Foreclosure Tips, Facts and Fumbles

Non-Profit Agencies Help Homeowners Buy Back Their Foreclosed Homes

noreply@blogger.com (Carla Douglin) — Mon, 11 May 2009 19:56:00 +0000

See? More options are becoming available every day!

An article in The Boston Globe - "Still There, Foreclosed No Longer: Nonprofits Help Occupants Buy Back Homes" - discusses non-profit agencies who assist foreclosure victims negotiate standard mortgages to buy back their properties. Interesting!

Let's see how this picks up around the country.

Tomorrow on Foreclosure Exposure Radio: Rebuilding Your Credit

noreply@blogger.com (Carla Douglin) — Tue, 14 Apr 2009 20:02:00 +0000

So, you have either gone through foreclosure or come very close to it. If you have missed three or more payments on your mortgage, your credit has been severely affected. How do you rebuild your credit score after foreclosure, and why is it so important?

Tune into Foreclosure Exposure Radio tomorrow at 3PM Eastern/12PM Pacific to hear a step-by-step plan of action for boosting your credit score and the steps you must take to ensure it does not dip in the future. Joining me is Terrence Johnson of Blue Point Financial Alliance – this is an episode you don’t want to miss!

Tune in each Wednesday at 3PM Eastern/12PM Pacific on VoiceAmerica’s Business Channel! Missed a show? Listen to the archives at www.foreclosureexposureradio.com!

Foreclosure Scams: Foreclosure "Mediators"

noreply@blogger.com (Carla Douglin) — Mon, 13 Apr 2009 19:59:00 +0000

Foreclosure "mediation" is one of the most common scams, and this particular scam grates on my nerves more than most. This group of vultures gives the business a bad name, and the way they take advantage of the homeowner in distress is truly inexcusable.

Foreclosure Mediators make promises of negotiation and home salvage, but are really in it for the money you pay up front. The scam follows this trail:

You contact a Foreclosure Mediation service and submit an application.
They “review your file” (usually within 24-48 hours).
They inform you that, for an upfront fee, they can assist you by structuring a forbearance agreement with your lender or negotiating a smaller payment, no matter what your foreclosure situation is.
You submit paperwork and your NON-REFUNDABLE fee... and wait.

In this case, they have what they want from you – the upfront payment. If you attempt to follow up with them and actually get someone on the phone, they will tell you that the fee you paid was enough to get the ball rolling, but it’s a hard process filled with lots of red tape. They may say that your bank refused their workout proposal, and that’s the end of it. They MAY say that the process will take longer than expected, and more money is needed to finish the negotiations. Whether you pay more money or give up at this point, the money that you have paid to the company is gone.

DID YOU KNOW THAT YOU CAN NEGOTIATE A WORKOUT AGREEMENT ON YOUR OWN? It may seem complicated – even scary, because you’ll be dealing with creditors that you may have avoided up until this point – but it is not a difficult process. Patience, persistence, clarity, and The Foreclosure Workbook are all you need to face your situation head on!

Foreclosure Scams: Equity Stripping

noreply@blogger.com (Carla Douglin) — Fri, 10 Apr 2009 19:59:00 +0000

Have you ever heard of Equity Stripping? It can be done in two ways – both very scary, both leaving you, the homeowner, with little to none of the equity you’ve worked so hard to build.

The first technique involves an investor and an unlawful appraiser:

Unscrupulous appraiser creates a report stating that you house is worth more than its current value.
Investor gets you to refinance.
Cash is paid to the investor at closing.
The process is repeated.

Initially, your payments may drop, but your loan balance increases due to high fees and repeated refinancing. The equity you had built up is being paid out in cash during each closing. This scam is primarily for homeowners who have a large amount of equity in their homes.

The second technique works similar to a Leaseback:

You deed your home to an investor.
You sign a rental agreement.
The investor may offer you an option of buying the house back in the future (for a higher price than you sold it to them).
The investor pockets the rent you pay.
THE INVESTOR NEVER MAKES A PAYMENT...

... and you have no idea until you receive another threatening letter from the mortgage company asking for their money. The investor has been cashing your rent checks, and has not made a payment on your mortgage loan.

At this point, I want to mention again that, even though we use the term “vultures” and are painting some very scary scenarios, not all investors, mortgage brokers, realtors, or foreclosure consultants are deceitful. Not everyone who comes to you offering assistance is unscrupulous. It IS important, however, to be informed of the scams that are out there so you can protect your home.

Forewarned is forearmed!

Foreclosure Scams: Trust Agreements

noreply@blogger.com (Carla Douglin) — Thu, 09 Apr 2009 22:05:00 +0000

The Trust Agreement scam is similar in nature to the Escrow scenario.

What is a Trust? Wikipedia.com defines a trust as an arrangement whereby money or property is owned and managed by one person (or persons, or organizations) for the benefit of another. A trust is created by a Settlor, who entrusts some or all of his property to people of his choice (the Trustees). The trustees are the legal owners of the trust property, but they are obliged to hold the property for the benefit of one or more individuals or organizations (the Beneficiary), usually specified by the settlor.

Here’s how the scam works:

Investor offers to bring your loan current.
Investor charges $1000 (or a similar amount) to pay all legal fees for setting up a trust.
The trust is set up as “66 Lincoln Street Jones Family Trust” (assuming your name is “Jones”, and you live at 66 Lincoln Street).
The deed names the investor’s company (ABC Investments, Inc.) as the Trustee.
The deal is structured so that once the loan is repaid (plus a management fee), the trust will then deed the house back to you.

