Real Estate Solutions and Discussions

from CBS SAN FRANCISCO,

Oct. 8, 2010 Inside America’s Mortgage Nightmare With Lenders Selling Loans and Breaking Rules on Paperwork,

Distressed Homeowners Wonder if the Chaos Will Ever End

By John Blackstone

(CBS)

BofA Stops Foreclosure Sales in 50 States Obama Won’t Sign Foreclosure Docs Bill (CBS) Many distressed borrowers aren’t sure who holds their mortgage. It’s a symptom of the chaos in America’s troubled mortgage system, reports CBS News correspondent John Blackstone. “I had Wilshire and they sold my loan to Bank of America,” said one woman. “They brought it from the original people that had our loan,” said another woman. “I can’t remember who that was.”

The frenzy of mortgage lending during the housing bubble has now turned into a recordkeeping nightmare, with major banks admitting they did not follow the rules for handling paperwork on hundreds of thousands of foreclosures. The problems may affect all 50 states.

CBS Moneywatch: National Foreclosure Freeze Coming?

“How can there be people like that who just do stuff without even being conscientious of what the consequences might be?” asked homeowner Cecilia Vignoli. In Florida, Vignoli learned the foreclosure documents on her home were signed by Jeffrey Stephan, a GMAC processor who admitted he signed 10,000 such papers every month, swearing he’d reviewed each one in detail when he had not. “That’s not a mix-up,” said attorney Margery Golant. “That’s intentional fraud.” Golant is trying to help Vignoli save her house. Vignoli’s foreclosure is one of those halted as at least four big banks suspending foreclosures in much of the country as they try to sort out the paperwork. “They claim that what they are trying to do is hold these borrowers to their agreement, and yet they are breaking the law,” said Golant. It used to be that the papers tracking mortgages were easy to find, filed at a county recorder’s office. But more than a decade ago big mortgage lenders set up their own alternative system. The system is called MERS, the Mortgage Electronic Registration System.

Instead of filing papers at a local courthouse, mortgage changes are simply registered inside the MERS computer. But with no official paper trail, lenders are now scrambling to produce documents to prove they have the right to foreclose. The resulting halt on many foreclosures is bringing new uncertainty to the already fragile housing market by clogging the system. “The concern is what else might they not be doing that they’re supposed to be doing?” asked Rick Sharga of RealtyTrac.com.

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Best advise  if you are being foreclosed on and want to keep your home get help NOW!!!  Get a lawyer,  try to work with your lender to reduce your payment, and get all possible help.

If  you are buying these houses then best bet is to hold off till this get sorted out.

Are Loan Modifications Working?
by Nancy Niblett

As a real estate agent I have assisted many people in trying figure out the best for their personal situation. Many have tried a loan modification which as you may have heard from news media that our government is requiring the banks to work with homeowners by following guidelines and assisting in loan modifications.

I can’t tell you how many people I have worked with but let me give you some situations that have transpired and you decide for yourself whether the system is working or not.

My first experience was a year and a half ago when a friend notified me quite late in the game that she was very behind in making her mortgage payments and the bank had taken 6 months of missed payments and supposedly working with her to modify her loan when she gets a call that they will not give her the modification.

Her next option was to short sale the home which we immediately got on the market and received a fair offer. The buyer ended up walking and 7 days before her foreclosure I get a call. I told the person on the line that the buyer had walked and we knew she needed to vacate in a week. Out of the blue the person informed me they were from a different department and she would be receiving an over night package that she needed signed, notarized and a check for the lower payment sent in and then she would be modified! That was a shocking wonderful surprise.

Well, don’t get your hopes up, that was rare and before we implemented the home owners assistance programs. Since then, I had one client apply for a modification only to get a $60 reduction which after losing his job was not going to cut it. Another case in which they were told the new amount, paid nine months of payments waiting for the final approval just to receive notification that although they had made $11,000 of new payments without being late and literally doing everything they asked that they were refusing them and they were now in default. Not only that, but they now sold the loan! What? sold the loan and cashed in on the $11,000 that they just paid and then sold it to another investor and made all their money. Wow! that was a new one.

The stories go on and on and seem to be more common place than loan modifications working. The news channels are flooded with people who have been in the middle of a loan modification, making their new payments and suddenly find out their home has been sold at auction.

By no means am I saying that you should not try but I would at the same time be watching closely and prepared to short sale quickly. Get an offer, any offer and apply for a HAFA program – that is if your loan is not backed by VA because they do not participate in this program which helps homeowners extend the foreclosure date by four months.

