2011 has certainly been a difficult year for a lot of homeowners so here’s hoping for less families getting kicked out of their homes in 2012. Here’s hoping for more consumers get their voices heard and banks get what’s coming to them in 2012. Here’s hoping for a better 2012.
Happy New Year from all of us at Avid Law Center.
Phoenix homeowner, June Geffre, lost her husband Tom to pancreatic cancer in November 2009. Months before he died, he applied for, and was granted, a loan modification under the Home Affordable Modification Program. Geffre said a permanent modification was granted shortly after he passed away – but she’s run into all sorts of problems because her dead husband never got to sign the papers.
After paying as was instructed by the new terms on the temporary modification, a bank representative told Geffre she was paying the wrong amount and was now in default.
Federal law allows her to assume the mortgage so she can stay in her home but Bank of America, her lender, has refused to acknowledge receipt of the death certificate.
Geffre is taking this issue to court with assistance from Arizona State University’s Homeowner Advocacy Unit and other community agencies
Check out the full segment here: http://www.kpho.com/story/16203972/widow-bank-wont-honor-loan-mod-after-husband-died
California Attorney General Kamala Harris filed lawsuits against Fannie Mae and Freddie Mac on Tuesday. The lawsuits demand that the companies that own some 60 percent of the state’s mortgages respond to questions in a state investigation, according to the Huffington Post.
While an attorney representing the Federal Housing Finance Agency said state attorneys general do not have the authority to issue subpoenas against the federal conservator, Harris argues that since the mortgage companies own properties in California, they are subject to state law and demands.
Attorney General Harris is investigating Freddie Mac’s and Fannie Mae’s involvement in 12,000 foreclosed properties in California where they served as landlords. She also wants to find out what role the companies played in selling or marketing mortgage-backed securities.
The lawsuits ask the mortgage firms to respond to 51 investigative subpoenas that call on Fannie Mae and Freddie Mac to identify all the California homes on which they foreclosed. The lawsuits also ask the mortgage firms to reveal whether they have information on the decreased value of those homes due to drug dealing or prostitution, as well as explosives and weapons found on those vacant properties.
Earlier this month, a multi-agency task force was announced designed specifically to deter scam artists preying on homeowners looking for help under the Home Affordable Modification Program (HAMP).
The task force will operate under the Department of the Treasury, the new Consumer Financial Protection Bureau (CFBP) and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP.)
According to the New York Post, the latest scams tied to the Home Affordable Modification Program, were lead by mortgage servicers, which manage loans day to day. They have collected a total of $666 million from the government for participating in HAMP.
From the New York Post article:
The typical fraud works like this. A scam artist advertises online, pretending to be affiliated with the government. The scammers charge an average of $4,500 upfront, do no work, then skip out with the cash. Some borrowers are even losing their homes as a result of scammers’ advice to ignore foreclosure notices.
We at Avid Law Center think it’s vital for homeowners to know how these scams work and make sure they do their research when hiring assistance with the loan modification process.
While there are many reasons homeowners and tenants are evicted from their place of residence, this post will primarily provide insight on what to do if you’re served with an eviction notice after foreclosure. The eviction process is multi-fold. After the foreclosure is complete, the eviction process begins.
Given all the news about the latest Occupy Our Homes movement, we thought homeowners would be interested in knowing what their options were in this situation.
The first thing to know is that foreclosure victims cannot unceremoniously be removed from the house without being notified and given an opportunity to defend such an action in court.
3 Day Notice To Vacate
The 3 day notice to vacate is usually the first phase of the eviction process. This notice simply means that you are asked to vacate the property with no problems in three days, and no further action will be taken. If there has been no compliance by the tenant with the 3 day notice, then the Landlord can begin an unlawful detainer lawsuit “eviction.”
Unlawful detainer is a legal action brought by a landlord to obtain possession of the property.