Can you see the scam working?

In this scenario, it is very easy for an investor to put you at ease and use “trust” to con you out of your home. You assume that because the trust is named for your home and family, you have a controlling interest. In truth, ABC Investments, Inc, controls the trust, and THE TRUST NOW OWNS THE HOME. You have just given your property away, but you are still obligated to pay for it. Miss a loan payment? You are evicted, and you have no legal ramification, because you no longer own the home.

Foreclosure Scams: The Equity Loan

noreply@blogger.com (Carla Douglin) — Wed, 08 Apr 2009 18:30:00 +0000

When you think of “escrow”, you think “safety” and “security”, correct?

Wikipedia.com defines escrow as a legal arrangement in which an asset (often money, but sometimes other property such as a deed of title) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract, such as payment of a purchase price. Upon that event occurring, the escrow agent will deliver the asset to the proper recipient, otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account.

In a foreclosure scam, however, a “deed in escrow loan” provides the exact opposite of safety and security.

Here’s how the scam works:

An investor offers to provide you with a loan to bring your loan current.
You sign over the deed to your home.
The deed is held in escrow (the investor will explain that this protects his investment and keeps their costs low).
You begin to make payments on the loan.

If you’re a day late with the payment, the investor will record the deed and evict you. You may not have documentation to prove that you were lent any money, but the investor CERTAINLY has a deed – signed by you – that proves you sold them your home.

If someone wants to lend you money to bring your loan current, sign a promissory note and give them weekly or monthly payments that you can afford. Any other lending scenario is probably presented by someone who does not have a license to lend money and is trying to get around state and/or federal lending practices. Are you willing to trust your most valuable asset – your home – to someone like this?

Think about that.

Foreclosure Scams: The Straw Buyer

noreply@blogger.com (Carla Douglin) — Tue, 07 Apr 2009 14:27:00 +0000

I just recently read an article about a "radio foreclosure specialist" in New York who is being charged with being involved in an $800,000 mortgage scheme involving straw buyers.

Before I get into outlining the scheme, let me take a minute to say how disgusting this is. You put yourself on the radio, give advice, people TRUST you, and you rip them off. Intentionally. That is inexcusable.

Now, back to our regularly scheduled program. What's a Straw Buyer, you ask? Read below...

The Washington Post recently did an article on Joy Jackson and Metropolitan Money Store, Corp - a company in Maryland that allegedly used "straw buyers" to "help" customers in foreclosure save their homes. Why do I put the word "help" in quotations, you ask? Because if the Washington Post is doing an article on you and your company around the foreclosure issue, 8 out of 10 times, it's not to praise your and your efforts.

Yep, it's another scam. HUNDREDS of people lost hundreds of thousands of dollars, EACH. Read the article to find out how these homeowners' hard earned equity went to fund the lavish lifestyle of the owner and her family. It's crazy!

The scam works like this:

If you have a large amount of equity in your home, a company will offer to assist you by having your house "refinanced" with SOMEONE ELSE'S CREDIT. The company will then say that you have the opportunity to buy back the house (or refinance out the straw buyer) after a certain amount of time, and you can live in the house "rent free" until your financial affairs are in order.

Of course, there are several other details that go into the arrangement, but those are the basics. What's wrong with this picture?

This basic fact: if you use someone else's credit to "refinance", their name is on the deed. That means that THEY, not YOU, own the house. That's why the term "straw BUYER" is used... it is another person who comes in and BUYS your home. It is a sophisticated form of the Leaseback scam - but there is a person (straw) between you and the company that offers a solution. That person is paid to use their credit.

How are they paid? OUT OF YOUR EQUITY.

In the case of Joy Jackson/Metropolitan Money Store, it is alleged that after a homeowner signed up under her program and was "saved", she pulled the equity out of the home by borrowing against the home, which increases the resale cost of the property. This price is often way too high for the person who is living in the property, and they cannot purchase the home back from the new owner.

Again I say... if it sounds too good to be true, investigate carefully. This is your HOME you are gambling with, and you should be as informed as possible when it comes to foreclosure scams and fraudulent practices.

Foreclosure Scams: The Leaseback

noreply@blogger.com (Carla Douglin) — Mon, 06 Apr 2009 21:57:00 +0000

A few weeks ago, I submitted a post about foreclosure scams that was a RE-post from an earlier series. Now, with the government attempting to crack down on foreclosure con-artists, I thought it might be helpful to repost the whole series! You MUST know what to look for when it comes to scams... I had a woman contact me the other day because she was approached by a "service" that would help her apply for the new Obama housing plan for $2800. She asked me if that was a good deal.

*heavy sigh*

EVERYWHERE ON THE NEW HOUSING PLAN WEBSITE... EVERYWHERE... IT STATES THAT IT IS FREE TO APPLY FOR THE PLAN AND THAT ANYONE ASKING YOU FOR A FEE FOR THEIR SERVICES IS PROBABLY A FRAUD.

Now, I am not one to use capital letters excessively, but I really need that point to be driven home. Scam artists are making money hand over fist in this panicked environment. Do not - DO NOT - be a victim!

So, here's the first scam we will review in the series: The Leaseback

Unfortunately, the Leaseback is one of the most popular of the foreclosure scams, because it fills the most common need of the homeowner in distress – the desire to stay in the home they have built.

