Attention California

Well, it's the start of Labor Day weekend and amidst all of the long weekend relaxation, beach going or whatever you plan to do,a brief item of note has come up fpor those in California. The state's Atty. General, Kamala Harris, has announced that the final parts of the California Homeowners Bill of Rights have passed both houses of the legislature. They only await Governor Brown's signature to become law and begin helping California homeowners. For details, check with your legislator or the Atty. General's office. Have a great holiday weekend and see you in the autumn!

IMPORTANT: OHIO FORECLOSEES: If you're a victim of foreclosure in the state of Ohio, you may want to pay attention. While most foreclosures are unfortunately legitimate, there are, unfortunately, those that turn out to be fraudulent or erroneous and that possibly should not have occurred. In late July, a suit was filed in Cuyahoga County Common Pleas Court, alleging fraud in a number of foreclosures. Seven homeowners were named as plaintiffs, but as it's a class action suit, others can be added. For details, check with the firm filing the lawsuit: Kaufman & Co. of Cleveland. There are also four or five other law firms involved in the filing, but a call to Kaufman should reveal if you're someone who should consider joining in as a plaintiff. As always, good luck.

HOMEOWNERS RESOURCES TO HELP AVOID FORECLOSURE: You've heard me talk about the recent $25 Bn settlement between 49 states and the five largest mortgage lenders, as well as a number of other recent items to help you avoid a possible foreclosure. In line with that information, I'm providing for your info and use a number of websites that give specific guidance and help in these and related areas. Take them down; contact as many as you feel would be helpful in your case and good luck in your efforts. (Due to space involved in their info, I cannot provide specific info on each one beyond what I note here. The rest of the details will come when you log on. www.nationalmortgagesettlement.com -- this relates to the actual $25Bn settlement; www.oag.ca.gov/hbor -- helps with the recently passed California Homeowner Bill of Rights which goes into effect on 1-1-13; www.hud.gov/counseling -- alternatively, call (800) 569-4287; helps homeowners seek loan mods for free; www.independentforeclosurereview.com -- Helps those who were foreclosed upon in 2009 and 2010 get a fre review of the foreclosure by federal regulators to check for errors in the process, which could lead to compensation to the homeowner.Deadline is 12-31-12, so don't wait!; www.consumerfinance.gov -- From the new government agency that oversees both housing issues and credit cards, from the consumer's point of view; www.makinghomeaffordable.gov -- the site for the Federal foreclosure prevention program, it has links to a number of subjects including loan mods, underwater refis of homes, reduction of loan principal and loan payment forbearance for unemployed owners; www.keepyourhomecalifornia.org -- the site for a California state run program offering temporary mortgage help for unemployed, catch-up payment aid for those behind on payments, reduction of loan principal and other things. These may not cover the entire waterfront of helpful sites out there, but they make a damn good starting point. As always, good luck.

Foreclosure Even When You Pay Your Mortgage: Usually, when someone gets foreclosed upon, it is due to nonpayment on a mortgage or line of credit on the house. However, there are other, less well known circumstances that can lead to foreclosure that you ought to know about. These fall generally into the classification of "tax liens", and result from nonpayment of a tax or tax-based bill on the property. If you don't pay your property tax, it could be sold at foreclosure. What gets really surprising is that in some towns and counties, utility or other similar services are provided by the municipality and billed accordingly. If the homeowner doesn't pay, they are sold at foreclosure as unpaid tax liens, often for very small amounts of money. In one case in New Jersey, a man lost his home over a $140 water bill that wasn't paid on time. An investor bought the home at foreclosure for the $140, and then, after negotiations, resold it to the original owner for about $37,000. Nice profit, huh? Because of the cash shortages that many cities and towns now face, this is becoming an increasingly common practice. The city needing cash sells the lien to an investor, who then forecloses on the home. In another equally ridiculous, but very legal, case, a Washington, DC owner found his home being foreclosed over an allegedly delinquent property tax bill. It seems the city had erroneously removed a homestead tax exemption, resulting in an increased tax bill. He was not aware of the change as the removal of the exemption was erroneous and continued to pay what he thought was his correct property tax when due. The home was foreclosed by the purchaser of the tax lien, and the owner has had to hire an attorney and sue to reverse the tax sale and get his home back. Results still pending, but, as he notes, he did nothing wrong. The city erroneously revoked the exemption about 6 years ago, and has acknowledged the error by restoring it subsequently. So, the word here is keep just as close watch on your tax obligations and municipally provided services as you would your mortgage. Good luck.

