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California Foreclosure Moratorium

admin — Fri, 24 Jul 2009 19:09:17 +0000

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.

Yes, the bill is definitely a ray of hope for some borrowers, but it is unlikely to stop or delay most foreclosures.

Though many lenders already have federal incentives to offer loan modifications, this new law will help delay foreclosure on some owner occupied residences, but who is watching and regulating? It seems that mortgage servicers left to their own device aren’t practicing what they preach.

According to the new law, lenders must prove that they tried to modify the delinquent loans before they can go ahead and begin foreclosing on them. If the bank does not find a resolution as to modifying the loan, the homeowner will still have 90 days until the bank can take their house. During this time, it should hopefully give homeowners a chance to figure out other options on their own.

But many people believe that the California Prevention Act will not be able to stop thousands of foreclosures from eventually happening, but it is one step towards a more systematic review of delinquent mortgages.

If you are one of thousands of homeowners facing foreclosure in California and feel like their is just no hope, please give the Fransen and Molinaro Law Firm a call at (888) 756-2652 today for a free consultation.

Slow Start to U.S. Plan for Modifying Mortgages

admin — Thu, 14 May 2009 19:55:01 +0000

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 of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans.

Obama Administration’s Housing Fix

admin — Thu, 14 May 2009 19:52:49 +0000

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

admin — Wed, 13 May 2009 18:23:37 +0000

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

admin — Fri, 08 May 2009 16:08:52 +0000

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 making,” according to company filings today with the Securities and Exchange Commission.

The first-quarter net loss widened to $23.2 billion, or $4.09 a share, pushing Fannie Mae’s net worth below zero for the second time. The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees deteriorated amid the yearlong economic recession and as the government forced the company to help struggling homeowners refinance or modify their loans.

Senate Passes Loan Modification Bill

admin — Fri, 08 May 2009 16:02:24 +0000

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 borrow from the Treasury. It also strengthens the terms of the Troubled Asset Relief Program.

The House of Representatives has already passed its version of the legislation and the Senate tried to tailor its bill, which passed 91-5, so the two could be easily reconciled. The legislation protects servicers from lawsuits filed by mortgage bond investors when they modify loans under government anti-foreclosure initiatives.

SC court halts thousands of home foreclosure sales

admin — Wed, 06 May 2009 13:56:22 +0000

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.

RealtyTrac Inc., a foreclosure listing firm, says the ruling could affect 5,000 South Carolina homes facing foreclosure.

A Short Sale May Not Mean You’re Home Free

admin — Thu, 30 Apr 2009 13:47:35 +0000

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.

In a growing number of cases, holders of mortgages or home-equity loans are requiring borrowers in short sales to sign a promissory note, which is a written promise to pay back a loan or debt. Real-estate agents and attorneys say they have seen an increase in requests for promissory notes as mortgage companies look to short sales as an alternative to foreclosure.

Bankruptcy Judge Loan Modification Plan Hits Wall in Senate

admin — Thu, 30 Apr 2009 13:43:22 +0000

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.

Despite major concessions to the banks at the expense of borrowers, Senate leaders have been unable, after weeks of negotiations, to persuade most industry players to endorse the proposal. Unless further genuflections are made to the banks, supporters of the bill appear unlikely to garner support from enough senators to defeat a mostly Republican filibuster — a vote that could occur as early as Thursday.

2nd loan modifications and the OBAMA PLAN

Nathan Fransen Esq. — Wed, 29 Apr 2009 13:42:55 +0000

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:

·         For 2nds that are principal and interest loans, the interest rate will be 1%
·         For 2nds that are interest only, the interest rate will be 2%
·         2nd lenders that extinguish their lien entirely will get 3 cents on the dollar if the borrower is more than 6 months delinquent and 4-12 cents for borrowers that are less delinquent
·         The Government will pay the servicers $500 for each loan modification and $250/yr for three years if the borrower stays current
·         The Government will pay the homeowner $250/yr for five years to pay down their first mortgage

The servicers that participate in this program must modify the loan if and when the first modifies. They expect it will take about a month to implement the program. Overall this definitely has the makings of a plan that will help homeowners, but the question is how many homeowners?