Foreclosures and Debt

Lease Back Home In Foreclosure

Jacky — Sat, 14 Nov 2009 00:47:29 +0000

In spite of all the good intentions that the Banks and the Obama Administration had in mind when they initiated the Making Home Affordable loan modification program to stop foreclosure for home borrowers that were facing foreclosures, there were many borrowers unable to qualify for the program. Due to the inability of the “Making Home Affordable” program to help stop foreclosure for a large number of ineligible, willing applicants, foreclosures continued to spiral out of control. Many families despite their efforts to keep their homes, were unqualified for foreclosure avoidance programs offered and had to give up their American Dream of home ownership that they worked so hard for.

Not so fast! Fannie Mae have come up with another option for slowing foreclosures, “Deed for Lease™ Program”. The Deed for Lease program announced by Fannie Mae in November, is a program designed to offer up another option for borrowers facing foreclosure who do not qualify for other stop foreclosure programs like loan modifications. The way it works is that qualifying homeowners facing foreclosure may be able to stay in their homes if they sign a lease and at the same time, voluntarily transfer the deed of the property back to the lender, also called “deed in lieu of foreclosure”. The primary aim of the Deed for Lease program is to help alleviate the problems associated with foreclosure, such as uprooting families, decaying neighborhoods and other harddships caused by foreclosures. According to the Vice President of Fannie Mae, Jay Ryan, Deed for Lease is another option for troubled borrowers facing foreclosures;

The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications. This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.

A few of the general requirements to participate in the Deed for Lease program as follows,

borrowers must live in the home as their primary residence
borrower must be released from subordinate liens, i.e. second Trust Deeds etc…
documented proof that new rental rate is less than 31% of gross income

Leases can be up to 12 months, with the possibility at the end of that term, month-to-month extensions may be arranged. According to Fannie Mae, “A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer“, which means you may get a new owner of the property. A new owner, who knows, could go in a good way or a bad way, so be sure to ask as many questions about the program. For more information about the Deed For Lease program, please click here to read the announcement of the program by Fannie Mae.

Under this new program, tenants of borrowers facing foreclosure may also participate which is a drastic change from previous programs where many tenants of borrowers in foreclosure had no recourse but eviction.

For details and information on how to qualify for the Deed For Lease program and other programs, please click here to visit the Fannie Mae site.

Talking with a Foreclosure Guru

Foreclosure — Sun, 23 Aug 2009 02:22:57 +0000

Ralph Roberts is a Realtor who has written many books about the real estate market and flipping homes, such as Foreclosure Investing for Dummies. U.S. News talked with Roberts about some of the first things a potential investor should know before getting into the foreclosure market. Excerpts:

Housing Crisis Hits Small-Town America

Foreclosure — Sun, 23 Aug 2009 02:22:56 +0000

With all the talk about how the housing crisis has hit large urban areas—Los Angeles, Las Vegas, Miami—it's easy to overlook its effect on rural America. But according to the Charlotte Observer, the housing slowdown could be hurting rural communities just as much—if not more—than cities.

"The foreclosure problems in small-town America may be even more widespread than in cities. Mobile and prefab homes make up at least 15 percent of the nation's rural housing, and three-quarters of them were financed with installment or personal property loans rather than mortgage loans," the Observer reports. "When the owners default, it leads to repossession rather than foreclosure, and these defaults are not included in the foreclosure data."

Full article here.

Fannie and Freddie Go After Jingle Mailers

Foreclosure — Sun, 23 Aug 2009 02:22:56 +0000

One of the many curiosities to accompany the mortgage crisis is the growing number of struggling borrowers who have elected to simply walk away from their homes instead of launching an all-out effort to prevent foreclosure. The sharp drop in home prices—which has put millions of Americans "underwater," meaning they owe more on their mortgages than their homes are worth—is one factor behind the trend. Meanwhile, since most mortgages are packaged and sold to investors, rather than held by a local banker, it may be easier for homeowners to justify walking away and sending their house keys to the lender—so-called jingle mail.