The Leaseback is also referred to as “selling your home and renting it back” or just “a rent-back option”. The scam works like this:

You deed your home to an investor.
You sign a rental agreement.
The investor may offer you an option of buying the house back in the future (for a higher price than you sold it to them).
The investor takes over the payments – they may even bring your loan current.
The investor pockets the rent you pay.
The investor waits for you to make a mistake.

The slightest mistake, and you are evicted IMMEDIATELY. If you fail to pay your rent on time, or are one penny off the agreed-upon payment amount, you are evicted. If the lease says you cannot hang pictures on the wall, and you hang a photo of your beloved pet, Skippy, you are evicted. If the rental agreement says you need to hand-deliver the rental payment, but you decide to mail it, you are evicted. Any diversion from the lease, you are out on the street. You are legally obligated to leave.

A leaseback, while not always advantageous to the homeowner, is not illegal. There are some states (Maryland, Colorado, Illinois, and Minnesota to name four), however, who have strict regulations to how a leaseback must be structured and documented. Any violation of those regulations, and the vulture is caught!

We'll talk about those regulations in a later post. First, we'll continue reviewing the common foreclosure scams!

7 Tips for Saving Your Home from Foreclosure

noreply@blogger.com (Carla Douglin) — Tue, 31 Mar 2009 21:36:00 +0000

With recent news that foreclosures continue to rise despite lender efforts, it's time to repost the 7 tips!

1. Understand your foreclosure deadlines. All this takes is one simple step: Open your mail. You’ll find out what your deadlines are, the amount of your arrears (the amount necessary to get your payments current), what fees you are being charged for the delinquent payments, and your total payoff amount.

2. Face your finances. What is your complete financial picture? You must understand this before you communicate with any lender or third party. Know your net income, expenses, savings, and liquid cash. All this factors into the options you will have to save your home or credit.

3. Communicate with your lending partner. Only after you have assessed your financial picture and learned your deadlines should you contact your lender. It may be difficult to get to the decision maker, so be persistent. Agree to a workout only if it corresponds with your financial picture – it is worse to agree to a plan that you cannot afford than to negotiate a plan that works for you.

4. Evaluate additional options. You have more choices than you realize when facing foreclosure. This is when the discussion of bankruptcy, selling your home on the market or to an investor, or refinance should come into play – you need to explore all possible alternatives at this time.

5. Reach out for help. Professional help can only enhance your foreclosure prevention game plan. Seek advice from certified housing counselors to help you review your options and learn about available assistance.

6. Communicate with family members. Understanding that foreclosure can be embarrassing and stressful, this is not the time to hide the problem from family members who are affected by the situation. The stress of keeping it to yourself will increase the likelihood of losing your home.

7. Protect yourself against scams. If individuals offering services or wanting to purchase your property approach you, document everything. Check their personal and business backgrounds with state consumer protection offices and the Better Business Bureau. Ensure that you review offers with professionals before committing, and watch out for “too good to be true” offers and those who try to rush you through the process.

Foreclosure Commentary: Reach Out For Help and Receive Assistance

noreply@blogger.com (Carla Douglin) — Thu, 26 Mar 2009 15:46:00 +0000

Every once in a while, I want to throw in some commentary for my wonderful readers. I want you to know that I understand that foreclosure is more than just facts, figues, and a long to-do list. There is a lot of emotion that goes into this process – because no matter what the news says, no matter what Wall Street says, no matter what Congress says… this is your HOME we are talking about. Now, you will often hear me say that you need to step back from the emotions and look at your house as a property so you can make a rational, logical decision about what to do if you are facing foreclosure, but I DO understand the emotion that is automatically attached to this place where you raised your kids, started your business, began your marriage, played with your pets, had birthdays and anniversaries and tragedies… I understand that.

So, my commentary today is in respect for that emotion, and I would strongly suggest to you that you get the support you need during this turbulent time. Foreclosure is a VERY stressful process – not only mentally and emotionally, but physically as well, as our bodies take on the stress of our minds.

This morning, I was meditating… yes, I meditate! I mean, come on now… I deal with this all day every day – you gotta have SOME practice that keeps your mind free, and meditation is mine! So, I was meditating this morning and was reminded about receiving. I give a lot… my mentor says that at times, I over-give, actually. And this morning, my gift was a reminder to receive the love of those around me. As I was reminded of all the love of those who DO love me and show me that every day, I thought about you, an how good you would feel if you were reminded about the love and support that is available for you.

Every day, I talk to someone who says that my information is needed by someone they know. Think about it – right now, someone you know who knows that you are going through a hard financial time is thinking of you and thinking that you deserve a solution and some support. That is such am awesome gift – someone is thinking of your best interest. Someone wants to see you happy. Someone you know wants you to make it through this hardship and not only survive on the other side, but really thrive in your life. That is AMAZING, and I want you to take advantage of that.

Reach out to your friends, family, community, co-workers, and support system. Move through your pride and embarrassment and tell them what you need – if it’s a daily phone call to see that you’re okay, if it’s a reference to a good realtor or attorney or financial planner, if it’s a few dollars to get you through, if it’s a “distraction day” where you go and laugh at a silly movie for 2 hours to lift your spirits. Whatever you need, I want you to reach out to your group and ask for it. And then, sit back and receive. Give people the opportunity to help you. It will be such a joy to them to assist you, just because they love you. And that can be a hard lesson to learn for us “can-do, capable” folks… I am one of those, and this is something that I have to remind myself of every day. But it is especially important when you are going through the hard times…. reach out to those who WANT to help you, and receive their love.

