I read somewhere the other day that it is estimated that it costs a community on average $20,000 for every foreclosure. This figure is made of law enforcement costs, city services & dropped home values. I found that to be a staggering number considering that 11.7% of Floridians alone are behind in mortgage payments.
In reviewing numerous loan documents and researching endlessly it is obvious that during the “glory” days predatory practices were rampant. Everyone chasing the all mighty dollar at the expense of the poor borrower just trying to have a descent home to raise their families. (We are not addressing fraud or the intentional abuses that took place. That’s another article another day).
Let’s say you are a little behind in your payments, anticipate not being able to make your payments very soon due to a hardship or you have already received a Notice of Default or a Notice of Foreclosure. What do you do?
You need to find a good attorney that has experience in RESPA & TILA, knows how to communicate with lenders and knows there way around the court system.
There are a lot of Mortgage Brokers out there attempting to fill a void of minimal loan volume by getting into the loan modification business. They are using their used car salesman techniques to sell borrowers on their abilities to negotiate with their banks. There may be some out there that are doing good work so don’t assume nor am I suggesting they are all bad. However, please do your homework. It is best, in my opinion, to utilize the services of an attorney.
With all of the research that I have done the one that I have found and interviewed that appears to be 100% on the right track with helping homeowners is Affordable Foreclosure Defense, Inc. (www.affordableforeclosuredefense.com) This is a well established attorney in the Ft. Lauderdale, FL area and is very knowledgeable on RESPA and defending foreclosure actions. I myself am utilizing their services and am very satisfied. They do offer a free consultation and I have no doubt that after speaking with them you will be as impressed as I am.
Whoever you decide to trust to negotiate on your behalf just remember to do your homework and make an informed decision. Your home is your most valuable asset.
Wednesday, February 25, 2009
Tuesday, February 24, 2009
WHO OWNS YOUR MORTGAGE NOTE?
How hard is it to find out who actually OWNS your mortgage? Almost impossible. Just try calling your servicer and asking. They don’t even know! The only way a lender can foreclose on you is if they can produce the original note that you signed when you closed your loan. Chances are, your loan has been sold so many times that no one knows who owns it or where the original note is housed.
During the lending boom, most mortgages were sold to other lenders or servicers or sliced up and sold to investors on Wall Street. This all was happening so fast to make the most profits that many of the new lenders didn’t get the proper paperwork and now, in most cases can’t show they own the note and the mortgage. Now that there are so many foreclosures, resulting from the mess that they created, they don’t have the proper paperwork to prove they have the right to foreclose.
If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s just a piece of paper to them, and one they likely either lost or destroyed.
There is a website, consumerwarningnetwork.com that has some very good information. It was mentioned on Good Morning America this morning. Check it out...
During the lending boom, most mortgages were sold to other lenders or servicers or sliced up and sold to investors on Wall Street. This all was happening so fast to make the most profits that many of the new lenders didn’t get the proper paperwork and now, in most cases can’t show they own the note and the mortgage. Now that there are so many foreclosures, resulting from the mess that they created, they don’t have the proper paperwork to prove they have the right to foreclose.
If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s just a piece of paper to them, and one they likely either lost or destroyed.
There is a website, consumerwarningnetwork.com that has some very good information. It was mentioned on Good Morning America this morning. Check it out...
Monday, February 23, 2009
What’s FHA Streamline all about?
If you already have an FHA mortgage and are looking to refinance your existing mortgage then this is for you! They are designed to lower your monthly payment; however, you are not able to receive any cash back (except for some minor adjustments at closing not to exceed $500).
The really good news is that you can obtain this FHA insured loan with NO APPRAISAL, NO ASSETS, NO INCOME verification’s required!
The Basics
• The mortgage to be refinanced must already be FHA insured
• The refinance must reduce your current principal and interest payment
• Verbal verification of employment will be performed by the lender
• Must provide verification of the mortgage payment for the most recent 12 months
(The loan must be at least 6 months old).
• The loan must be current and not have any late payments in the last 6 months.
• FHA doesn’t require a termite inspection letter
• Streamline refinances only allows a maximum of $500 cash out.
Check with your lender for specific requirements.
Note: Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.
click here to find more information on FHA Streamline.
The really good news is that you can obtain this FHA insured loan with NO APPRAISAL, NO ASSETS, NO INCOME verification’s required!
