the increased rigged cost made it difficult or impossible for you to pay your mortgage. Hoping you aren't a victim, Good Luck in your investigation.