No Justice for Foreclosure Con Artists

noreply@blogger.com (Carla Douglin) — Thu, 12 Mar 2009 05:18:00 +0000

Reprinted from a recent Associated Press article:

Cons Working Foreclosure Scams Rarely Go To Jail
By Marlon A. Walker and Kathleen Hennessy

LAS VEGAS (AP) — They call themselves loan modification consultants, negotiators or specialists. Some are legitimate, but many are simple con artists looking for desperate marks facing foreclosure amid the wreckage of the nation's housing market.

It's a good business, too, since in most states, there's not much of a chance they'll ever end up before a judge facing any time in jail.

"It's difficult for us to get prosecutors to do the investigations on misdemeanors," said North Carolina Attorney General Roy Cooper.

While some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors in places where foreclosure scams are common are civil actions designed to recover a victim's money.

Only in a few states are attorneys general offices — which tend to be a focal point of consumer protection efforts — willing and able to seek criminal charges and jail time against such con artists. While consumers might be helped financially by the civil cases, advocates say criminal prosecutions would do more to stop these scams.

"You've got to do something to get their attention," said Tom Bartholemy, president of a Better Business Bureau office in southern North Carolina. "Because what's being done — these civil actions — isn't."

The fake foreclosure fixers are operating in a target-rich environment. More than 2 million homeowners faced foreclosure proceedings last year, and the number is expected to rise this year.

That's the audience for roadside billboards around places like Las Vegas that scream "Save my property!" and radio ads that promise "expert help." Some companies comb property records and send mail designed to look like it's from the homeowner's lender: "We have reviewed your property information and determined that you may be eligible for a loan modification."

After Hugo Malara lost his job at a neon sign company and fell behind on his home loan, he called Derric Robinson, a loan modification specialist who advertises a "money back guarantee."

Malara and his fiancee Maria Sorto paid Robinson an $800 fee, but say they rarely heard from Robinson again. In fact, the bank had already sold their neat stucco bungalow when they handed Robinson the check.

"He was recommended by a friend. He said he could fix the problem," said Malara, a 48-year-old immigrant from El Salvador, who said he does not plan file a lawsuit.

Robinson said he made calls to the home's new owners on Malara's behalf. And he blamed Malara for not cooperating and said the fee was compensation for his time.

"That's how much my time was worth," he said, adding that the work was done outside his job as a loan modification specialist for a California company.

Some of those making the offers to help are former brokers, agents and appraisers who've seen their previous business evaporate. But it's difficult to gauge if even the legitimate offers to help are more effective than nonprofit credit counselors who also work with lenders at no charge.

"There are plenty of HUD-approved nonprofits who will do this work for free and that's what we recommend," said Rick Simon, a spokesman for Calabasas, Calif.-based Countrywide Financial Corp., once the nation's largest mortgage lender.

But federal loan modification programs, as well as lender-designed programs, are complicated and time consuming. The Obama administration's new housing recovery plan aims to change this by standardizing the process for modifying loans and offering lenders financial incentives. Cooperation remains voluntary on the part of lenders.

Homeowners who have gotten mixed up with scammers are flooding Better Business Bureau chapters, state attorney generals and consumer protection offices with complaints. Bartholemy said his office in Charlotte, N.C., received about 1,700 last year, while the Bureau of Consumer Protection in Nevada takes in more than 100 a month.

The response from state prosecutors so far, according to a national Associated Press survey, has largely come on the civil side of the court docket. Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.

In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage foreclosure rescues entirely.

"We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims," said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.

Officials in North Carolina say just one person has been convicted since 2004 for such a crime.

In Alabama, the attorney general's office usually reaches out to the foreclosure relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division.

"It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.

In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely.

"We set out to try to shut these companies down so they can't harm anyone else, and we try to get people's money back as much as we can," said Ben Wogsland, a spokesman for the Minnesota Attorney General.

There are some attorneys general making criminal cases. In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money laundering charges. Two defendants pleaded guilty, and the third case is pending.

In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.

Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial.
The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.

"I think the tide is turning," said John Kelleher, a deputy attorney general in Nevada. "A lot of these mortgage scams are so large scale and affect so many people, the judges are more willing to give prison time."

Associated Press writers Mary Esch in Albany, N.Y., Schuyler Dixon in Dallas, Ben Greene in Baltimore, Dave Dishneau in Hagerstown, Md., Catherine Tsai in Denver, and Kathleen E. Miller in Annapolis, Md. contributed to this report.

Foreclosures Hit New High

noreply@blogger.com (Carla Douglin) — Wed, 11 Mar 2009 14:53:00 +0000

Dammit... I hate to say "I told you so". I really do.

MarketWatch announced today that the number of completed U.S. foreclosures in February was 121,756, the highest monthly total since the crisis began, according to data from Foreclosures.com. The figure was a 67% increase from the 72,694 reported in January and was also well above the previous monthly high of 104,243 set last September. The number of pre-foreclosure filings also set a new monthly record, rising 24% to 207,703 in February from 166,860 in January.

Now... WHY DID THIS HAPPEN? Why are we seeing a spike now?

One word, good people... moratoriums.