The Basics
• The mortgage to be refinanced must already be FHA insured
• The refinance must reduce your current principal and interest payment
• Verbal verification of employment will be performed by the lender
• Must provide verification of the mortgage payment for the most recent 12 months
(The loan must be at least 6 months old).
• The loan must be current and not have any late payments in the last 6 months.
• FHA doesn’t require a termite inspection letter
• Streamline refinances only allows a maximum of $500 cash out.
Check with your lender for specific requirements.
Note: Lenders may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.
click here to find more information on FHA Streamline.
Friday, February 20, 2009
HUD Secretary Calls for Accelerated Loan Modifications
According to an article by Nick Timiraos from New York:
“Housing and Urban Development Secretary Shaun Donovan said Friday that the federal government “must accelerate loan modifications” and cited a “desperate need” for industry-wide standards to govern those alterations.”
What does that mean to the homeowners facing foreclosure today?
Read the article here: click here
“Housing and Urban Development Secretary Shaun Donovan said Friday that the federal government “must accelerate loan modifications” and cited a “desperate need” for industry-wide standards to govern those alterations.”
What does that mean to the homeowners facing foreclosure today?
Read the article here: click here
Tuesday, February 17, 2009
Could Mortgage Brokers Become Extinct?
With some large banks cutting back on doing business with mortgage brokers many mortgage brokers or mortgage companies could be closing their doors.
This could be very bad news for borrowers because with fewer brokers in the marketplace things will become less competitive and more expensive for you to obtain a home loan. It won’t be as easy to shop and compare rates.
To read the entire article, please visit: http://money.cnn.com/2009/02/12/real_estate/lenders_drop_mortgage_brokers/index.htm?postversion=2009021213
This could be very bad news for borrowers because with fewer brokers in the marketplace things will become less competitive and more expensive for you to obtain a home loan. It won’t be as easy to shop and compare rates.
To read the entire article, please visit: http://money.cnn.com/2009/02/12/real_estate/lenders_drop_mortgage_brokers/index.htm?postversion=2009021213
Monday, February 16, 2009
Reverse Mortgages. Are they for you?
It is thought that since the “baby boomers” are reaching retirement that there will be a huge demand for Reverse Mortgages. The baby boomers are generally referred to the baby’s that were born between 1946 and 1964.
Let's start by saying that you should always consult with your family attorney or financial advisor before entering into a Reverse Mortgage. Your home is a valuable asset and knowing your rights and responsibilities as a borrower may help minimize any financial risks you may face.
In order to qualify for a RM (reverse mortgage) you must first own your home outright (or minimal balance), all owners must be at least 62 years of age and you must live in your home.
The loan proceeds can be paid to you in monthly advances, through a line-of-credit, a lump sum payment or a combination of all three options. The amount that you can borrower generally is based on your age, the equity in your home and the interest rate the lender is offering. Sine you still own the home you will still be responsible for the taxes, repairs and maintenance.
You are protected under the Federal Truth in Lending Act (TILA), which requires your lender to inform you about the plan’s terms and costs. Be sure that you understand them before you sign anything. Lenders must provide specific information on rates and payment terms.
Key Point to Remember
(1) Your legal obligation to pay back the loan is limited by the value of your home at the time you pay off the loan, (2) You can never owe more than the home is worth, (3) The loan proceeds are not taxable, (4) If you receive Social Security Income the advances will not affect your benefits as long as you spend them within the month you receive them.
When in doubt, check with a benefits specialist at a local agency or legal services office. Another good source of information is AARP. You can write them at:
AARP Home Equity Information Center
601 E. Street, NW
Washington, DC 20049 or visit their website at http://www.aarp.org/
Let's start by saying that you should always consult with your family attorney or financial advisor before entering into a Reverse Mortgage. Your home is a valuable asset and knowing your rights and responsibilities as a borrower may help minimize any financial risks you may face.
In order to qualify for a RM (reverse mortgage) you must first own your home outright (or minimal balance), all owners must be at least 62 years of age and you must live in your home.
The loan proceeds can be paid to you in monthly advances, through a line-of-credit, a lump sum payment or a combination of all three options. The amount that you can borrower generally is based on your age, the equity in your home and the interest rate the lender is offering. Sine you still own the home you will still be responsible for the taxes, repairs and maintenance.
You are protected under the Federal Truth in Lending Act (TILA), which requires your lender to inform you about the plan’s terms and costs. Be sure that you understand them before you sign anything. Lenders must provide specific information on rates and payment terms.