Be careful and award at all time what is going on with your loan, don’t give up without a fight but stay on top of the situation.

About the Author:
Nancy is a seasoned real estate agent working for buyers and sellers in the Phoenix metro area and has received many awards including Phoenix Business Journals Top 50 Individual agents for the past several years.

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The Positives and Negatives of Selling Your Home to Avoid a Foreclosure by Trevor Price, guest Author

Foreclosure is one of the most stressful, sleepless-night situations a homeowner can experience. Most who face a pending foreclosure experience a major sense of hopelessness, despair, fear, anger, failure, and a host of other emotions.

If you are among those dealing with the prospect of losing your home, understand that you do have some options to actually stop the foreclosure process from taking place. One of them is to sell your home.

The Pre-foreclosure Sale

Just like with cards, you have to know when to hold ‘em and when to fold ‘em. There may be times when it simply is not going to be possible to avoid a foreclosure and remain in your home.

With that realization comes the tough decision between financial ruin and your house. When those are your remaining choices, you may just want to consider cutting your losses and selling your home before your lending institution delivers a foreclosure notice.

When to Consider A Preforeclosure Sale

You should consider a preforeclosure sale if you cannot come to an equitable agreement with your lender. In other words, if you are not able to work out a deal with your lender to avoid foreclosure, consider putting your home up for a quick sale.

When you are down to no other feasible options, selling your home may be the best way to at least preserve your credit rating – even if the house winds up in someone else’s hands. Foreclosure and bankruptcy will leave a significant negative mark on your credit score, haunting you for years.

Preforeclosure sales serve as a last ditch effort to find a buyer for your home before this worst case scenario comes to fruition. Clearly, you don’t want to be in the position of needing to sell your home quickly, but alternatively you may have no other option.

The Downsides of a Preforeclosure Sale

No one likes being forced to sell the home sheltering them, but that is essentially what you have to do in a preforeclosure sale setting.

You also probably do not have the time to wait for market price offers to come in on your home. You are racing the clock to avoid being served a foreclosure notice, so your home will have to be priced to sell.

As a result, you cannot afford to take your time with the normal home selling process – something that can often take months in a tough housing market economy. On top of that, you will also then likely need to locate a new home right away (rental, move in with a friend or other family members) if you sell your home in a preforeclosure sale.

Facing the Emotional Stress

You also ought not sidestep the emotional turmoil involved with losing your home. Most of us develop a strong emotional attachment to where we live – the house itself, geography, neighbors, and other factors important to each.

Add that to the almost inevitable sense of failure that comes part-and-parcel with experiencing such a dire financial situation, and this problem can become overwhelming.

You don’t want to sell your home under duress, but you may have to make the difficult decision: try to keep your property, or protect yourself from a financial disaster that could possibly leave you homeless and without a dime to your name. The choice seems obvious, but is nonetheless stressful.

Sell your home on ForSaleByOwner.com and pay 0% Real Estate commissions

Trevor has been writing on a wide range of topics for several years. Not only does this author specialize in foreclosures, but you can also check out his latest stainless steel cookware sets review website which reviews Mauviel copper cookware

Ways to Hunt for Foreclosure Homes by Karin Roesner, guest author

There are many Foreclosure Homes in the market this year but you should exercise caution while hunting for the right property to buy. You need to do your home work on subtle details before you make the plunge and buy a foreclosed home. There are several facts that the buyer should know before buying Foreclosure Homes.

1. Firstly, you will face a volatile market right now. You may set your eyes on a home sitting in the market for over a month only to get embroiled in a bidding war with some one else. Just because a property has been sitting in the market for some time doesn’t rule out competition. You need to make a realistic and fair offer.

2. Get familiar with localities before you make the move. It is wise to look for what amenities you require, what type of neighborhood you are keen on and how you like to commute to work. Also consider whether you want to be close to water, a beach front property or one near local schools. There may be a difference in thousands of dollars between homes in different communities.

3. Decide on what you want and what you don’t want in your home. This is a bone of contention for many couples. The husband may want a spacious garage and the wife wants an extra bedroom. Also, Foreclosure Homes may offer you what you want but the price may not be acceptable. What you need is to make an outline of your basic requirements and work your way with various offers of properties and settle for a realistic offer.

4. It is a buyer’s market right now. The present economic conditions bode well for buyers.Foreclosure homes are still reasonably priced due to economic conditions. But according to experts the market will rebound in two years. So grab the opportunity while it is there.

5. Foreclosure Homes are certainly a good long term investment. Whether you are buying a condo or investing in a vacation home, be sure your investment will rise in value as is one of the places in the US with appreciating value.

