Foreclosure Prevention

I have a former co-worker of mine who just shared her story with me about her loan that was modified. I have talked to many people about loan modifications and it seems that they “know someone who knows someone” who got their principal cut or rate lowered by an amazing amount. I heard this story first hand and thought I should share it with everyone that I know. I think we all know people who are in a similar situation with an adjustable rate mortgage…

Here is her story:

• loan is with Citibank, was an interest only loan that would adjust in 2011
• stopped making payments in November 2008
• wrote a letter about her situation as soon as she stopped making payments
• sent in the paperwork they requested
• kept calling and made notes every time she called. Talked to people in Loss Mitigation Department

How the lender modified her loan (after 8 months):

• tacked on missed payments to the end of loan
• adjusted mortgage from 30 year to 40 year
• changed interest rate to 2.875 for first year, 3.875 for second year, and 4.875 for 3rd year and beyond

With this said, she did not get her principal reduced but, she is now in a payment that she can afford. She did not have to pay a loan modification company but did have to have patience and determination. She is no longer worrying about her loan adjusting. She mentioned to me that it helped that she did everything in writing instead of just calling the bank.

I hope this gives some of you hope .

On June 13th a new foreclosure rule was announced that has to do with  California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger.

The main points of this bill are:

• The law will largely press lenders to follow the Obama administration’s Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower’s monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don’t qualify for modifications.
• adds 90 days to the foreclosure process for those banks that don’t comply with loan modification efforts

In summary, here’s what started on June 15th., 2009:

• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

• If the state OKs a lender’s program, the firm is permanently exempt from the 90-day delay on foreclosures.

• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.

Consumers should be able to see a list of lenders that comply with the state’s requirements by mid-July.

For the full article from SacBee.com click here

New Foreclosure Timeline per new Civil Code:

For any questions, please contact me at . I am here as a resource for you, your family and friends. Things are changing often in this market and I want to help my clients by delivering informational news as often as possible.

Although many people out there dread “short sales” when looking for homes, please be patient because things are changing. Lenders are starting to become more cooperative  with these types of sales. A recent article in the Sacramento Bee stated the following regarding short sales:

“It’s a more cooperative solution,” said David Sunlin, senior vice president with Charlottebased Bank of America Home Loans. He said the firm is adding staff and streamlining procedures to do more short sales more quickly as an alternative to foreclosing. “It allows the borrower to leave on their own terms. It’s a more dignified exit strategy and the credit reporting is less negative afterward,” he said. “It’s a win for the lender as well. It’s going to shorten the recovery cycle, which is important to all of us.”

Many clients and prospective buyers want to know why short sales take so long to get approved…

Short sales take so long because lenders must negotiate permission from other parties, such as investors and private mortgage insurers. Most recent home loans also have so-called “seconds,” an extra loan that financed the down payment. Other short sales involve home equity loans or homeowner associations seeking restitution for unpaid dues.

From SacBee.com

For the full article click here

If you know anyone who may be in a short sale situation, please have them give me a call before they decide to let their home foreclose. We are also hearing now that by doing a short sale, rather than foreclosing, a homeowner can potentially buy another property in as little as 2 years. I am here as a resource and would like to help as many people as possible to save them from foreclosure.