We at Avid Law Center strongly recommend seeking the help of a qualified attorney who may be able to help you stay in your foreclosed home for up to six months beyond your first notice, allowing you time to find another place to live. An attorney will file answers to all legal documents filed against you to better prepare you for your trial. Another reason to seek legal council is state eviction laws vary from state to state so it’s better to have someone experienced in these issues on your side.
The Sheriff’s Order To Evict
After all the court proceedings, the last phase in the process is the Sheriffs order to evict. In most cases the sheriff will post a notice of eviction on the property, which will indicate the specific date that the locks will be changed and all property is to be removed, giving you time to make plans and leave before the Sheriff comes knocking.
What Not To Do
CNNMoney.com is reporting that 46% of homes sold in November were either short sales or repossessed homes, also known as REOs, according to a survey by Campbell/Inside Mortgage Finance.
As distressed homes sell for a lot less than homes sold by conventional sellers, the staggering numbers of short sales and REOs continues to take its toll on the average regular home sale. For example, the average price for a short sale was $209,000 in November and for a regular sale, the average was about $259,000.
With no end in sight on the current foreclosure crisis – more than 6 million borrowers are delinquent 30 or more days, according to LPS Applied Analytics and two million are already in the foreclosure process, most of which will be repossessed or sold as short sales – experts aren’t anticipating any changes in the next couple years on home prices.
Another factor dragging down home prices is the fact that when these distressed homes are being sold at such low prices, mortgage appraisers assessing a regular home’s value typically compare it to short sales and REOs in the area.
Additionally, home values are likely to shed $681 billion in 2012, according to Zillow, a slight improvement from last year.
From MSNBC’s Bottomline:
[T]he unabsorbed pool of housing supply, dragging levels of consumer confidence, high unemployment and negative equity will continue to put downward pressure on the housing market, pushing our expectation for a potential recovery into late 2012 or early 2013,” Stan Humphries, chief economist at real estate research company Zillow Inc., said in a statement.
As you’ve know doubt noticed by now, in our new ongoing Friday feature we’re hoping to highlight the real-life struggles of homeowners and their fight in keeping their homes.
As ABC World reports, one homeowner received what she believed was a loan modification just to find out that Bank of America was only allowing her to make “partial payments”. Although the bank informed this homeowner that she was approved for a loan modification, in truth, they were simply allowing them to temporarily to pay less on their mortgage – which is NOT mortgage modification.
Check out the video for more info on how this homeowner fought back and avoided foreclosure.
For many homeowners who are facing possible foreclosure a better option is often a short sale.
According to industry researcher RealityTrac, short sales are up 10 percent from the same period last year. While they are becoming increasingly popular for homeowners facing foreclosure, many homeowners still aren’t clear what a short sale is and whether it is the best solution for them.
With help from this article on Christian Science Monitor, we’ve compiled five things you need to know about short sales:
1. What is a short sale?
A short sale is when a lender agrees to take less than what they’re owed and allows homeowners to sell their property because they are facing financial hardship. Typically, if the property is underwater, that is to say if there is a mortgage balance that is greater than the market value of the home, that property may qualify for a short sale. The homeowner sells the home and the bank marks down the value of the mortgage
However, not every property qualifies as a potential short sale in a bank’s eyes. Lenders will agree to do this if it makes most financial sense for them. According to recent statistics, homes offered as short sales are bought for roughly 20 percent below their market value as opposed to 39 percent under market value for foreclosed homes. Lenders also save on costly foreclosure and maintenance procedures. While short sales are sometimes a better option for the lender, but some investor guidelines make it more profitable for the bank to foreclose.
2. How do short sales compare to foreclosures?
The biggest difference is how your credit is affected. A short sale, which is carried out similar to any other real estate transaction, does far less damage to your credit than a foreclosure. You may be eligible, under Fannie Mae Guidelines, to buy another home immediately instead of waiting the 5 to 7 years to get approved for another mortgage.
3. How do short sales compare to bankruptcy?
When faced with foreclosure, some homeowners turn to bankruptcy. In some cases, filing for bankruptcy can be less damaging to your credit profile than having a foreclosure on your record. Filing for bankruptcy will consolidate your debt and can wipe out your liabilities. It will not, however, prevent an eventual foreclosure if the bank has already started the process. A bankruptcy only delays a foreclosure.
