Legal Loan Relief
California Homeowners Can Stop Foreclosure with Loan Modifications, Forensic Loan Audits and Negotiated Mortgage Loan Modification Terms.

10 Aug 09 State of California Suggests Loan Modification Refund Policy

CA Borrowers should consider California loan modification programs that offer a refund policy if the loan modification company is not successful modifying the mortgage with your lender.  This protects against most foreclosure prevention scams.

The U.S. Federal Trade Commission and authorities in 20 states have sued dozens of individuals and loan modification companies as part of what they said on Wednesday was a crackdown on loan modification scams that have accelerated the home foreclosure crisis.  The 189 lawsuits and other court actions target the “con artists” who offer to help homeowners facing foreclosure, only to take up-front fees and perform little or no service.  “It’s an operation full of hollow promises designed to fatten the pockets of criminals and con artists,” FTC Chairman Jon Leibowitz said in announcing the move at a press conference in Los Angeles.  “These con artists see the high foreclosure rates as an opportunity to prey on people in distress,” Leibowitz said. “They promise to provide mortgage relief for troubled homeowners but after they take their money they throw them an anchor instead of a lifeline.”

United States mortgage fraud reports jumped 36% last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the U.S. Federal Bureau of Investigation said last week, calling fraud rampant and growing.  California Attorney General Jerry Brown said his office had sued 21 individuals and 14 companies accused of scamming homeowners, saying that many of the operations were based in Orange County, south of Los Angeles. Also Brown said that bogus loan modification scams had proliferated widely following the subprime meltdown and housing crash, to the point where authorities with limited resources were unable to effectively pursue all of them.  “We’re going to do everything we can to stop it, realizing that there are more of these rats that come out of their holes than we can stomp on,” Brown said. “This is one of the more egregious wrongs we see committed in society and we are going to fight it.” 

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21 Jul 09 Loan Modification 101

What do homeowners need if they are considering working with a loan modification company in an effort to reduce their mortgage payment that they are 2 months behind on?… Gathering the necessary documentation for a loan modification submission is imperative for the Lender to grant a loan workout.

Adrian Sainz wrote an article a few days ago, that I wanted to share with you. Homeowners worried about missing mortgage payments and entering foreclosure may have another option: a loan modification. Despite some signs of stability in the housing market, foreclosures remain a major obstacle to a meaningful recovery. And more borrowers in good standing are likely to miss their mortgage payments as the recession claims more jobs.  That’s why some people have gone for a loan modification — a permanent change in a mortgage that results in more affordable payments for the borrower.

Efforts to modify home loans have been easily outpaced by the number of new delinquencies, according to a Treasury Department report released in late June. In the first quarter, loan companies modified 185,156 mortgages, up 55 percent from the previous quarter, while the number of foreclosures in process increased to 844,389, up 22 percent.  Still, modification has been an option for many troubled homeowners. Lenders have been overwhelmed by calls from people seeking to modify their home loan, leading to reports of frustration and delays, according to mortgage finance giant Freddie Mac, which recently released an Internet video discussing this topic.  In the face of these delays, it’s important to start the loan modification process fully prepared. That means having the correct paperwork handy before calling or meeting with a loan servicer or housing counselor.  Here are some questions and answers about what you should have on hand.

Question: What are some basic documents to gather ahead of a loan modification meeting?

Answer: First, the servicer will want to quickly find the file in question, so have the monthly mortgage statement in hand.  Next, find the most recent statement for any homeowners’ or condominium association fees. Some borrowers have seen association fees increase in light of more home vacancies brought on by foreclosures, stressing monthly budgets — so you’ll want evidence of what you’ve been paying each month.  Also, borrowers who took out home equity lines of credit, and second or third mortgages, should have paperwork for those loans handy.  All of these documents go a long way in displaying a troubled borrower’s financial situation and determining their eligibility for a loan modification. Borrowers should also enter the process with a budget plan that includes how much they can actually afford to pay in monthly housing expenses, including insurance and taxes.

Question: Are there any documents not specifically related to the home that should be nearby during the meeting with the loan servicer?

Answer: Yes. Bring along statements showing balances and minimum monthly payments on active credit cards, car loans, student loans and other debts or obligations, Freddie Mac says.  These documents give the servicer a sense of the borrower’s monthly expenses outside of housing-related expenditures, to come up with a manageable monthly mortgage payment that will be sustainable.

Question: Is that all?

Answer: Actually, no. Freddie Mac recommends that homeowners write a statement that discusses the financial problems that are or could be leading to foreclosure.  This should be an honest account — the writer should set pride aside and give the servicer a sense of how bad the situation really is.

Loss mitigation and mortgage relief can be a complex decision for some mortgage lender, so remeber that you have the opportunity to make another 1st impression, so don’t blow it…process. In most cases, homeowners should have an attorney guide them through the loan modification process to work through any technicalities and make sure the lender is taking the correct steps.

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24 Jun 09 Foreclosure Moratorium California Loan Modifications

The State of California announced a new state law imposing a 90-day moratorium on foreclosures is in effect. Under this mortgage relief initiative, California lenders must prove that they made an effort to provide a loan modification with delinquent mortgages before they begin the foreclosure process. During that time home loan servicers can carry on with business as usual, including foreclosing on delinquent accounts. The State announced the California foreclosure moratorium would go into effect immediately, but will the major mortgage lenders fall into line with it?

California Foreclosure Moratorium Guidelines:

ü The moratorium applies to first mortgages made from 2003 through 2007.

ü The home loan must be for your principal residence.

ü The homeowner must have received a notice of default.