The spike occurred because the foreclosure moratoriums enacted in late 2008 ended, and we have a sudden rise in foreclosure numbers. Mind you, the Fannie/Freddie/Major Bank moratoriums on foreclosures have not ended yet - if they had, we would see a GREATER spike than what was reported.

Folks, we have GOT to get a handle on this! More shortly...

Over 9200 FHA Loans in Default After No or Only One Payment

noreply@blogger.com (Carla Douglin) — Tue, 10 Mar 2009 15:19:00 +0000

There is something severely wrong with this picture, and I cannot wrap my mind around a solution. I am not usually one to spread panic... it's not in my nature. However, it may take me few days to work through a way to solve (or at least give my two cents) this latest report.

Sunday, the Washington Post's story, "The Next Hit: Quick Defaults: More FHA-Backed Mortgages Go Bad Without a Single Payment" told a grim story about the failure of the Federal Housing Authority's mortgage system.

"... the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency's historic role in backing mortgages is more crucial now than at any time since its founding.

With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency's overall growth in new loans, according to a Washington Post analysis of federal data.

Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.

If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.

The spike in quick defaults follows the pattern that preceded the collapse of the subprime market as some of the same flawed lending practices that contributed to the mortgage crisis are now eroding one of the main federal agencies charged with addressing it. During the subprime lending boom, many mortgage brokers and small lenders milked the market for commissions and fees by making as many loans as possible with little regard for whether they could be repaid.

Once again, thousands of borrowers are getting loans they do not stand a chance of repaying. Only now, unlike in the subprime meltdown, Congress would have to bail out the lenders if the FHA cannot make good on guarantees from its existing reserves. And those once-robust reserves are showing signs of stress, raising the possibility that taxpayers may have to pick up the tab for the first time since the agency was established in 1934.

More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no or only one payment, according to the Post analysis. The pace of these instant defaults has tripled in one year. By last fall, more than two dozen FHA home loans on average were defaulting this way every day, seven days a week."

That is one of the scariest things I have read in years.

The article goes on to talk about how there is an instant presumption of fraud of loans immediately go into default, but, due to the rise in FHA mortgages, the agency is unable to pursue predatory lenders with haste, if at all. Meanwhile, these lenders or brokers are targeting homeowners with direct mail and phone solicitation, enticing them to refinance over and over again with advertised low rates. The constant refinancing means that a homeowner can take cash out without having to make a payment on the loan.

"The broker makes money on every transaction," said Carr, a former executive at mortgage financier Freddie Mac. "They're not going to turn away an application if they can get it through. There have been situations where people refinance and refinance to avoid making payments and the broker just keeps getting the fees. What do they care?"

This whole thing makes my head hurt.

Updates on Homeowner Affordability and Stability Plan: Do You Qualify?

noreply@blogger.com (Carla Douglin) — Mon, 09 Mar 2009 10:14:00 +0000

Last week, the details for the Homeowner Affordability and Stability Plan were released to the public. Again, the criteria for qualification are as follows -

For homeowners who are CURRENT on their payments, but the value of the house is less than the mortgage:

Your home must be your primary residence.
You have a Fannie Mae or Freddie Mac loan. If you don’t know, contact 1-800-7FANNIE (www.fanniemae.com/homeaffordable) or 1-800-FREDDIE (www.freddiemac.com/avoidforeclosure).
You current on your mortgage payments (“Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months).
You believe that the amount you owe on your first mortgage is about the same or less than the current value of your house.

For homeowners who are AT RISK of foreclosure:

Your home must be your primary residence.
The amount you owe on your first mortgage equal to or less than $729,750.
You having trouble paying your mortgage. For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills).
You have a Fannie Mae or Freddie Mac loan. If you don’t know, contact 1-800-7FANNIE (www.fanniemae.com/homeaffordable) or 1-800-FREDDIE (www.freddiemac.com/avoidforeclosure).
You received your current mortgage before January 1, 2009.

If you fall within the criteria above, you need to contact your mortgage servicer and ask to be considered for a Home Affordable Refinance (for CURRENT homeowners) or Home Affordable Modification (for AT RISK borrowers). Make sure you have gathered the following materials:

1. Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.

2. Your most recent income tax return.

3. Information about your assets.

4. Information about any second mortgage on the house.

5. Account balances and minimum monthly payments due on all of your credit cards.

6. Account balances and monthly payments on all your other debts such as student loans and car loans.

7. If you are behind on your payments, a letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).

Please be patient! Servicers received the detailed program requirements on March 4, 2009 and it may take some time before they are fully operational. However, Treasury has encouraged servicers to immediately assist delinquent borrowers at the greatest risk of foreclosure.

Information provided by www.financialstability.gov.

Jon Stewart: CNBC's Rick Santelli, Angry at "Loser Homeowners"

noreply@blogger.com (Carla Douglin) — Sat, 07 Mar 2009 16:56:00 +0000

This is a clip from Comedy Central's The Daily Show with Jon Stewart. BRILLIANT, in my opinion...

I believe that Rick Santelli's comments were not only short-sided but irresponsible. He should be tarred, feathered, and dragged through the streets of Ft. Lauderdale, FL, where those "loser homeowners" are being turned out of their homes by the day.

Amazing how irresponsible the media can be. Take a look at the clip - Jon Stewart nails it on the head!

