Foreclosure - The Last Resort

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With millions of homeowners either in, or desperately trying to avoid foreclosure, it would seem reasonable that lenders would be eager to modify the loans on their books before they end up with another foreclosure.

You would think.

But on July 28, the Secretary of the U.S. Treasury had a meeting with representatives of the top 25 mortgage servicing companies along with representatives of ACORN -the Association of Community Organizations for Reform Now, Neighborworks, the Neighborhood Assistance Corporation of America and the National Fair Housing Alliance to discuss the abysmal rate at which modifications are taking place.

Earlier this year, the Obama administration disclosed their foreclosure prevention plan for troubled homeowners. It was estimated that 4 million homeowners could be assisted through this program.

With only 200,000 home being modified since February, and millions currently in foreclosure; one can barely call this progress ratio a success.

With all the hype in the media, one of the main things that they aren’t telling the public is why the loans aren’t getting modified. Since the lenders are keeping the reasons behind closed doors, no one “officially” knows the details. What can be seen from all the complaints and cries for help is that more homes are being refused loan modification than approved. This is not based on hard fact, but rather on an educated guess.

What is the hard part about getting a modification?

The answer is a little factor called Net Present Value.

On September 15th of last year, the Mortgage Bankers Association held a compliance conference to discuss:

Net Present Value analysis and Loan Modifications. The primary focus was onhow mortgage bankers and servicers should use Net Present Value analysis to ascertain what is in the best interest of investors?.

Did you catch that? What is in the best interest of the investors not whats in the best interest of the Home Owners..

Without getting too technical, Net Present Value or NPV compares the value of a dollar today, to the value of that same dollar in the future. NPV is used to determine whether investors in U.S. mortgages would be better off modifying your existing mortgage or foreclosing on your mortgage at some time in the future.

Truth be told, while all the paperwork you need to file with your lender when requesting a modification may be perfectly filled out and you may look ?on paper? like a perfect candidate for a modification, you can still be denied because of an NPV calculation your lender performs. Fair? Probably not. But it is the reality of the game. And unfortunately, there is not all that much you can do about it except for this?

If you are speaking to an attorney or other loan modification expert and they say something like We have handled thousands of loan modifications and we’ll be able to get one for you, run like hell.

The fact is, no company or attorney has gotten thousands of loan modifications for anyone! If you are seeking expert advise or assistance with your modification, simply ask them if Net Present Value calculations will come into play with your modification request. 9 out of 10 experts won’t be able to answer you. And you will immediately know that you are not dealing with an expert.

Article submitted by: 911 Foreclosure - Loan Modification Advice
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After many years of providing mortgages through it’s mortgage broker network, Taylor, Bean and Whitaker closes shop after the Feds barred the company from originating any new FHA loans. Ginnie Mae also terminated the company’s ability to issue mortgage-backed securities.

With a FHA rescue out of the picture and additional financing unavailable, the companies only other option was to close its doors. Management contacted the employees conveying their disappointment and explaining that another option was unavailable. Now recognize that Taylor, Bean and Whitaker was not a tiny company. At the time of the closure, they employed almost 2,000 people.

Federal authorities “raided” the company’s main offices in Ocala, Florida on August 3, 2009.

Observe that I put “raided” in quotes? This extends from a media term invoking thoughts of Al Capone being chased by Elliot Ness. But in all actuality, this search was warranted. Taylor, Bean and Whitaker had failed to submit required financial reports which raised the red flag. It was also stated that TBW failed to disclose irregular transactions, further raising the alert of Fraud.

Starting as a small town retail mortgage firm in 1982, Taylor, Bean and Whitaker grew from the grass roots. However in the past 10 years, TBW has grown substantially to be come on of the top mortgage resellers in America.

The outcome of this termination of service is that another pillar is broken in the cornerstone of the mortgage brokerage industry. Now I am not personally saying that I have any direct knowledge of the dealings of the firm and thus not above reproach. From my information, TBW was one of the leading mortgage brokerages and their closure leaves the rest of the industry without another competitor or option. .

What comes to the next evolution of the mortgage industry? Well, pay attention because we’re already pulling back the veil. Mortgage borrowers can choose from a Governmental Lender Service or from the remnants of the once powerful brokerage networks. But Who’s LEFT!? Only a few small Local Lenders that still portfolio their own Loans. I hope you can see that your choices are being eliminated since it becomes harder and harder each day to find a broker. Now you may choose a fixed rate - oh, you can choose 30 or 20 or even 15 years or one of a couple of adjustable programs left - 5, 7 or 10 year fixed rate products that convert to floating rates after the fixed rate portion ends. Is that what you call choice? Well that’s all that’s left! And you call this good for business.