If your home is the only debt that is creating your financial hardship, a short sale is probably your best alternative to bankruptcy. Although you can conduct a short sale while in bankruptcy, it requires strategy and a plan. It is best to consult with a knowledgeable bankruptcy attorney and short sale real estate agent before making any decisions.
4. Are you qualified for a short sale?
To qualify for a short sale, homeowners generally must show legitimate hardship. Common reasons include: death, divorce, loss of job, relocation, etc. Anytime a property is inevitably headed towards foreclosure, a borrower qualifies for a short sale. Also, you can’t be eligible for a loan modification.
The bank is going to want proof in writing that you meet all of these criteria. Getting approved for a short sale can be a long process in itself. If you should happen to find yourself meeting these requirements, find a proper real estate expert who is knowledgeable about short sales. They are different than the average transaction, and it is important that you do your own research.
5. Long Closing Time
“Short sale” is sort of a misleading name. It doesn’t refer to the time involved, but to the seller coming up short on the loan payoff. This is part of why short sales can take four to nine months to close, and sometimes even longer. The bank doesn’t just come out and tell the seller how much it would accept for the house, so while the seller and buyer negotiate a price, the seller also has to get that price approved by the bank. Approval can take a long time, and if the bank rejects the first offer, it draws the process out even more.
Lastly, a few things to beware about short sales:
Short sales often involve fewer headaches than losing your home to foreclosure but that doesn’t mean there the process isn’t frustrating. Less than a quarter of short sales actually close and the back and forth between the buyer, the seller and the bank is a big part of the problem. Many frustrated buyers end up walking away from short sales because they get fed up with the process. Even with so many foreclosures on the market, it’s still tough to complete a short sale.
When it comes to short sales, the process can be tricky. If you’re the short seller, the bank can sue you for the loan balance on the home, so it’s important to protect yourself. So-called “deficiency judgments,” in which a borrower can’t pay back a loan, are legal in most states, but not all. Talk to an experienced real estate agent or attorney to find out what the laws are in your state. In many cases, you can require that the bank waive the right to come after you for the difference as part of the short sale agreement.
Earlier this month, Attorney General Kamala D. Harris announced the arrests of three top officers of a Stockton real estate company who took thousands of dollars in up-front loan modification fees and made false promises to lower the mortgage payments of struggling Central Valley homeowners.
Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36, of Stockton, were arrested on 13 felony and two misdemeanor counts, including conspiracy, grand theft and false advertising.
“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure,” Attorney General Harris said. “The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”
Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute mortgage fraud.
Unfortunately, no one is safe in this mortgage crisis, even those who are putting their lives on the line for their country.
The Huffington Post is reporting nearly 5,000 foreclosures of homes belonging to active-duty service members are under investigation in an attempt to discover if they were carried out improperly, according to data from the Office of the Comptroller of the Currency.
Mortgage servicers have to follow special procedures when foreclosing on homes belonging to active-duty members of the armed forces and their families, under the Service Members Civil Relief Act of 2003. For instance, there are restrictions on so-called default judgments, in which homes are seized after the borrower fails to appear in court, according to the Financial Times.
In addition, New York State Attorney General Eric Schneiderman is also taking a closer look at whether lenders illegally foreclosed on the homes of active-duty members of the military, specifically to determine whether personnel from the 10th Mountain Division at Fort Drum in northern New York were affected.
Bank of America said it is reviewing 2,400 foreclosures of homes belonging to active-duty service members and Wells Fargo said it’s looking at nearly 900 cases. Citigroup is reviewing 700 foreclosures, the bank said.
We at Avid Law Center fully support these ongoing investigations to protect those who fight for our country. If you are a service member who has recently gone through foreclosure, we encourage you to find qualified legal assistance to ensure you have not wrongfully and illegally been lost your home.