In addition, a number of companies have emerged on the Web that present foreclosure as an attractive alternative for cash-strapped borrowers.

Loan Modification to Save Your Home

Jacky — Fri, 20 Mar 2009 00:08:27 +0000

Exploding foreclosure rates have continued in 2009 in the U.S., especially in California, Nevada, Florida and Arizona. Under the Bush Administration there were programs initiated to help homeowners facing foreclosures starting in 2007, such as FHA Secure, Project Hope and others that did not appear to produce much fruit. Foreclosures continue to spiral out-of-control up until this day.

Now, President Obama and his Administration has rolled out what is sure to be a few of many programs to address the run away foreclosure rates and help about 9 million homeowners save and keep their homes. One such program launched this month is the “Making Home Affordable” Program. The “Making Home Affordable” program, is a two-prong approach for the foreclosure crisis that involves loan modification and refinancing programs for struggling homeowners. The loan modification approach is designed to bring lenders and borrowers together to modify the terms of their loan by lowering interest rates to as low as 2 percent for five years. After the five years, rates will rise to about five percent until the loan is repaid. For eligible borrowers, they will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify for the loan modification program, which runs through 2012. Making Home Affordable modification program guidelines are as follows;

The home must be an owner occupied, single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law).

The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill).

The home may not be investor-owned.

The home may not be vacant or condemned.

Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.

Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.

First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than:

1 Unit: $729,750

2 Units: $934,200

3 Units: $1,129,250

4 Units: $1,403,400

Borrowers are only allowed to have their loans modified once, and the program only applies to loans made on Jan. 1, 2009, or earlier. There wil be a temporary suspension of the foreclosure proces according to the Modification program guidelines;

Any foreclosure action will be temporarily suspended during the trial period, or while borrowers are considered for alternative foreclosure prevention options. In the event that the Home Affordable Modification or alternative foreclosure prevention options fail, the foreclosure action may be resumed.

To read the entire modification program guidelines click here. Not all borrowers will be eligible. To read about the borrowers requirements as well as the lenders and servicers requirements to use the Modification Program, please click here to be well informed as to how you can save your home foreclosure.

A Look At Life After Eviction

Jacky — Tue, 17 Mar 2009 19:16:45 +0000

Dateline’s Chris Hansen checks up on a family that was evicted from their Las Vegas Home a year ago. Look at the video and see how they are doing after the foreclosure process.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Lower Mortgage Rates Wonâ€™t Stem Foreclosures

Free Financial Book by Suze and Oprah

Jacky — Sat, 10 Jan 2009 20:38:41 +0000

Best selling author of personal financial management advice, Suze Orman has teamed up with Media Queen, Oprah Winfrey to bring you a free ebook download called “Suze Orman’s 2009 Action Plan”!

Suze Orman

“Suze Orman’s 2009 Action Plan” book offers straight talking advice about various financial scenarios that may be the answer to some of your more pressing questions about your money in this financial hurricane of foreclosures, bankruptcy, loan defaults, and debt overload! Oprah Winfrey is giving away Suze’s book as a electronic download or ebook , on the Oprah.com website.

Once you click on the link above you will see two download links to Suze Orman’s 2009 Action Plan in English and one in Spanish. To download the ebook, right click on your preferred language and save to file to computer. I tried to simply click on the link, but the ebook did not open in my Firefox browser.

Once you have saved the file to your computer, you will need Adobe Acrobat Reader to open and read the ebook, get Adobe Acrobat Reader here if you do not have it already installed on your computer.Â When you open the ebook, you may want to reduce the size of the print by using the down button next to the size indicator, my default size is 221%. See image below.

reduce pdf size

Hurry and do not wait to get this free book Suze Orman’s 2009 Action Plan, according to the Oprah Winfrey website, there will be a cut off of download on Thursday, January 15, 2009! Get the Suze Orman’s 2009 Action Plan Now, and jumpstart your credit and credit rebuilding for 2009!