Article submitted by: 911 Foreclosure - Loan Modification Advice
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Modern media and Congressmen miss the true problem of the foreclosure landslide. The real villain of the Great Real Estate Depression is a drastic reversal of mortgage lending process and how lenders handle modifications.

The housing boom was fueled by easy money – lenders were awash with funds from pension funds, insurance companies and especially Wall St. investors. These funds were offered to mortgage seekers that clearly should not have received them. 100% financing? Sure… how ’bout we finance your closing costs too? Can’t verify your income? No problem… just tell us what you earn; we’ll believe you! Credit score below 600? That’s ok…. your home will continue to appreciate so WE KNOW you’ll do what’s necessary to keep those payments coming. Oh, and if you have any trouble keeping up with the interest payments, don’t worry, we’ll let you pay less than the interest if you like!

Are you freaking Kidding me! I’m afraid I wish I was. This was the state of the market from 2007 – 2008. I should know, lender visited my site daily at Mortgage123.com asking if we would extend these lines of credit. And we did… Everyone did.

On the other hand, in a quick reversal: today’s housing epidemic was caused by the banks going to the extreme in the other direction. Today, you can’t even get financing on a mortgage unless you have perfect credit, sufficient and verifiable income and ascertained assets. Effectively, lenders have basically cut off half of the mortgage market!

Real estate is a product like anything else… subtracts half of the potential buyers, watch prices fall. It’s a simple calculation. If you’re looking to sell your home today, just forget about those with lower than a 620 score. And forget most of the self employed. They typically cannot show the income required to qualify for the mortgage amount they can afford to pay. So take em out of the equation. Buyers only have the FHA, Fannie Mae and Freddie Mac… and aside from down payment requirements, these three entities have very similar underwriting standards. So if you can’t get one of those loans, sorry. I should mention that in rural areas, USDA loans are another option. Another government agency loan? Private sector lending? What’s that?

But just wait. It gets worse. What about all those foreclosed properties that have been taken back by their lenders? These properties are being grossly mismanaged. Many of them don’t have for-sale signs. Very few of them are being maintained. Most potential home buyers have no desire to even look at these properties – they don’t want to rehab properties. And even investors that can afford the 20% – 25% down payments that are required today cannot get traditional financing because of the condition of these properties. So they sit on the market. And eventually, the banks lower their prices further depressing the value of surrounding properties.

And just to make matters even worse, these homes don’t qualify for FHA financing. In today’s market, FHA financing represents the most lenient financing available for home-buyers today. But FHA has fairly strict property standards – these “REO’s” (properties owned by lenders) typically fail to pass an FHA appraisal. With all the new regulations and with all the stimulus money being handed out, Mr. Obama, we need regulations requiring lenders to get their foreclosed properties in order. These properties need to be handled with care and attention. Additionally, lenders need to begin relaxing their absurd underwriting guidelines. I have been in the mortgage business since the early 80’s and never in all that time have underwriting guidelines been as strict as today.

So what option do we have? Well reach out to the representatives, email your congressman, petition to your senator and get your voice out there. We need to force Washington to do something to fix the regulations barring lenders from making the necessary modifications to fix the housing market. We need to put policies in place to force the creditors to do the right thing for the housing market.

I know that as much as I complain about the market, most people won’t take action. So I have decided to draft my own appeal to Washington to get our voices heard. If you agree with my views, take the time to join our causes at www.millionhomeownermarch.com. You can read my proposal there. Believe me if we don’t do something now, we may be looking at a even deeper economic depression.

Article by: 911-Foreclosure
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In mid-July, the Federal Trade Commission and the California Attorney General’s Office working in tandem with the California Real Estate Department, jointly announced lawsuits, injunctions and fines against 189 companies across the nation, claiming they deceived distressed homeowners through various loan modification and foreclosure rescue schemes.

California, along with Arizona, Nevada and Florida were ground zero during the sub prime mortgage debacle. Some of the very same people involved in granting exotic mortgages to unqualified borrowers are now out in force offering to modify the very same mortgages they once originated.

Most of the unscrupulous companies charge heavy upfront fees and then do little if any follow up once they receive the money. Desperate homeowners seeking a way out of financial straits are paying $1,500 - $4,000 to get help. Often, that money is a total waste.
The Fox News report that accompanies this article clearly displays one loan modification company’s acceptance of the charges being thrust against them. It is clear that this company’s outlook is solely focused on their “limited outlook” on what they consider a success. What the movie or visit http://www.youtube.com/loanmodhelpme to view it in our channel.