ü The home loan servicer does not have a California loan modification program in place.

ü Because many homeowners are upside down on their home loans

There is a concern that the 90-day negotiating period will only postpone the inevitable because so far the banks are not reducing the principal. Read the complete Article from the Loan Modification Outlet.> Loan Modification Plans and California Foreclosure Moratorium

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01 Jun 09 California Loan Modification & Mortgage Relief Law Updates

In November 2007, Gov. Arnold Schwarzenegger and several mortgage lenders announced a voluntary agreement meant to encourage loan modifications for borrowers facing foreclosure. Mortgage relief remains a top priority for legislators from the State of California.

SB 1137: Created a 30-day waiting period before lenders could file a notice of default; required lenders to maintain foreclosed properties; notification for renters in foreclosed properties.

AB/SB 7 (Second Extraordinary Session): Enacts a 90-day foreclosure moratorium, except for mortgage lenders and loan servicers that have entered into a loan modification program.

Local Lenders from Wells Fargo and Bank of America have reported a surge in FHA mortgage refinance applications and new home purchase inquiries for short sale and bank owner REO properties.

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17 Feb 09 20% Northern California Home Mortgages Underwater

A huge percentage of Northern California homeowners suddenly owe more on their home mortgage loans than their homes are actually worth.  A recent mortgage relief report indicated just how quickly and far house values have tanked in, Silicon Valley. Mortgage industry groupies call this “underwater.” That is when you owe more on the total home mortgages than the home’s current fair market value. In a recent article, mortgage financing expert, Jason Cardiff said, “The homeowners that can afford their mortgage need to look forward and avoid getting caught up in the home devaluation crisis of 2009.” Cardiff continued, “California home values will rebound in a few years once the housing market receives the measure it needs for correction.” “California is still the greatest place to live on the planet and that why West coast homeowners need to stick it out if they can afford their mortgage.”

This new housing report shows that 20% of homeowners in Silicon Valley owe an outstanding mortgage balance that is greater than their property value. According to real estate news company, during the 4th quarter of 2008, nearly 20% of homeowners in the San Jose metro area were experiencing “negative home equity.” Home values vary greatly in some Santa Clara County neighborhoods. This is the most significant decline in over a decade. Many home financing evaluators are predicting that mortgage modifications will reduce foreclosures in 2009.

When people are concerned about their income and savings disappearing, fewer will purchase homes despite low mortgage interest rates and falling prices. It is a difficult time for homeowners with these drops in values, but most real estate experts believe that home values will rebound eventually. Until then, FHA continues to extend a great opportunity for 1st-time homebuyers previously priced out of the market. Low interest rates along with lower home prices, especially foreclosure properties, are encouraging more new home buyers.

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11 Feb 09 Fed Agrees to Purchase Bad Credit Securities and Keeps Key Interest Rates Near Zero

Federal Reserve committed to buy bad credit mortgage securities and treasuries if deemed effective; Fed believes that mortgage interest rates to remain low for “some time”. The Fed is committed to mortgage relief expansion that includes the purchase of housing debt and bad mortgages.

Watch the Mortgage Relief and Financing Analysis by Richard Dekaser of National City Bank.

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18 Dec 08 Streamlined Mortgage Modification Program Eligibility Requirements

  -- Conforming conventional and jumbo mortgage loans originated on or before January 1, 2008;

  -- Borrowers who are at least three or more payments past due and are not currently in bankruptcy;

  -- Only 1-unit, owner-occupied, primary residences; 

  -- Current mark-to-market loan-to-value ratio of 90 % or more.

Mortgage service companies will be sending mortgage modification solicitation letters beginning this month to thousands of homeowners believed to be eligible for this loan workout program. It is critical that eligible borrowers seeking mortgage relief respond to these letters and reach out to their servicers to determine if they can receive streamlined loan modification assistance. Also, borrowers who don't receive a letter are encouraged to contact their servicer to see if they may be eligible for SMP help. Fannie Mae will be working with servicers to monitor and improve implementation of the program as necessary. 

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage loan market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.  - Source Fannie Mae 
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07 Nov 08 Truth in Lending Violations, Predatory Lenders and Forensic Loan Audits

The Truth In Lending Act also called TILA and the Real Estate Settlement Procedures Act, also called RESPA are frequently violated by mortgage lenders across the country. Predatory lending continues to be practiced by reckless mortgage brokers and careless lenders. These lending laws were created to protect consumers against predatory lenders; however a lot of flagrant violations continue to occur today.  Homeowners need to request a forensic loan audit from the loan modification company. The Legal Loan Relief performs a forensic audit when our mortgage relief clients first comes on board because uncovering lending violations can expedite loan work-outs, forbearance and sometimes principal reductions.

The penalties for failure to comply with the Truth In Lending Act can be substantial. Banks who violates the disclosure requirements can be sued for two times the amount of the total amount financed over the life of the loan. In the case of a home mortgage, this can be a very significant amount. In most cases, lawsuits must brought on by the consumer within 1 year of the violation, but certain courts have been known to consider predatory lending cases up to 3 years after the violation. If you are facing the prospects of foreclosure, uncovering Truth In Lending Act violations can delay and even stop the foreclosure process.This term can apply to all aspects of the mortgage industry and refers to the practice whereby a creditor put a borrower into a loan that the borrower will probably not be able to repay. Federal laws like the Truth In Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”), as well as many state laws, require that creditors disclose certain terms of loans to borrowers, and when those terms are not disclosed or are inaccurately disclosed these laws provide severe monetary penalties against these creditors.

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