Expedited Foreclosure Bill Passes in Florida

At first blush, any law that talks about 'expedited foreclosure' would seem to be something that works against homeowners. However, in this case, the law, passed with bipartisan support in both houses of the Florida legislature, has a number of items that, in fact, work to the benefit of the homeowner who is facing foreclosure and unable to avoid it by any means at all. It only applies in the cases of when homeowners are not contesting the foreclosure, and, along with the lender, is seeking a speedy resolution to the specific foreclosure on their home. However, to the benefit of the homeowner, there are two very important details that are part of the law, and definitely benefit the homeowner. First, if there is a potential deficiency judgment that may be filed against the homeowner, it must be done in one year from date of foreclosure. Previously,a lender had up to five years to file such an action. For those of you unfamiliar with such an action, a deficiency judgment occurs in cases when the lender forecloses and, after sale of the home by them, nets less that they are owed. For example, you owe $300,000 and lose your home to foreclosure. When the bank sells it, they net only $175,000. The difference, $125,000 in this case, is the deficiency and the bank may legally sue you for that amount. So you've not only lost your home, you now face also owing them the difference that they couldn't get out of the home when they sold it. Not all states allow deficiencies, but many do. This law forces the bank to act more quickly or, if they fail to do so, terminates their right to come after you for a deficiency if they try after a year has passed from the foreclosure. The other benefit in the new law for homeowners is that a lender must prove it has the underlying promissory note from the loan before filing a foreclosure action. That note is the legal evidence of a debt that gives the lender the right to foreclose when you default on the mortgage. Often in the past, banks would say they had the right (and the note) to foreclose when in actual fact, they either couldn't find the note (for any number of reasons) or had lost it. No proof of note, no right to foreclose. With this law, the lender must show it actually physically possesses the note, or they cannot prevail in a foreclosure action. So, the word here is, if you're facing an unavoidable foreclosure, can't get a loan mod or do a short sale, check with your attorney about the protections this new law may provide you. If you can't afford a lawyer, call Legal Aid. That's what they're there for. Good Luck.

Smoother Short Sales

Short sales--not the most desirable path for most homeowners. However, there are, unfortunately, times when taking as foul tasting medicine is the best course. Short sales can be this medicine; sometimes short sales are at least a way of minimizing the personal damage to an owner's psyche and credit record. However, one of the biggest problems in trying to get a short sale completed is the hurdles that a lender always seems to place in front of the Seller. It's always, "You don't have all of the correct documents", or "this document is not filled out properly", or "we (the lender) don't agree with the valuation of your hoe", and on and on and on, ad nauseam. Well, at least in the case of Fannie Mae short sales, someone is attempting to do something to lessen the aggravation. Fannie has just announced a plan to streamline short sales that it is involved with. First announced this past February, it has been used successfully many thousands of short sales. When there is an accepted short sale offer, Fannie has the Realtors register the sale with them on www.Homepathforshortsales.com . Once registered, with the agent putting all relevant information, such as property address, MLS listing information, offer details, and subordinate lien information on this site. In addition, other supporting documents and information will be required such as scanned copies of the sales contract, estimated net sheet or HUD-1 settlement statement, and borrower authorization form. The site even has capability to smooth things out if issues such as problems with subordinate lien holders, sales amount or other items arise. In such instances, the agent asks the folks at Fannie to escalate the sale transaction process. On receipt of the escalation request, Fannie will contact the agent directly to closely review the hindering issue and try to commence a solution to it. This escalation process has already been successfully applied in over 10,000 short sales. So, if you have a loan with, or guaranteed by, Fannie, are having problems that cannot be remedied any other way and are actively considering a short sale, you might want to have your agent contact Fannie to take advantage of this process. As always, Good Luck.

ATTN: New York HSBC Borrowers!