What If You're Foreclosed? Those of you who regularly follow this blog know that it's designed to help you avoid foreclosure if at all possible. With that in mind, I regularly post the latest helpful info as I learn of it, often referring you on to additional information sources for still more info. But for some of you, no matter what you do to avoid the dreaded foreclosure, or for those of you who find yourself involved due to the problems of an unrelated owner (if, for example, you're a tenant), the axe does fall and the bank now owns the property. What do you do? Well, obviously the lender that has foreclosed wants the property vacant as soon as reasonably possible. If you don't go willingly, they can and will file an eviction action to get you out. Do you have to move? Most likely, yes. The bank, after all, does own the property and, like any homeowner, can evict folks that it doesn't want in the property. However, in many cases, they are willing to allow you a little bit of time to get your things packed and moved to where-ever you're going. Usually, the first person you'll see representing the bank is the real estate agent they've hired to handle the property's sale to a new owner. The Realtor is instructed to determine if anyone, former owner, tenant, whatever, is living there and what their plans are--how soon are they vacating; are they determined to stay as long as possible; whatever. In many cases, you will be able to negotiate the time you'll be allowed to stay as you prepare your departure. You very well may even be able to negotiate some cash from the foreclosing lender as a payment for your departure. These funds are generally referred to in the trade as Cash For Keys (CFK), and the amount you may receive varies from lender to lender and is also related to how long you plan to stay before leaving. The amounts I have seen offered have ranged from a few hundred dollars to as much in a couple of cases as $10,000. The payment is not usually per person. In other words, it makes little difference if there's just you there or if you have a family of ten. There is still only a single payment made, whatever the total. Some factors affecting the time you'll be able to remain involve such things as school term schedules, availability of your planned new residence to move in; or other important 'life' issues. My advice: if the foreclosure is legitimate, don't fight with the agent over when you'll leave. He/she is just the messenger, not to mention, your only point of contact with the bank for now. Explain your situation and why you want to be allowed to stay as long as you do. The agent will forward your wishes along to the bank that owns the property for their response. The agent will also usually be the one to provide the options of CFK, if it is offered. Again, the sooner you move, usually the more you get. If CFK isn't offered, you can tell the agent that you've heard that occupants frequently receive funds to help them move and could he see what the bank is willing to pay you in your case. Again, nothing ventured, nothing gained. There are no guarantees here, but asking never hurts. Finally, a word of caution: if you are provided with Cash for Keys, remember, it's definitely taxable as normal income. You'll receive a 1099 at the end of the year to file with your tax return next April 15. However, in spit of that ugly fact, usually the CFK payments can be a welcome bit of assistance at this very dark time in your life, so don't let their taxability defer you from accepting the payment. As always, good luck.

California Homeowners Bill of Rights--Update: This bill, previously discussed here, was signed into law on the eleventh by Governor Brown. These provisions take effect January 1, 2013. If you think you were wronged due to some of the actions undertaken by your lender in foreclosing or trying to foreclose on your home, call an attorney, or contact the state Attyorney General's office. Good luck.

Were Your Wronged By Wells?: Yesterday a settlement with the Federal Givernment on claims of racial discrimination in making loans was agreed to by Wells Fargo. They will write a rather large check to settle the claims arising from a Federal investigation that alleged independent brokers steered minority borrowers to Wells, where they were placed in higher interest rate loans than white borrowers in similar economic circumstances. Wells did not admit any guilt in mkaing the settlement. Oh, you ask how much was the check Wells wrote to settle? It was $175 million. Begs the question if you ar4e a minority borrower with a mortgage from Wells, were you discriminated, and, if so, do you have a potential action against them for damages based on any discrimination that may have occured? Check with your attorney if you think so. Good luck.