The Daily Show With Jon StewartM - Th 11p / 10c

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Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Wow. People Are Really, Really Angry...

noreply@blogger.com (Carla Douglin) — Tue, 03 Mar 2009 18:16:00 +0000

In my regular due diligence searches for foreclosure information around the net, I am seeing some truly disturbing trends.

People are angry. Really, REALLY angry.

This morning, Citigroup announced a program that would offer some assistance to mortgage holders who have lost their jobs. The comments on the story were negative, to say the least. One poster said, "Another entitlement program probably pushed by Barney Frank and Company for bailout money. Help the poor first... never mind those who can play by the rules." Another poster left this message: "...this is going to drive more poeple to just say screw it and not pay at all, why should I pay when the deadbeat down the street is getting everything subsidized by the governement and lives better then me...All incentive to work hard to get ahead is gone....It's not that different then when I go to the grocery store and use coupons and buy whats on sale and basicly do without to save some money, meanwhile there some deadbeat on welfare with a cart full of steaks and shrimp typicly overwieght paying with foodstamps..."

I don't spell check, folks. I just cut and paste.

This is a SMALL sampling of the postings I see around the net. When the news hit that Rick Santelli, CNBC correspondent, went "crazy" about Obama's housing plan and called the recipients "losers", a rallying cry went up to congratulate him on his tyrade.

What is wrong with people?

First point: this is why I don't watch the news. The negativity that is spread by the media seeps into people's souls. It's like the movie 28 Days Later - the rage is contagious. People are feeling the economic downturn, and now it's time to lash out at everyone and everything. Sure, people have opinions about what's right, what's wrong, and what's going to work or not, but do you have to be so nasty about it?

Second point: understanding that these new plans that are being put out are just that... NEW... let's all take a moment to BREATHE and let these things work! Let's see who they help. Let's see how they take affect. Let's see if they make the situation better. Let's give it a CHANCE before pouncing like rabid dogs on a piece of flesh.

Third point: stop being so damn angry. You'll live longer. Every person... EVERY PERSON in America is feeling the pinch. Every person... EVERY PERSON in America should so what they can to help. Otherwise, every person... EVERY PERSON in America will be affected even more than they are now. I'm not participating in the blame game. Everyone had a hand in this, and it's going to take every person to get us out of the mess.

Think of it like this... you're on a football team. You know it's going to take every person on the team to pull off the win. What kind of team player are you if you're constantly bitching about the quarterback, the offensive lineman, the wide receiver? What does that do for TEAM MORALE? I mean, wouldn't it serve your TEAM the best if you put your head down and fought for the team with all your might, supporting and encouraging the rest of the team as you went along?

I mean, really. Come on people. Let's show a little spirit. Sounds hokey, but I think we could use a little positive action right now.

Foreclosure Scams Up: Advice Worth Reposting

noreply@blogger.com (Carla Douglin) — Fri, 27 Feb 2009 17:54:00 +0000

ABC News has just posted a new story about the rise in foreclosure scams. Because of the tanking housing market and rise in unemployment, more homeowners are being targeted by and falling victim to foreclosure scam artists, and are losing their homes at an alarming rate.

I had published a series of blogs a few months ago about some common scams and how to protect yourself from them. This week on Foreclosure Exposure Radio, we will go over scams in detail for the entire hour, but in the meantime, I am reposting the following entry:

As soon as news of your foreclosure is made public, the flood of letters and phone calls begin, and the vultures are on the hunt. Some of them are less polished with their approach: you may receive a sloppy letter offering to help out by buying your home. Others may call you on the phone (ignoring the “Do Not Call List” rules and regulations) or even knock on the door and offer their services. These are the amateurs – probably fresh out of a beginning real estate investor class. They can be safely disregarded.

The dangerous ones are the Vultures in Sheep’s Clothing.

These are the slick, polished “professionals” who offer to assist you. They will hand you a savvy business card, listen intently and console you over a cup of coffee or glass of water at your kitchen table, all the while assuring you that they’ll stop your foreclosure regardless of your situation. Heck, they’ll even promise to let you stay in your home! All you have to do is sign on the dotted line...

Does that sound familiar? Unfortunately, this promise, in some instances, is too good to be true. Don’t ignore your inner sense of protection – if it sounds too good to be true, it could be a scam designed to steal your equity.

While some of the solutions presented are valid options in certain instances, some investors have no intention of letting you stay in the property – at least, not for very long. Read the contracts they present – they are heavily weighed in their favor, and the slightest infraction on your part will let them evict you and walk away with your property and your equity (especially in landlord-friendly states!).

Carefully investigate all offers presented to you. Solutions that sound too simple or too good to be true usually are.

If you're selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial situation. Financially or emotionally distressed homeowners often become the unwitting victims of unethical practitioners who seek to exploit the misfortune of others.

There are several precautions you can take to avoid being taken advantage of:

• Don't sign any papers you don't fully understand.

• Make sure you get all "promises" in writing.

• Beware of any loan assumption where you are not formally released from liability for your mortgage debt.

• Check with a lawyer or your mortgage company before entering into any deal involving your home.

• If you are selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit for this type of information.

Again, read any contracts presented to you. An upstanding investor should not have a problem allowing you take a day or two to review the documentation with a professional. If they are pushing you to sign right now, it could be a scam.