Hundreds of foreclosure rescue companies are being brought to suit for charging “advanced fees” for the loan modification. In order for a Loan Modification Company to charge an upfront fee, the arrangement must be approved through the states Real Estate Department who reviews the legalities of the contract.

Here is a list illegal companies that have been marked by the California Department of Real Estate as being fraudulent. http://www.dre.ca.gov/cons_drs.asp.Also here is a list of companies that have engaged in business while not being licensed. http://secure.dre.ca.gov/publicasp/unlicenseddnr.asp

Looking at these lists of thousands of fraudulent companies, it is safe to say that they would like nothing better than to lighten an already distressed homeowner’s wallet. Be cautious of any company or individual that claims to charge upfront fees for Loan Modifications. It’s better to read more articles such as this to prepare yourself to avoid any scams that you can least afford.

Article brought to you by 911-Foreclosure.com
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While red tape is blocking the loan modification process, home owners find it may be easier to stay in their home. This column is credited to Todd Ruger whom originally brought this topic to light. In Sarasota County Florida, lawyers are instructing homeowners to stay put. With the flood of paperwork filing into the courts, this may be the best advice ever.

In a perfect world, working your loan modification with your lenders is the ideal solution. However, if this is not the case, at lease homeowners have an opportunity in their favor. If retaining possession of your home is not your primary concern, the staying rent free should be.

There is an exact process that must be followed for a lender to foreclosure on a property. Loan paperwork must be accurately completed and dubious loop holes must be scaled. One such example is that Lenders must provide proof of their right to foreclose on a property. This little secret could land you rent free in your home for up to two years time to either plan for life after foreclosure, or to finalize a plan that works for both homeowner and bank. By leaving your home immediately, you give your home to your lender without a fight. This is absolutely the worst possible thing to do. Even if you are not interested in keeping your home, this time can be spent towards building a nest egg which can carry you through the foreclosure process.

In Florida, a total of more than 46,000 were filed into foreclosure since 2006, estimated Todd. This is only the tip of the iceberg with the foreclosure crisis spinning out of control. With the courts saturated with current cases, it is not unusual for court motion to take months if not a years to be finalized.

Offering homeowners the chance to put away a few months of mortgage payments into their savings will offer many opportunities to move forward through the foreclosure process. By delaying the Banks, you are only helping yourself prepare for the future.

A 45 day extension filed by a Sarasota couple took 6 months for the courts to hear the reason why they needed the extension. This is just one example of this process at work

If you are behind in your payments, you may want to look at how to stall your Lender and the the Loan Modification Process. After all, you owe it to yourself to take advantage of any opportunity which may keep your home.

In the city of Ft. Lauderdale foreclosure rates have skyrocketed during the last year. In fact, Ft. Lauderdale foreclosures have increased in unprecedented numbers This trend can be seen throughout Florida, and on an even bigger scale, throughout the United States. Americans are being overtaken by house payments. Banks are reclaiming houses as homeowners are unable to pay their mortgages. Families are being displaced and the once booming housing market is now stagnant. The American dream of homeownership is much more complicated than wanting to purchase a home. For those who are in a position to purchase a residential home or a vacation home in Florida there are a few traps to avoid.

It may be tempting for home buyers to jump on a good deal they come upon. Bear in mind, that even in this economy,with the current state of the market, if it seems too good to be true, it often is. Certainly there are bargains available. Short sales are abounding while many sellers are willing to take no more than what they owe in order to escape their mortgage payments. In those situations, often the seller, because of mounting debt may have been unable to maintain proper care of their home. If every dollar is going toward paying creditors, that leaves little extra for home maintenance. A buyer should be sure to request a thorough professional inspection of the property. This will help bring to light those things which has been neglected. If an inspection is not possible, proceed with caution. Plan for additional expenses, above and beyond the negotiated contract price. Additionally, it is important to make sure that you are buying a property free and clear. Check to make sure no liens exist against the property. This could void a contract in the end.

Those searching for a homemay also be tempted to fall for the “bigger is better” myth. The idea of adding square footage to your place of residence is not a bad idea on the surface. Maybe you are quickly outgrowing your current dwelling. Maybe you have a baby on the way and could use an extra bedroom or playroom. Now may be an excellent time to buy up. Houses typically are selling for less dollars per square foot than in past months. Remember though, that your current home is likely to sell for less too. Will the expected profit in your existing home satisfy your financial goals? Additionally, is a move to a bigger home worth the hassle of selling your current home. For many people the answer is yes, but for others, the inconvenience may be too great. Also keep in mind, a move to a larger home will most likely require a larger monthly utilities bill. Residential maintenance may also be more costly. Is your pocketbook ready to handle those commitments?