6. If you are investing in gated communities or condos, be sure to get details on condo fees or House Owner Association Fees. You need to consider these fees while calculating the mortgage. You should enquire about the rules and regulations for property owners such as the kind of landscaping that you are allowed to do.

Finally, you need to get in touch with a qualified real estate agent to help you deal with the Foreclosure Homes market. They will be able to put together a list of properties that fit your preferences and your budget.

Foreclosure Prevention Methods
by Ann Grant guest author

If you are a distressed home owner and you believe that you may be at risk of receiving a Notice of Default, the very best strategy is to get help with foreclosure avoidance steps early enough so that you can fully consider the various options and discover the best answer for your particular needs. This is one instance where your steps must be speedy and effective. Delays or wrong moves will result in a pile up of your bills and exacerbate the situation with your mortgage and other debt.
One foreclosure avoidance option is a loan refinance. The FHA will, under the Hope for Homeowners program, insure a refinanced mortgage that is not greater than 90% of the appraised worth of your house. If you do not own any other property and your monthly mortgage payments are higher than thirty one% of your monthly gross earnings, you may qualify. Your payments will also include mortgage insurance and you have to to have the money for the closing costs. You shall be restricted from taking an additional mortgage on your property for the subsequent five years, except it is for emergency repairs. You have to also agree to split the equity in your house at the point of the mortgage in addition to any future appreciation in the value of your house.
A mortgage modification results in a reducing of the monthly mortgage payments. Your lender may agree to adjust your payments for a temporary period. This may give you time to recover from your financial situation as the loan could be lowered considerably a month and allow you to keep your home. Though loan modifications are pretty new to the market, this program has proved to be an instrument that prevents foreclosure and keeps the monthly mortgage payments affordable.
Bankruptcy is commonly a final resort but may present distressed owners with fresh start. The bankruptcy process should be dealt with by an lawyer who specializes in this field. Be careful to pick out a bankruptcy lawyer that is trustworthy and will take the time to clarify the steps of the process. You will need to arrange your documents and submit them in a timely manner.
Short sales are a viable alternative to help prevent foreclosure; nevertheless, this procedure cannot be left too near the deadline of a Notice of Default. If you opt to not keep the property, engage a real estate agent that has short sales expertise and therefore has the negotiating abilities and an excellent idea of a realistic price. Short sales do not lead to revenue for the seller; nonetheless it does provide a way out from a mountain of debt.
Evaluate your options and determine the path that is appropriate for your case.

Mortgage Home Loan Modification

A mortgage home loan modification is to help those individuals and families who are having trouble making their monthly mortgage payments. These modifications include the applicant making a proposal either by themselves or with the assistance of a third party as to having a new agreement formed with the lender. It is up to the lender whether or not the proposal or the application is accepted. They may enter into negotiations with the borrower or third party to make an agreement that all parties involved will be benefitted from. Of course these modifications are not for everyone. First, not every person is eligible, and second, not every person wished to stay in their home for the period of time that may be needed.

Financially Unstable

The individuals who can no longer afford to make their payments every month may want to consider the mortgage home loan modification. The individual does not have to let the loan go into a state of delinquency with the Federal loan modification program. The payments only have to be late in most instances but even in with this requirement, there are some exceptions if the individual or family has proof that they will be late or not able to make future payments. This proof can come from the notice of a job loss or wage cut or similar events.

Technical Requirements

There are requirements that must be met concerning the loan itself such as the principle balance that remains as well as the type of residence that the mortgage is taken out on. The residence does have to be the primary living location of the family and has to be a single family home between one and four units. The amount permitted on the principle is according to how many units the home consists of. Other requirements include that the loan must have been taken out before January 1 of 2009 amongst others. With some of the requirements, there are exceptions depending on the situation.

Living Arrangements

One factor to consider when thinking about obtaining a loan modification is how long a family intends on staying in that residence. For those individuals who aren’t sure that they want to keep the home or have the responsibility of a mortgage may not want to opt for a modification but for a short sale instead. This means that their home is sold to another buyer and the borrower is free from the mortgage and can look for another, perhaps less expensive place to live.

Family Circumstances

Many of these items depend on the family circumstances. These should be well-thought through before going ahead with a mortgage home loan modification agreement. The negotiation process can take unnecessary time if the family decides against remaining in that home. It is recommended that the individuals involved seek professional advice concerning their situation and what would be best for them. They can find free advice online if and when they want to have a discussion with a fully qualified expert without any strings attached.

