California Foreclosure Moratorium
California imposed a 90-day moratorium on housing foreclosures called the California Foreclosure Prevention Act, similar to the Obama Making Homes Affordable Plan that took affect on June 15, 2009. Unfortunately, it does not guarantee homeowners a loan modification and may do little to stop a trustee sale.
We recieve calls to our firm every day from homeowners who have tried to reach out for help under these plans and should qualify, but they are denied or turned away. In frustration, they have to hire an attorney to fight for them and their home. Read more
Slow Start to U.S. Plan for Modifying Mortgages
The NY Times says Washington is off to a slow start:
So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official. At the same time, foreclosures continue apace. RealtyTrac reported Wednesday that foreclosure filings reached 342,000 last month, up 32 percent from April 2008. Moody’s has estimated that more than 2.1 million homeowners will lose their homes this year.
Because of the size and complexity of the modification program, the administration has only recently assembled most Read more
Obama Administration’s Housing Fix
Treasury Secretary Tim Geithner announces new steps by the Obama Administration aimed at helping troubled homeowners, reports CNBC’s Diana Olick; with Tanya Acker, attorney/Democratic strategist.
Fed Casts Doubt on Govt Mod Push
The new Federal Reserve paper challenges this conventional wisdom and argues that servicers are not missing sensible opportunities to avoid foreclosure by reducing payments or principal.
The first piece of evidence supporting their claim is that in their sample, among comparable mortgages, loan modifications appear to be equally common among loans held “in portfolio” and loans that are securitized. When banks hold loans in portfolio then property rights reside squarely with the bank and there can be no contracting difficulties. If bondholder suits were really restricting the modification of securitized loans, then there should be fewer modifications of such loans, but the rate of modification is roughly the same.
Fannie Mae to Tap $19 Billion in Treasury Capital
May 8 (Bloomberg) — Fannie Mae, operating under a federal conservatorship, asked the U.S. Treasury for a $19 billion capital investment and raised the possibility that its long-term survival may be dependent on continued government funding.
Fannie Mae, which took $15.2 billion in aid on March 31, cited the “unprecedented” housing market slump and government- mandated programs that are creating “conflicts in strategic and day-to-day decision Read more
Senate Passes Loan Modification Bill
The US Senate on Wednesday passed legislation that seeks to prop up the housing market by giving mortgage servicers freedom to modify problem home loans without fear of investor lawsuits.
The bill also revamps the Hope for Homeowners programme aimed at helping borrowers remortgage and raises the Federal Deposit Insurance Corporation’s coverage on individual bank accounts and its ability to Read more
SC court halts thousands of home foreclosure sales
COLUMBIA, S.C. (AP) — South Carolina’s highest court on Tuesday temporarily stopped thousands of pending foreclosure sales in the state to give homeowners more time to take advantage of a new federal program to help them refinance mortgages.
The injunction — which mortgage experts said appeared to be the nation’s first court-ordered stop for an entire state — prevents judges in South Carolina from finalizing foreclosure sales on properties guaranteed by Freddie Mac, Fannie Mae or any other mortgage company that has signed on to a federal assistance program. Read more
A Short Sale May Not Mean You’re Home Free
Financially troubled borrowers may think that foreclosure or a short sale of their home means their mortgage woes are over.
Not necessarily.
Some homeowners are finding that when they sell their homes for less than the outstanding mortgages — a so-called short sale — their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed. Read more
Bankruptcy Judge Loan Modification Plan Hits Wall in Senate
The bankruptcy bill, sponsored by Sen. Richard Durbin (D-Ill.), permits bankruptcy judges to reduce, or “cramdown,” homeowners’ mortgage payments to help borrowers stay in their homes — an option currently available to save vacation homes, yachts and almost any other valuable asset, but not primary homes. The House passed a similar bill in March, but it’s been stalled in the upper chamber while Durbin and other Senate leaders tried for weeks to negotiate the support of the giants of the finance industry, including Bank of America, Wells Fargo, JP Morgan Chase and the Credit Union National Association.
A central element of the Democrats’ strategy to stabilize the economy — empowering homeowners to prevent foreclosures through bankruptcy — has hit a wall in the Senate, where fierce opposition from the finance industry is threatening to kill the proposal this week. Read more
2nd loan modifications and the OBAMA PLAN
Well today the news broke about President Obama ‘s new new stimulus plan, or as they put it his “expansion” to the foreclosure prevention program. Previously the President and all the supporting cast lined up to explain how with $75 billion, the housing crisis could be solved. Lenders would modify loans in mass and borrowers would finally get the relief they need. Fast-forward a couple months and now we are seeing lenders continuing their reluctance with a few bright spot exceptions.
The “expansion” deals with second mortgages. The lenders prompted by the first go round had a valid point. “Why should we modify our loan, when the 2nd gets to sit back and collect their full payment, often at a higher interest rate.” This argument won favor with Washington, and now the President is doing the following: Read more