Flack and Feedback on Obama's New Housing Plan

noreply@blogger.com (Carla Douglin) — Thu, 26 Feb 2009 17:22:00 +0000

Last week, I was being interviewed on the Leslie Marshall Show (great woman, by the way!), specifically discussing the new Homeowner Affordability and Stability Plan. The objective, of course, was to provide listeners with information about the meat of the plan, requirements, who does and does not qualify, etc. I ended up in an all out verbal fight with a caller from Buffalo who was IRATE over the proposed plan, and wouldn't even let me - or the host! - get a word in edgewise.

The new plan is drawing some heat, to say the least. On another show this week, The Daily Drum on WHUR in Washington, DC, I was being interviewed (by my good friend, Harold Fisher), and a caller from Maryland called in to say that he thought the plan was a bad idea. He said he had been responsible with his mortgage... why should he have to pay for someone who wasn't?

Let me clarify some very important points:

1. The Homeowner Affordability and Stability Plan is designed to assist BOTH homeowners who are behind on their payments as well as those who have been responsible, but cannot refinance because they have seen the value of their house plummet in this current market.

2. The new plan does NOT reward speculators - investment properties are not eligible under this plan, and neither are mortgages that are not classified Fannie/Freddie-backed mortgages (a lot of the "no documentation/no money down/no income verification loans do not fall under this category).

3. There are a MULTITUDE of reasons that people fall into foreclosure. For someone to lump everyone who is losing their property into the "deadbeat" category is short-sided and irresponsible. People experience a wide variety of hardships - death, divorce, job loss, incarceration, medical issues to name a few. These factors and more can lead to major financial upheaval. There are those who have been irresponsible, yes, but it's not everyone's story.

This plan helps communities in ways that are fundamental to our survival through this crisis - it keeps people in their homes. Now, why should homeowners who currently feel slighted care about that? Because think of how slighted you will feel when the person who lives next to you abandons their home because they don't see any other option, and a meth lab moves in to the vacant property. A prostitution ring set up shop there. A group of squatters see that property as their new abode. YOUR property taxes increase because there is no one to pay the property taxes on the abandoned house and the county feels the need to spread the cost throughout the neighborhood.

Think of how upset you'll feel then.

Wells Fargo Joins the National Urban League to Offer Foreclosure Relief Through Education

noreply@blogger.com (Carla Douglin) — Wed, 25 Feb 2009 16:03:00 +0000

Wells Fargo Joins the National Urban League to Offer Foreclosure Relief Through Education: Timely Resource from Foreclosure Expert Places Power in the Hands of Homeowners Across the Nation

In a joint press conference being held at the 10th Annual State of the Black Union, Wells Fargo and the National Urban League will announce their partnership to publish a new edition of The Foreclosure Workbook written by national foreclosure expert Carla Douglin. On the heels of the enactment of President Obama’s foreclosure rescue plan, Wells Fargo and the National Urban League are providing this timely workbook to answer the President’s call for responsibility on behalf of the organizations standing at the forefront of homeowner relief.

The Foreclosure Workbook provides a step-by-step process to guide homeowners through the hurdles of foreclosure and presents critical information about state procedures, foreclosure legislation and how to avoid scams. Author of The Foreclosure Workbook—Carla Douglin—is regarded for her counsel enabling homeowners to navigate the foreclosure process through her company the Douglin Group, in addition to her books, radio show (Foreclosure Exposure Radio) and speaking engagements.

Speakers slated to appear at the press conference include Tavis Smiley andThe Smiley Group and Cara Heiden, Wells Fargo Home Mortgage Co-President.

Wells Fargo hopes to reach one of the groups hardest hit by the mortgage crisis at the State of the Black Union. As part of its Leading The Way Home Initiative, Wells Fargo is aligning with the National Urban League, which has made significant strides in driving homeowner education and counseling services to African American communities.

Swarm in Ft. Lauderdale Gets Rowdy... is Government Underestimating the Housing Crisis?

noreply@blogger.com (Carla Douglin) — Mon, 23 Feb 2009 18:42:00 +0000

As I was picking up a bottle of water and a Fast Company magazine at the San Francisco airport this morning, I hear the news streaming the story about the housing "riot" in Ft. Lauderdale over the weekend. I couldn't pay fast enough... I wanted to find out more about the story!

According to the Sun Sentinel, approximately 4500 people showed up at the Housing Authority of Ft. Lauderdale when they announced that new Section 8 housing had become available. However, the agency completely underestimated the demand and only had 3000 applications ready. The application process shut down early and the police were called when the crowd "grew unruly".

Points to remember: 4500 people showed up BEFORE EIGHT IN THE MORNING to receive assistance. In actuality, people were lining up on Friday night in front of the building - the police had to cordon off the street and set up barricades due to the high demand. The Housing Authority had 3000 applications. They are quoted as saying that "it was a much larger crowd than anticipated...." and are unsure of how many applications actually got distributed. So... what happens now?

People got angry, to say the least. Ft. Lauderdale has been one of the cities that has been the hardest hit by the housing crisis (8th highest foreclosure rate in Florida - one out of every 182 homes in some state of foreclosure, according to RealtyTrac), and many of the people that are applying for assistance have been displaced by foreclosure. The Housing Authority distributed flyers and ran ads promoting this assistance, and then shut it down when they received a deluge of response. What is their plan of action to attend to the obvious need?

The need is great, and even that feels like a massive understatement. Based on this one example, is it possible that the government agencies - federal, state, and local alike - are underestimating the housing crisis, and the affect on all aspects of American homeownership?