Key Point to Remember
(1) Your legal obligation to pay back the loan is limited by the value of your home at the time you pay off the loan, (2) You can never owe more than the home is worth, (3) The loan proceeds are not taxable, (4) If you receive Social Security Income the advances will not affect your benefits as long as you spend them within the month you receive them.
When in doubt, check with a benefits specialist at a local agency or legal services office. Another good source of information is AARP. You can write them at:
AARP Home Equity Information Center
601 E. Street, NW
Washington, DC 20049 or visit their website at http://www.aarp.org/
Friday, February 6, 2009
How important is your credit score when applying for a mortgage?
Your credit score will give the Lender a “snapshot” of your spending and payment history. They are trying to determine if you will make your mortgage payments by understanding how you have paid your bills in the past. The higher your credit score the lower your interest rate will be which results in a lower monthly mortgage payment.
What do the credit reporting agencies consider?
They will look at the number of accounts you have, (a/k/a trade lines) how long you have had them and if you have made your payments as required. They will also review any collections, liens or judgments.
Here are some tips:
Keep balances on credit cards no more than 30% - 50% of your limit
Don’t close unused credit cards as a short-term way to increase your score & don’t open new credit cards just to increase your available credit.
Pay your bills on time. Note: Even if you payoff a collection or close an account it doesn’t go away. Collections will continue to show on your report for seven years.
It’s always a good idea to keep an eye on the information that the credit agencies have on you by ordering a credit report at least once per year. You can obtain a free report once a year from each of the three agencies by visiting annualcreditreport.com or by calling 1-877-322-8228. The nationwide consumer reporting companies are Equifax, Experian, and TransUnion.
What do the credit reporting agencies consider?
They will look at the number of accounts you have, (a/k/a trade lines) how long you have had them and if you have made your payments as required. They will also review any collections, liens or judgments.
Here are some tips:
Keep balances on credit cards no more than 30% - 50% of your limit
Don’t close unused credit cards as a short-term way to increase your score & don’t open new credit cards just to increase your available credit.
Pay your bills on time. Note: Even if you payoff a collection or close an account it doesn’t go away. Collections will continue to show on your report for seven years.
It’s always a good idea to keep an eye on the information that the credit agencies have on you by ordering a credit report at least once per year. You can obtain a free report once a year from each of the three agencies by visiting annualcreditreport.com or by calling 1-877-322-8228. The nationwide consumer reporting companies are Equifax, Experian, and TransUnion.
Tuesday, February 3, 2009
RESPA Reform
There are some changes coming as the federal government finalizes the reform however it will most likely be close to year before we see any big changes at closing.
The Bush administration revised the Good Faith Estimate and HUD-1 forms in November. The idea is to make it easier for borrower’s to compare fees between the GFE that they are given within 3 days of applying for a loan or any re-disclosure prior to closing and the HUD-1 form they are required to sign at closing. It’s best for you to ask your title company to give you a copy of the HUD-1 at least 1 day prior to close for review so you have time to make comparisons and be sure you agree with what you are being charge. The new GFE form and the new HUD-1 form will be required as of January 1, 2010. The most significant change, as I see it, is that there are some costs that cannot be changed from what is stated on the 1003. Those costs include origination fees and transfer taxes. There are some third-party fees that can change but are limited to a maximum change of 10 percent. If it is discovered at the closing table that there are issues with the fees, the loan can still close but the discrepancies must be worked out w/I 30 days. If you would like to see the new Good Faith Estimate (GFE) form click here. For the HUD-1 click here
The Bush administration revised the Good Faith Estimate and HUD-1 forms in November. The idea is to make it easier for borrower’s to compare fees between the GFE that they are given within 3 days of applying for a loan or any re-disclosure prior to closing and the HUD-1 form they are required to sign at closing. It’s best for you to ask your title company to give you a copy of the HUD-1 at least 1 day prior to close for review so you have time to make comparisons and be sure you agree with what you are being charge. The new GFE form and the new HUD-1 form will be required as of January 1, 2010. The most significant change, as I see it, is that there are some costs that cannot be changed from what is stated on the 1003. Those costs include origination fees and transfer taxes. There are some third-party fees that can change but are limited to a maximum change of 10 percent. If it is discovered at the closing table that there are issues with the fees, the loan can still close but the discrepancies must be worked out w/I 30 days. If you would like to see the new Good Faith Estimate (GFE) form click here. For the HUD-1 click here
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