Foreclosures and Debt » Foreclosure News

Banks Stop Foreclosure Temporarily

Jacky — Tue, 19 Oct 2010 22:13:07 +0000

Foreclosures are on a see-saw! One week they are at an all time high and the next, they are stopped!

Of course, it would be too optimistic to think that there would be a permanent freeze on foreclosures for families that want to save their homes. No, this is not the case. In recent weeks, large banks such as Bank of America, Ally, Chase and others were made aware that systemic faulty foreclosures may have occurred in the processing of their foreclosures on home mortgages. As a result, foreclosures were halted in up to 50 states while the banks re-examined their foreclosure processes and documents.

Let’s take a look at how we got to this point where some of the largest banks in the U.S. put a stop to their own foreclosure processes.

Starting back in September, there were reports that Ally Financial, formerly GMAC Mortgage, sent a memo to it’s employees to halt evictions temporarily on homes that they foreclosed on in 23 states across America. Initially, there were denials that a freeze in foreclosures and evictions was taking place, but later employees of GMAC Mortgage acknowledged receiving an urgent memo ordering them to stop evictions and lock outs due to foreclosures on properties of homeowners with delinquent loans.

According to Bloomberg, an Ally spokesperson, James Olecki, they may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Not only did Ally halt evictions and foreclosure proceedings on delinquent mortgage loans, but also they stopped cash-for-keys as well as suspended sales of repossessed foreclosed properties.

About a week later, around September 30, 2010, Chase announces that it also is stopping foreclosures in the same 23 states for similar reasons; illegal foreclosure proceedings! Now most of the states where the foreclosures were halted are in states where foreclosure proceedings must go through and approved by the courts. Chase states that most of their mistakes were caused by “clerical errors” by employing the process of “robo-signing” of documents instead of legally and manually reviewing the documents in the foreclosure process. In order to expedite foreclosures, JP Morgan Chase like other large institutions of holders of delinquent home mortgages enlisted the services of “robo-signers”. Robo-signers were individuals who quickly signed documents to speed up the foreclosure process.

In addition to states Attorney’s Generals and other foreclosure fraud litigation, many cases could be challenged and even thrown out due to these so-called “illegal” foreclosure processes as stated in the New York Times.

The 23 states affected are as follows;

Connecticut

Florida

Hawaii

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Nebraska

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Pennsylvania

South Carolina

South Dakota

Vermont

Wisconsin

Now Bank of America first stopped foreclosure proceedings and sales in 50 states, but are on the verge of lifting it’s stay on foreclosures. More on Bank of America coming up, so check back shortly!

Citigroup and Ally Sued for False Foreclosures

Jacky — Tue, 19 Oct 2010 19:12:51 +0000

According to Bloomberg.com, Citigroup and Ally Mortgage were sued by homeowners in Kentucky for allegedly working with the Mortgage Electronic Registration System or MERS, to falsely foreclose on mortgages.

The suit, filed as a civil-racketeering class action on behalf of all Kentucky homeowners facing foreclosure, claims that through MERS the banks werre foreclosing on homes even when they don’t hold titles to the properties.

Defendants have filed foreclosures throughout the state of Kentucky and the United States of America knowing that they were not the ‘owners’ or beneficiaries of the loan they filed foreclosure upon,” the homeowners wrote in their complaint filed Sept. 28 in federal court in Louisville, Kentucky.

The banks are being accused of RICO- The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO), fraud of which Ally has denied the allegations. Read more how other cases allege MERS are “too close” to banks at Bloomberg.com!

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:

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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.

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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.

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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.

Home Foreclosure Wave Still Cresting

Jacky — Fri, 07 Mar 2008 00:25:41 +0000

There has been another shattering record number of foreclosures in the last quarter of 2007! In the last three months of 2007, home foreclosures hit an all-time high and an increase in the number of borrowers defaulting on their home mortgage loans.

Not only are the value of homes falling as a result of large home mortgage foreclosures, but also borrowers who are stuck with home mortgages that cost more than their house is worth, are simply walking away. There are still many home mortgages in the coming months that are due to “reset” or as I call it rise in mortgage payment.

The rate of failing home loans should climb through much of the year as national home values sink, said MBA chief economist Doug Duncan.

“You should expect to see, as long as house prices are declining, an increase in delinquencies and foreclosures,” he added.

Lower home values make it difficult for struggling homeowners to refinance and can create an incentive for them to simply walk away from their home and mortgage.

“We don’t expect to see the peak in delinquencies or foreclosures until mid to late 2008,” Duncan said.

Subprime mortgage borrowers were taking all of the heat for this mortgage mess, but all across the spectrum of borrowers, mortgage payments are falling behind. In the last three months of 2007, there were about 1 out of 20 delinquent payments from home loan borrowers, and about 1 out of 6 delinquent subprime borrowers.

As far as subprime mortgages go, many people think that this subprime lending business just started in the last year or so. Not true, there have been over ten years of subprime lending practices going on, but mostly targeting minorities. The mass appeal of the money that was made from over-charging home loan borrowers with subprime mortgages was to great of a payday for Wall Street and other investors. The end result of these fraudulent loan practices is what we are seeing today in the record breaking number of foreclosures. To stop foreclosure has become almost impossible. The hard working homeowner chasing the American Dream of Homeownership is catching all of the blame for this U.S. housing created by greed. Go figure!

Will Foreclosure Freeze Help You Save Your Home

Jacky — Tue, 12 Feb 2008 23:33:01 +0000

In an attempt to resolve the home mortgage foreclosure crisis, six major home loan lenders are offering to freeze foreclosures for thirty days. Project Lifeline is the latest response to ever-growing foreclosure rates by “Hope Now”, a government program formed to get a handle on the worst housing debacle in decades. Hope Now consists of a coalition of lenders, investors and non-profit groups that was created in October 2007, to work with the Bush Administration to try and get handle on the sky-rocketing rates of default filings and foreclosures.

Project Lifeline, announced today February 12, 2008, would temporarily stop foreclosure proceedings on homeowners who have fallen seriously behind in their house payments. Under this plan, legal steps of the foreclosure process that evicts seriously delinquent borrowers from their homes will be postponed for 30 days while lenders and borrowers try to work out payment options. This is supposed to allow the homeowner a little more time to try and work things out with their mortgage lender to stop foreclosure. The six lenders participating in Project Lifeline are members of the Hope Now coalition and some of the largest mortgage lenders in the U.S. The lenders currently offering Project Lifeline are Citigroup , Countrywide, Bank of America JPMorgan Chase, Washington Mutual and Wells Fargo.

Will Project Lifeline help you save your home from foreclosure? There is definitely more to the program and who will actually benefit. So come back for more on this Project Lifeline and how it will try and stop foreclosure rates and save borrowers homes.