Loan Modification to Save Your Home

Foreclosures and Evictions Stop by Fannie and Freddie

Jacky — Fri, 21 Nov 2008 00:51:45 +0000

Religious leaders and community activists and others gathered in Washington D.C. to meet with Federal officials, Congress and members of the Barack Obama transition team for a solution, such as more loan modifications and the like, to slow down the ever-growing foreclosure crisis that is affecting millions of homeowners. The religious leaders and prayerful were also there in Washington, D.C. to pray for some relief to homeowners facing foreclosure and eviction. Their prayers may have been answered, somewhat.

Fannie Mae and Freddie Mac, two of the largest home loan lenders in the U.S.,Â have agreed to stop foreclosure and evictions for about six weeks beginning Nov 26, 2008 through January 9, 2009, just in time for the holidays. The suspension of foreclosures and evictions during this time period is designed to allow time for loan servicers to put in a place an efficient loan modification program to assist struggling homeowners.

According to Fannie Chief Executive Officer Herb Allison,

we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent foreclosure have an opportunity to stay in their homes.

Fannie and Freddie who holds over $5.2 trillion of the $12 trillion U.S. home mortgage market, have partnered with HOPE NOW, a coalition put together by the government, consisting of the largest U.S. mortgage servicing companies. HOPE Now offers homeowners who are at least 90 days delinquent and have high loan-to-income ratios the chance to modify mortgage terms in order to reduce their monthly mortgage payments.

Fannie and Freddie’s basic plan is to reduce interest rates for up to five years and lengthen repayment terms to as much as 40 years to trim monthly payments to roughly 38 percent of a homeownerâ€™s monthly pretax salary. In some cases, borrowers may qualify to temporarily reduce the principal amount of the loan, which would be due without interest if the house is sold or refinanced.

Since Fannie and Freddie are under government supervision since September 6, 2008, their efforts to help struggling homeowners may continue to expand to be able to help all homeowners having financial setbacks in this turbulent, recession economy. Since they hold a large stake of the home mortgage market, this plan may be able to help many more homeowners than plans offering help by other lenders and institutions.

Homeowners who are currently facing foreclosure and eviction whose loan is held by Fannie Mae or Freddie Mac, can breathe a little bit now, go ahead and exhale! Do not give up your attempt to save your home under any circumstances. Come back soon, as we explore steps to take during this “foreclosure time-out!”

JP Morgan Chase Stops Foreclosures for 90 Days

Jacky — Tue, 04 Nov 2008 06:56:42 +0000

In a bold move to try and slow down the foreclosure melt downs, JP Morgan Chase has put a stop to placing delinquent home loans into foreclosure for 90 days to try to help homeowners keep their homes. The Chase foreclosure plan will cease putting delinquent loans into the foreclosure process for 90 days as it puts a loan modification team together and implement their mortgage rescue plan. Their foreclosure prevention plan is intended to assist home loan borrowers at risk of foreclosure receive mortgage modifications. Loan modifications have been pretty hard to get in this mortgage crisis since many homeowners owe more on their home loans than their home is worth. A loan modification is the process by which the homeowner tries to get the terms of their loan modified to accommodate affordabilty. JP Morgan Chase plans to prevent unnecessary foreclosures with an independent review process to assist homeowners who may not need to be placed in foreclosure, and hire and train more staff for the caseload of loans.

Despite the fact that JP Morgan Chase is one of the largest banks affected by the foreclosure crisis, holding 1.5 Trillion dollars in mortgage loans, will be implement their plan on loans held by the bank which is only about 20% and the other 80% of loans are held by investors whose loans they service and are currently not figured into this plan, yet. According to Charlie Scharf, CEO of Retail Financial Services at Chase,

While Chase has helped many families already, we feel it is our responsibility to provide additional help to homeowners during these challenging times. We will work with families who want to save their homes but are struggling to make their payments.