House hunters should take heed not to get caught up in the frenzy of buying. As a house hunter it is very important to get good assistance with your purchase. A licensed real estate agent can help a buyer make sure that they are indeed doing everything they can to make a wise purchase. Navigating the journey without professional assistance, especially when purchasing a home through short sale or mortgage default, can be a tricky proposition. Agents are always at the ready to draw up paperwork, as well as, review contracts with their clients. Agents can also provide detailed home buying information.

When Sally was looking to make a long distance move, she contacted a licensed Fort Lauderdale real estate agent agent. She felt sure this would be a wise decision. She wasn’t sure whether she would be looking at traditional properties in the area or if she would take a look at the many Fort Lauderdale foreclosures that were available. Whatever her decision, she knew she needed someone to understood the necessity of asking for help as she attempted a relocation. Having been born and raised in Maine, and having attended school out in California, she was unfamiliar with the Florida area. She was a little overwhelmed moving to a new city, and felt slightly intimidated by her unfamiliar surroundings. She wanted to use all the resources that were at her disposal to get acclimated. She found a number of useful resources where she could turn to get better acquainted with her new town.

As Sally did, many relocating individuals and families maximize the services of a home buyer’s representative for home purchase advice. Sure, a buyer’s representative can provide invaluable information regarding the housing market, but they can also give much information about the communities where properties are for sale. A valuable representative will be aware that their clients are interested in purchasing much more than a house. Most assuredly, a client is purchasing a community, and yes, even a lifestyle. Buyer’s representatives usually know plenty of useful statistics that might be of interest to their clients. It is not unusual for a representative to have at hand community crime statistics, school system rankings, and local points of interest, be they historical, cultural, educational, or recreational.

Another point of reference for those making a long distance move is to consult with the local chamber of commerce. The chamber of commerce offers a wealth of information. Whether one is accessing the chamber’s website or utilizing, in person, the knowledge of the chamber’s helpful people, one can quickly gain valuable facts. From weather information to a calendar of events, to local church listings, it’s all available. Also sure to be compiled is a listing of local businesses. One should also be able to find area specific maps as well. Most importantly, their services are a courtesy to the public.

Perhaps one of the most natural ways to get acquainted with a new community is to simply visit some local establishments. It could be well worth one’s time to spend a couple hours sitting in the coffee house nearest one’s home. View all of the bulletin board postings, talk with the baristas, and visit with fellow patrons. If not the coffee house, how about the library, the doughnut shop, the dog park, or even a community church or synagogue? Good old fashioned word-of-mouth is sometimes the best way to get connected with all scheduled events around town. Those who have lived in an area for a number of years are often more than pleased to educate newcomers. Most of the time people who’ve lived in a city many years will be familiar with more than just popular tourist attractions. Plus, they are a wealth of information.

Article written by 911-Foreclosure.com
“What if Your Lender CAN’T Produce the Note?” is an article written by Terry Smiljanich and published on the Consumer Warning Network in March 2009. It focuses on a effective strategy for borrowers who may be confronted with a future foreclosure on their home by their creditors.
The Consumer Warning Network published an article called “Produce the Note” in June 2008, and many homeowners facing foreclosure are using the principles contained in it as part of their defence in Court. This is not a legal loop-hole or technicality, but a serious and important issue that needs to be properly understood by all homeowners and lenders as well as the Courts.

It is the responsibility of the lender to prove that they have a legal and legitimate right to foreclose on a property. The lender, or person to whom the money is owed, proves this by producing the original note containing the signature of the person who they claim owes them money. The note must be the original copy, not even a digital scan

Before a Lender can proceed with the foreclosure process, “the homeowner has the right to force the lender to present the original promissory note in the courts”, affirms Smiljanich But what happens if the creditor states that they have lost the “original” note?

In the “Uniform Commercial Code” which has been adopted by many States, Section 3-309 contains a “specific provision” that deals with this subject. It highlights that certain procedures must be met before a promissory note may be implemented without the original being present.. It is up to the lender to legally prove all 4 conditions.

The Court will determine whether or not the lender has proven their right to foreclose. The Court needs to be thorough in its resolve that when the note was lost or stolen, the lender was present.. The Courts need to understand that this matter is not a mere technicality and enforce the “full proof”, because it is the homeowner or borrower who stands to lose if the incorrect person is allowed to foreclose on the property.

As Smiljanich explains, “even if a random instance of the note ever popped up,, if someone later turns up with the original note and proves that it is the proper holder of the note……. The original borrower is STILL LIABLE.”

This article comes at an impecable time and homeowners faced with foreclosure need to be aware of the requirements of the law so that they can properly protect themselves and their property.

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