New Help For Those Seeking Loan Modifications
Posted by Rachel LaMar, J.D. | Leave A Comment »
Facing foreclosure? Unable to make mortgage payments? Have you tried to get a modification and don’t know how to go about it on your own? There may be free assistance available to you.
Fannie Mae and Freddie Mac recently announced two new options to help delinquent homeowners with loan modification issues. To learn more about these options please visit my newest blog at http://www.RachelLaMarRealEstate.com/blog/?p=453.
Related Posts: Foreclosure Avoidance, foreclosure options, foreclosure prevention, Foreclosures, Homeowners, rachel lamar, San Diego
Another Change in Laws to Help Struggling Homeowners
Posted by Rachel LaMar, J.D. | Currently 2 Comments »
This past week the Obama administration signed into law changes to the current Help for Homeowners Program (H4H) in order to actually help more homeowners. The H4H program meant well but was not in fact assisting anyone (there was only ONE documented case of assistance in the months since it’s inception, with the preliminary targeted goal of assisting 400,000 families).
The new law, Helping Families Save Their Homes Act of 2009, streamlines how HUD will support thousands of homeless support programs across America. The main crux of this new program 
is to provide MORE incentives to both homeowners and lenders to rework loans and save homes from foreclosure–helping homeowners get into more affordable fixed rate loans insured by the FHA. This will be accomplished by easing the eligibility requirements , reducing the cost of the program and giving the FHA power to offer more substantial loan modifications.
FHA will have more power to create programs and use enforcement tools to police lenders who do not use fair and realistic marketing tactics, thus keeping “bad” lenders out of the FHA programs.
The new law will also allow HUD to help more local homeless housing and service programs, and also will give communities resources to use federal funds in positive ways to assist in needed areas and programs.
Finally, the changes aim at helping those who cannot get a loan modification avoid foreclosure by using the U.S Treasury Department’s deed in lieu of foreclosure option (also called “cash for keys”). This is where a homeowner turns over their keys and title to the home to the lender and the lender forgives the debt, in addition to providing a small cash incentive to the homeowner (usually around $1,000). Deeds in lieu have been difficult to obtain but the new program seeks to change that for those who do not qualify for other options.
For detailed information on the new program please visit http://www.whitehouse.gov/the_press_office/Reforms-for-American-Homeowners-and-Consumers-President-Obama-Signs-the-Helping-Families-Save-their-Homes-Act-and-the-Fraud-Enforcement-and-Recovery-Act/.
Related Posts: Foreclosure Avoidance, foreclosure options, foreclosure prevention, Foreclosures, Homeowners, Mortgage News, San Diego
MORE Relief for Struggling Homeowners
Posted by Rachel LaMar, J.D. | Currently 1 Comment »
Yesterday the Obama administration announced new details to the homeowner assistance programs that may widen the gap to help more people with modifications under the existing plans. The new additions to the Making Home Affordable program center around second liens and incorporating the Hope for Homeowner Program with the Making Home Affordable program.
Currently under the FHA’s Hope for Homeowner Program a borrower can modify their first loan and the lender is required to accept payoff below the current market value of the home. This allows the borrower to refinance into a new FHA-guaranteed loan, which gives the borrower equity in the home and takes them out of the position of being upside-down.
The problem with this program is that it realistically only applied to borrowers with one lien–if you had a second lien on your property it was up to the lenders to detemine whether you would qualify, but many people did not (because the second lien holder ends up losing too much money).
The changes announced yesterday would create a Second Lien Program, which will allow for an automatic reduction on the associated second lien according to a pre-set schedule. Service providers will also have the option to eliminate the second lien by agreeing to take a lump sum payment (under a pre-determined formula) instead. This would mean that the second lien would be completely extinguished, which would give the borrower a stronger chance of getting a modification under the Making Home Affordable program.
This is big news. Also important is that service providers, when evaluating borrowers for a modification under Hope for Homeowners, will be required to offer the Hope for Homeowners option to borrowers when it finds that the borrowers qualify under the plan–thus borrowers will no longer have to keep calling to see if they in fact qualified.
According to the Administration currently over 75 percent of all loans in the United States now fall under the blanket of the Making Home Affordable Program. To find out more about the programs and the new details, go to www.MakingHomeAffordable.gov.
If you are a homeowner and would like to submit a question go to www.MakingHomeAffordable.gov/feedback.html. Answers to selected questions will be posted at www.MakingHomeAffordable.gov/asked-and-answered.html. If you have questions about qualifying for any programs or if you need somewhere to start looking for answers, you can call HopeNow, a free counseling service, at 888-995-HOPE.
Related Posts: Foreclosures, Homeowners, San Diego
Is It Time to Prepare for More Foreclosures?
Posted by Rachel LaMar, J.D. | Currently 3 Comments »
There has been a lot of information over the last few months about the new homeowner help plans to assist homeowners in lowering mortgage payments by modifications or refinancing. They sound great and pledge to offer help to millions of struggling homeowners, but do they really work? And if not, are we going to see foreclosures hit the market in record numbers?