5 Facts About the Obama Homeowner Stimulus Plan

noreply@blogger.com (Carla Douglin) — Fri, 20 Feb 2009 14:59:00 +0000

From US News. com: A rundown of the Homeowner Affordability and Stability Plan announced this week (posted February 19, 2009)

1. Aims to allow 4 million to 5 million homeowners to refinance mortgages

2. Establishes $75 billion fund to reduce homeowners' monthly mortgage payments

3. Sets $6,000 estimate for highest average resulting increase in housing value

4. Provides $1.5 billion in assistance for renters displaced by foreclosure

5. Gives Fannie Mae and Freddie Mac a $50 billion increase in allowable mortgage-backed securities

The plan goes into effect on March 4th. More shortly!

Single Mother of 14 Faces Foreclosure

noreply@blogger.com (Carla Douglin) — Thu, 19 Feb 2009 15:28:00 +0000

Okay...

This morning, I am on a radio interview for a Richmond, VA morning talk show. Now, I have been on the show before, and the host and I always have really good banter about foreclosure issues. He asked me on this morning to talk about President Obama's new foreclosure prevention plan, and I go in thinking I'm going to be giving details about the benefits of the Homeowner Affordability and Stability Plan and an outline of the requirements.

But, no.

He starts by asking me if people like Angela Suleman are going to benefit from the plan - "irresponsible" people who do not deserve a bailout from the government.

Now, to be honest, as much as I follow foreclosure updates, I don't follow much else in regards to news. Too negative for me. I had heard some talk in the ether about this woman who just gave birth to octuplets when she already had 6 kids at home and no income to support all of these people, but I didn't pay much attention to it.

Now, I'm paying attention.

Apparently, the home in which she planned to raise this tribe of folks is in foreclosure - about $23,000 and 10 months behind on mortgage payments. The home is owned by her mother, and Angela has been residing there before and after the pregnancy. I have no idea what their financial situation is, or what arrangement she has with her mother to assist with the mortgage payments, but...

Is she kidding? Is she TRULY serious?

When I step up to defend the American homeowner, I sometimes get this kind of behavior thrown in my face by folks who see the homeowner as the base of the problem. Now, I'm not going to step DOWN from defending and supporting people who truly were misled and got in over their heads, but this is ridiculous. I'm too baffled to even be angry... and it truly isn't my job to judge. But I am trying to understand what, to me, looks like the textbook definition of irresponsibility - you have six children. Six YOUNG children. Instead of paying the mortgage on the place you are staying, you spend who knows how much money on fertility treatments, have EIGHT MORE CHILDREN, and now have to find a way to house an support all of these people that you brought into the world.

IS SHE SERIOUS? I mean... come on.

Obama's Housing Plan: The Homeowner Affordability and Stability Plan

noreply@blogger.com (Carla Douglin) — Wed, 18 Feb 2009 17:59:00 +0000

President Obama revealed the $75M plan designed to provide assistance to homeowners in distress - both those who are currently facing foreclosure AND those who are current on their mortgage. This program is scheduled to be available beginning March 4th.

Below are some initial questions and answers about the program from the U.S. Department of Housing and Urban Development (www.hud.gov):

Borrowers Who Are Current on Their Mortgage Are Asking:

1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

3. How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

5. Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

6. What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

7. Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

9. When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.

10. What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:

1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

2. Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.

5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification
.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.

8. I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

9. How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.

10. Is my lender required to modify my loan?

No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.

11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

13. What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:

1. Information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
2. Your most recent income tax return
3. Information about any second mortgage on the house
4. Payments on each of your credit cards if you are carrying balances from month to month, and
5. Payments on other loans such as student loans and car loans.

14. My loan is scheduled for foreclosure soon. What should I do?

Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility. We support this effort.

How to Stall Foreclosure: Ask the Bank to Produce the Note!

noreply@blogger.com (Carla Douglin) — Wed, 18 Feb 2009 04:27:00 +0000

A few months ago, I wrote a post about how to stall foreclosure by asking the bank to produce the ORIGINAL mortgage note to prove the validity of their ownership. Now, the Associated Press has done a story on how homeowners across the country are using this tactic to save their homes.

See the story here: http://www.google.com/hostednews/ap/article/ALeqM5hLOuvy9fguykC2NydTDrkqqyybvQD96DHN5G0

The AP reports, "...homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess. During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed. Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage."

Some mortgage companies have electronic versions of documentation, and judges are accepting this as proof of the bank's ownership. But for those homeowners whose lenders do not have the original paperwork (which happens more than is realized), you can use this to force the bank to renegotiate your mortgage!

Read the article and see if this can work for you.

PNC Joins the Moratorium Herd - Halts Foreclosures While Obama Plan is Finalized

noreply@blogger.com (Carla Douglin) — Wed, 18 Feb 2009 03:26:00 +0000

PNC Bank announced today that they would also initiate a moratorium on foreclosures, joining the ranks of JP Morgan Chase, Bank of America, Citigroup, and others who announced their halt on foreclosures last week. PNC's moratorium is scheduled to go through March 13th as the nation awaits the announcement of the government's plan to stem the foreclosure crisis.

If you have a mortgage through PNC Bank (or National City Mortgage, which is now a part of PNC), call to see how this affects your loan.

Again, a moratorium does no one any good if action is not taken during the stay to rectify the situation, so make sure you are actively working on your household situation while the government creates and implements a plan.

More on Obama's plan when it is revealed tomorrow!