Top Ways To Safely Purchase Foreclosed Homes by Joseph Smith Jr, guest author

Being enticed to acquire a foreclosed property is understandable. The promise of return on your investments is truly tempting. A 30-40% discount is a significant sum that can hardly go unnoticed. But there is no reason to be careless and hasty when it comes to deciding which property to buy. Believe it or not, there are safe ways to purchase foreclosed homes for sale.

Be Realistic In Your Expectations

When a borrower defaults, that means they have lost their financial capability to pay their outstanding debt due to some reasons that are out of their control such as sudden unemployment, a failed business or a health crisis within the family. These can lead to tight financial situations for the home owner. Expectedly, when a home owner realizes that he can no longer pay his mortgage and runs the risk of a repossession or foreclosure, he cuts back on the repairs and maintenance costs for his home. This often results to poor house conditions, poorly maintained lawns, leaks, and houses in varying stages of neglect.

Setting your expectations moderately can give you a better perspective when looking at these homes. For one, it avoids frustrations and disappointments on your part and second, it also helps you to take in all these matters in an objective manner. Since you have been aware from the beginning that houses may not come in neat packages, you are then able to prepare yourself in handling the situation more appropriately by knowing what to keep in mind when making an inspection and tour.

Research, Research, Research

Sometimes a good deal is just waiting to be found. Buried among those multiple foreclosures listings and classifieds is that one property that could strike a good deal for you. It is never enough to be satisfied with a single listing. You need to diversify your sources of information in order to get firsthand knowledge on bargain deals.

Inexperienced buyers who are interested to purchase foreclosed homes for sale must also be aware that they must first learn the foreclosures basics before they can begin to shop for a property. Digesting information on a daily basis can be an immense help in familiarizing one’s self with the industry. There are also deals that allow you to transact directly with the homeowner and this option is available for your mutual benefit. Sufficient knowledge about the terms, procedures and processes of foreclosure investing can eventually translate to smart decisions.

Always Look Forward

When you have come up with a list of foreclosed homes that you are interested in and are thinking of submitting your offers, you should ask yourself what your long-term plans are for those properties. Will they be for rentals or for personal use? It is important that you have defined and clear-cut plans when deciding to purchase foreclosed homes as this could determine the viability of your investment.

About the guest Author:
Joseph B. Smith has been educating buyers on the finer points of Purchase Foreclosed Homes at ForeclosureDeals.com

Foreclosure Traps

If you are facing foreclosure or repossession get some help before it is too late! This video is from Michigan but the information is good everywhere.

You may be able to set a refinance, apply for payment reductions, and do other things to help you out of this. You are not alone, unless you choose to be.

JPMorgan Chase Sued For Misleading Homeowners
by Carlos Montes guest author, Calgary

It has become apparent that the recent recession has made for some fabulous opportunities for some unscrupulous people and businesses to cash in on other people’s misfortune. Unfortunately, it has also been the case that while some companies have been trying to assist home owners, it’s not always easy to tell the well meaning from the deliberately devious.

In the latest news about struggling home owners dealing with their lenders comes a whole new chapter in possible misinformation and miscommunication. Recently, some Californian home owners were informed by their bank that while they were struggling to pay their mortgage, they would have to be delinquent to actually qualify for mortgage modification. So, their Chase bank representative told them to stop paying their mortgage for a time so that they could qualify. The plan worked, and the couple received a letter notifying them of their qualification for the program in June 2009; unfortunately, three weeks later they also received a letter from their bank letting them know that their bank was foreclosing on their home.

While the bank was claiming that their home was not, in fact, foreclosed on the family was having agents looking at their home under the impression that the house was an REO; public records show that the bank did actually foreclose on the property while telling the family that they had not. One can only guess at the bank’s reasoning in this case.

The unfortunate family apparently spent months trying to work out the situation with their bank before deciding to file a complaint in District Court, charging the bank with breach of contract, fraud, predatory lending, and violation of the Fair Credit Reporting Act. The couple is demanding $150,000 in damages from JPMorgan Chase in compensation.

Unfortunately for JPMorgan Chase customers, this is not the only case of predatory lending that has come to light. More customers in other locations have been coming forward to press charges against JPMorgan Chase as a result of what they claim is wrongful foreclosure. In at least one case the bank continued to claim that the home had not been foreclosed on when in fact it had been sold to a third party and the rightful home owners were evicted.

Hopefully with these cases coming to light, there will be added incentive for lenders to work truthfully with home owners so that less homes are foreclosed on and more mortgages are modified so that owners can manage their payments.

About guest author

Carlos Montes is a professional Calgary Realtor, visit Carlos Montes at CalgaryRealEstate.pro -