One of the program’s first priorities, is to eliminate the negative amortization loans it services, most of which they inherited when they took over Washington Mutual Bank and EMC. This is a significant addition to its current foreclosure prevention program.

The type of loans targeted by the JP Morgan Chase plan are called “option adjustable rate mortgages” also known as option ARMs. The modifications that the bank plans to offer option ARM borrowers include affordable 30-year, fixed-rate loans, as well as a conversion for 10 years to an interest-only loan and principal deferment, in which a large portion of the debt is forgiven for a term of years or until the house is sold.

Chase’s plan is similar to that of Bank of America’s loan modification plan, in which the borrower will have to pay only about one-third of their income on a home mortgage.

Chase said it will review its entire portfolio to try to determine which of its customers are at risk and offer workouts to those borrowers before they get into trouble. It will streamline the process by using some kind of affordability standard (the bank declined to say how that will be done) to determine the best workouts it can offer customers to keep them in their homes.

Then it will contact the borrowers who will merely have to accept the offers to get more affordable mortgages.

Chase plans to meet the challenges head on by increasing staff, add 300 new counselors, for a total of 2,500 and opening 24 new regional counseling center for accessibility to their mortgage customers. Good news for those of you looking down the barrel of foreclosure with a Chase home mortgage loan, you can at least breathe a bit. Truly hope that this plan works for the many families facing foreclosure at the moment.

Blame Low Income Home Buyers

Jacky — Sun, 19 Oct 2008 23:51:34 +0000

After several weeks of billion dollar lifelines being thrown to Big Business and Wall Street, there appears to be a growing consensus that the mortgage crisis was caused by low-income home buyers.Â Many people believe that because low to moderate income home-buyers received SUBPRIME mortgage loans to buy their homes from banks and brokers who turned around and sold investments backed by those SUBPRIME loans on Wall Street, that these home-buyers are responsible for the financial crisis we are currently experiencing in the United States and around the globe. Many are pointing directly at the Community Reinvestment Act (CRA), which was created to prevent redlining and discrimination in certain geographic neighborhoods by banks and lenders.

Just to name a few of the people blaming low income homeowners for “wanting the American Dream” are as follows from the Washington Post’s Clarence Page;

Neil Cavuto of Fox News opined last month that if banks hadn’t been forced to make loans to “minorities and risky folks,” the Wall Street disaster would not have happened.

Ann Coulter blamed “affirmative action lending policies” that loaded banks up with mortgages that eventually defaulted and brought the financial system to its knees.

George Will on ABC’s “This Week” blamed “regulation, in effect, with legislation, which would criminalize as racism and discrimination if you didn’t lend to unproductive borrowers,” because “the market would not have put people into homes they could not afford.”

And there’s Rep. Michele Bachmann, a conservative Minnesota Republican, who caused a stir in Congress by quoting an Investor’s Business Daily article that accused the CRA and President Bill Clinton of forcing banks to give out loans “on the basis of race and often little else.”

It is appalling that the economic prosperity of Wall Street was designed on the backs and salaries of working people and when their house of cards crash, the working class homeowner gets the blame, while Wall Street gets the billions of tax-payer monies as a bailout. In effect, this process of predatory subprime lending started in the late 1990′s. There were many homeowners who were targeted and forced into foreclosure from their primary lenders for being slightly one month late and other inconspicuous fees appearing in their mortgage payments from the so-called “servicer” of the loan.Â Primary lenders would package their mortgages and sell them to Fannie Mae and Freddie Mac at face value, and would then set themselves up a “servicer” who collects the mortgage payments from the homeowner. This entitled banks and lenders to get paid many times for one home mortgage. Let the greed begin!

This is just the tip of the iceberg of the greed-driven world of debt and foreclosures. There is more to this story behind the financial crisis and we will bring more of it to you soon!