The foreclosure moratorium that was instituted right before the holiday season at the end of 2008 put many homes about to face foreclosure on the table, so to speak. Most banks agreed to withhold initiating, or stop following through with, foreclosure proceedings at that time. It was to last until the first of the year in 2009, but with the swearing in of a new President right around the corner many banks opted to extend the moratorium to see what the new administration would do to help both the homeowners and the banks.
There were some plans put in place that sound great in theory, and there are some people who have likely been assisted under these plans (if you are one I would LOVE to hear from you and learn of your experience, so please send me an email). The sad fact is that many people have not been helped, and those who are trying to seek help may not be able to qualify for loan modifications if they are no longer employed.
Banks who have been sitting on the loans that were placed under moratorium are now starting to initiate foreclosure proceedings, and although the effect could be devastating to many homeowners it could mean a windfall for buyers and investors.
Currently there are less than 400 foreclosure properties in San Diego County. There are over 4,000 properties in pre-foreclosure. Notices of Default (NOD) have spiked to an all-time high. Many economists predict that in the next 1-5 months these pre-forclosures will become bank owned properties. One statistic predicted 5 MILLION more foreclosures between now and 2011 nationwide.
Another interesting fact is that there are currently bank owned properties in San Diego county that are not on the market. Some experts have speculated that this is because the banks know that they will have to sell them so low and this will effect comparable sales. In turn, many people who are in trouble in those neighborhoods will then have even lower comps and will not want to or be able to make mortgage payments on their homes (because now there will be an even greater discrepancy between the amount owed on the loan and the current market value of the home). This in turn would increase the number of foreclosures and the number of bank owned properties. It is a Catch-22 and a vicious cycle.
Situations where the banks already own the property but the homeowner continues to live there for free (and has not even received notice of eviction) are not rare. I know of one in my own neighborhood–the bank took the home in February and the owners remain, having received NO NOTICE of eviction or any communication whatsoever from the lender. The bank may feel that it is better than having the property empty and having to pay for upkeep.
RealtyTrac, a reputable national source of real estate statistics , says that there may be as many as 600,000 properties nationwide that have been repossessed by banks but not yet on the market, with California likely representing 80,000 of those homes.
RealtyTrac further estimates that only 30 percent of foreclousres were listed fore sale in Multiple Listing Services (MLS). The rest of the homes are what is known as “shadow inventory.” Some have surmised that the banks are keeping these homes off the market and servicing these mortgages to conceal the extent of their losses. It also keeps housing prices higher by withholding these homes from the MLS’, which could avoid further loss for the lenders.
The news appears grim but if you are a buyer or investor waiting for the “bottom,” you are in a great position. With more foreclosures on the way you will have a lot of inventory to choose from. Get preapproved and be ready, as they are starting to hit MLS’ already. The power of negotiating is in your hands so find an agent who can help you get a great bargain.
If you are a homeowner afraid of losing your home, I will repeat my mantra: GET EDUCATED. Learn all your options so that you are ready for changes that are certain to come. There may be other options out there you have not considered. There are definitely resources you can use and free counseling services available to you. But DON’T WAIT until it is too late, because then you will not be the one with the power. If you want a great place to learn all about options go to www.MortgageWalkawayOptions.com.
Related Posts: Foreclosures, Mortgage News, Uncategorized
Good News for Unemployed Citigroup Mortgage Holders
Posted by Rachel LaMar, J.D. | Leave A Comment »
If you hold a mortgage with Citigroup and are unemployed, the announcement made March 3 can help you with your payments. Citigroup has created a new program whereby it will temporarily lower mortgage payments for borrowers who have recently lost their jobs. 
Qualifications:
1. Recent job loss (you must provide proof of unemployment and sign a form indicating you are seeking new employment)
2. Borrower must be at least 60 days behind in payments
3. The home must be your primary residence (you must live there)
4. The program applies only to loans lower than or equal to $417,500
The payments will be lowered to an average of $500 a month for up to three months, and interest and penalties will be waived during this time. Citigroup currently holds over 1.4 million mortgages and services four million additional loans which will NOT qualify under this program.
Citgroup indicated that they believe this new plan will assist thousands of borrowers, and help prevent more foreclosures as the downturn in the economy leads to job losses. They are also hopeful that their program will prompt other lenders to follow in their footsteps. This big announcement follows Citigroup’s earlier news in November that it planned to modify loan terms by as much as $20 billion for borrowers who are at risk of falling behind on loan payments, but are currently not in default as of yet (how effective this program is remains to be seen). Both plans on Citigroup’s table were created from within the company, and the company denies the federal government had any role in it’s programs.
This appears to be a good faith effort on Citigroup’s behalf to assist troubled borrowers. It is a win-win situation to attempt to help borrowers in any way, as foreclosures effect not only the borrowers but have a great financial impact on the lender as well. With unemployment rates climbing monthly (the Labor Department figures show an increase to 7.6% in January, up from 7.2% in December 2008), this may be a lifeline to Citigroup mortgage holders to buy them some time for find alternate employment. Let’s hope other lenders follow their lead in the coming days.
Related Posts: Foreclosures, Home Loans, Homeowners, Mortgage News, Uncategorized