If you have a home mortgage in NY state, and the lender is HSBC, listen up!! Apparently, under New York state law, before a lender can foreclose, they must file for what is called a Request for Judicial Intervention (RJI) within 60 days of commencing the foreclosure process. This is to possibly help homeowners avoid foreclosure. What the RJI does is to hold a judicial settlement conference between lender and borrower to allow the borrower to propose alternate methods to foreclosure on their homes. These could include loan mods or short sales, as well as other alternatives to the foreclosure to assist the homeowner retain the house. The NY state Attorney General has filed suit against HSBC alleging that the bank has failed to file the RJI's in a prompt manner (within the legal time limit), thus hindering homeowners from saving their homes from foreclosure. “Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” said Attorney General Schneiderman. “For homeowners facing foreclosure, time is their greatest enemy. Every day spent waiting for a settlement conference is a day that the lender piles on additional interest, fees and penalties and the homeowner falls further behind.” According to the AG's office, over 300 cases have been identified where this has happened. These 300 cases were located in just four of New York's counties: Erie, Monroe, Suffolk and Bronx. However, if the bank has failed to do so in four counties, one must wonder if it has also done so in other parts of the state. So, the word here is: if your loan is with HSBC and you're having trouble with it, possibly facing foreclosure, you may want to contact the NY Atty. General's office and ask for some intervention on its part. As always, Good Luck.

Bank Settlement Paying Agent

For some reason the electronics powering this blog cut me off before I could supply the contact info for the bank settlement paying agent. So, without further delay, here it is: Rust Consulting; (888) 952-9105. As always, I wish you Good Luck.

Bank Settlements Nearing Completion

It was just announced that the five banks in the major foreclosure settlement put together last year have nearly completed their agreed upon obligations to pay out money to aggrieved homeowners and former homeowners who were foreclosed upon wrongly. A total of $50.6 Billion has been provided to homeowners and former homeowners by the five banks in last year's settlement: BofA; Chase; Wells Fargo; Citigroup and Ally Financial (former GMAC). This sum has been paid out to more than 621,700 borrowers. In fact, BofA claims it 'may' have actually exceeded its obligations under the agreement and plans to continue its outreach program to homeowners needing this assistance. The above figure is the sum of not only the aforementioned settlement, but also all other types of relief provided to borrowers by the five institutions. BofA has provided $29.2 Bn in relief to 320,000 homeowners; JP Morgan Chase claims that 126,000 customers have received $11 Bn in relief; Wells claims that 93,000 customers have received aid totaling 90% of its obligations. Ally's settlement entity, ResCap, is credited by the Comptroller of the Currency with achieving 100% of its agreed upon goal. As noted previously, if you think you are entitled to relief from the settlement or any related programs, contact the Comptroller or call the paying agent:

Fannie, Freddie Making Mods Easier

In a new move, both GSE's Fannie Mae and Freddie Mac, are moving to start a new program making loan mods easier in many cases. Already announced, the Streamlined Modification Program will provide those who qualify an easier time of it in obtaining a loan mod of their Fannie or Freddie backed loans. Originally scheduled for a July 1 start, both GSE's are now using the plan. Basically, it makes a borrower eligible if they are at least 90 days delinquent, but not more than 720 days (almost two years) past due. The loan itself has eligibility requirements as well. It must be a first lien loan that is already at least a year old, and have a loan to value ration of at least 80%. If a borrower and loan fall within these parameters, then that borrower may qualify for the mod without having to submit documentation on his/her finances or hardship situation. If he/she receives one of these streamlined mods, it initially will be made as a trial modification for an initial period of three months. As long as the borrower makes all payments on time during that initial three months, the mod will then become permanent. So, if your loan is tied to either Fannie or Freddie and you think you fit into the qualification parameters mentioned above, get in touch with the folks at Fannie or Freddie right away! The money you save could also save your home! Good Luck.

Update On Florida Foreclosure Law

Regular followers of this blog may recall the announcement that a bill was wending its way through the Florida legislature to force lenders to prove they have the appropriate loan documents allowing them to foreclose before they commence the process of foreclosing on someone's home. Well, the bill has cleared both houses of the legislature and is now on the desk of Gov. Rick Scott for signature. No info is available on whether the governor plans to sign or not, but it did pass with healthy bipartisan margins in both houses: 26-13 in the Senate and 87-26 in the House, so it is reasonable to expect enactment.