All posts in Loan Modification

The link below identifies the Fannie Mae loss mitigation options that are available to assist borrowers experiencing financial hardship.

It is 19 pages and goes through a temporary and a long-term hardship. I am not an expert when it comes to this because I don’t do modifications but I wanted to make sure to share it with you.

https://www.efanniemae.com/sf/servicing/pdf/loanworkoutfactsheet.pdf

If you know of anyone in need of a loan modification I would recommend for them to attend this event.

The nonprofit Neighborhood Assistance Corporation of America — hero to the struggling homeowner, bully to big banks — said it will conduct its third South Florida mortgage counseling extravaganza Aug. 27-31 in West Palm Beach. 

The Boston-based group touts an 80 percent success rate, crediting much of the achievement to hundreds of bank representatives who attend its programs and meet face-to-face with homeowners.

http://articles.sun-sentinel.com/2010-08-13/business/fl-mortgage-modification-event-20100813_1_naca-neighborhood-assistance-corporation-loan-modification 

There was an article back in December about this and 80% that were expected to receive workouts within weeks according to CNNMoney. 

“Wynn was able to get his modification at a “Save the Dream” event offered by the Neighborhood Assistance Corporation of America (NACA) in New York City last Friday. Lenders from nearly all the major banks and servicers were in attendance and promising to restructure loans based on what borrowers could afford. As a result, many homeowners walked in with their mortgage problems and walked out with solutions. In fact, according to Bruce Marks, NACA’s founder, 40% of attendees left with decisions the same day. About 80% are expected to receive workouts within weeks. His organization has already hosted about 400,000 borrowers at more than a dozen of these events.”

http://money.cnn.com/2009/12/16/real_estate/great_mortgage_modifications/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

This is very real and I am sure there will be many that will buy the deficiency judgments from the banks for pennies on the dollar and then go after the homeowners. 

Lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don’t result in enough money to pay the mortgages in full, real estate and legal analysts say.

Under Florida law, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers’ assets.

http://articles.sun-sentinel.com/2010-05-22/business/fl-short-sale-debt-20100521_1_mortgages-lender-homeowners

This was interesting and something I did not know.

“While canceled debt originally used to buy or build a house can be exempted from tax filings, debt used for other purposes cannot. “I just thought I’d get out from under the house and that would be that,” she says.”

Make sure to always consult a CPA.  Another thing that is happening in South Florida right now is that they are going after people who claimed their property as a Homestead property, meaning they occupy the property as their primary residence, but it really wasn’t.  State and local governments are looking for ways to make up for lost revenue so you better be careful.

http://online.wsj.com/article/SB20001424052748703686304575228783947789118.html?mod=djemITP_h 

That’s quite a headline.  Unfortunately it is true and I am sure it is making people irate.  I would guess that this can happen because the banks are so unstaffed.  I have to imagine that it is pretty hard to staff up and take on more employees to handle foreclosures and short sales when the distressed sales are exactly why everyone had to let go of their employees. 

Apparently another reason this happens is due to disorganization.  “Communication breakdowns occur because of the way the servicers are structured. One division typically deals with modifications and another with foreclosures. Servicers also hire a local trustee or attorney to actually pursue foreclosure.”

I think it’s a combination of being understaffed, disorganized, and having employees who just don’t’ know what they are doing.  Everything to do with the mortgage business right now is a learning curve even for those who have been in the business for over 20 years.  You could never begin to understand this unless you were in the business so next time instead of yelling and screaming, try being more sympathetic.  Whether you are right or wrong you will get much further with that mindset.   

http://www.usatoday.com/money/economy/housing/2010-05-05-foreclosures05_CV_N.htm

This is just a proposal but it’s a bill filed in the US House of Representatives would allow mortgage borrowers to remain in their homes, as renters, for up to five years after receiving a foreclosure notice.

I guess it’s not a bad idea if the borrower who is not making their mortgage payments decides to make their rent payments.   It would create cash flow for the bank and allow home values to regain some value assuming that the market does stabilize. 

There are stipulations in order to qualify for this.  Yep, always a catch and you always need to read the fine print.  The right to rent program would be limited to homes purchased at or below the median price for its metropolitan statistical area, and must have been the borrower’s principal residence for no less than 2 years. Only mortgages originated before July 1, 2007 will be eligible.

http://www.housingwire.com/2010/04/29/house-democrats-introduce-right-to-rent-bill-for-borrowers-facing-foreclosure/?utm_source=rss&utm_medium=rss&utm_campaign=house-democrats-introduce-right-to-rent-bill-for-borrowers-facing-foreclosure 

I’m not going to hold my breath but here is what they are saying on Florida. 

Florida, which would receive $418 million, proposed using the majority of its allocation toward making mortgage payments for up to nine months for up to 12,000 unemployed borrowers. It also would commit $40 million toward providing up to $15,000 in down payments for 4,000 prospective home buyers.

http://online.wsj.com/article/SB20001424052748704464704575208390699479772.html?mod=djemITP_h