HOUSING FINANCE AND POLICY UPDATES

HOUSING FINANCE AND POLICY UPDATES FREE Independent Foreclosure Review This policy is for borrowers who believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings. DEADLINE: Complaint forms must be submitted online or postmarked by July 31, 2012 Specified mortgage servicers were required to send mailings to potentially eligible borrowers and former homeowners on how to request a review of their case with the mandatory form. But lenders may not be able to reach borrowers who lost their homes to inform them that they may be eligible. Know anyone who has suffered financial harm due to errors or other problems in the foreclosure process? He or she may be eligible for FREE Independent Foreclosure Review. BEWARE of anyone who offers to complete the Request for Review Form for a service fee. Eligibility: The mortgage must have been in active foreclosure process between January 1, 2009, and December 31, 2010; the property securing the loan must have been the primary residence; and the mortgage must have been serviced by one of the identified mortgage servicers. For more information and to see a list of the mortgage servicers, go to: https://independentforeclosurereview.com or call 1-888-952-9105 M-F, 8 a.m.–10 p.m. ET, or Sat. 8 a.m.–5 p.m. ET. National Foreclosure Settlement The agreement will be executed over the next 3 years. In the next 3 to 6 months, a settlement administrator, Maryland Attorney General and mortgage servicers will work to identify homeowners eligible for immediate cash payments, principal reductions and refinancing. Banks include: Ally Financial/GMAC, Bank of America (plus Countrywide), CitiBank, JP Morgan Chase (plus Washington Mutual) and Wells Fargo. Those eligible will receive letters. (Loans owned by Fannie Mae or Freddie Mac are NOT involved in the settlement.) The settlement provides financial assistance for: • Individual borrowers who were victims of unfair servicing practices and were foreclosed upon between January 1, 2008 and December 31, 2011. • Homeowners needing loan modifications now, including first and second lien principal reduction. Servicers must work off an estimated $808 million in principal reduction and other forms of loan modification relief for Maryland homeowners. • Borrowers who are current in their payments, but underwater. Eligible borrowers may refinance at today’s historically low interest rates. Servicers must provide an estimated $64 million in financing relief for Maryland homeowners. • Borrowers who lost their homes to foreclosure without losing the right to sue banks. An estimated $24 million will be distributed to these Maryland borrowers. • Housing counseling and other state-level foreclosure prevention and housing programs. For more information on the Mortgage Servicing Settlement, go to: www.NationalForeclosureSettlement.com For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers. Borrowers may contact the banks directly, if additional information or verification is needed. BEWARE! Scammers are already at work trying to capitalize on the national mortgage settlement to access victim’s personal financial information—or worse, charge fees for this FREE program Maryland Attorney General’s Office Call Center: 410-576-6300 or 1-888-743-0023 Maryland HOPE Hotline: 1-877-462-7555 Capital Area Foreclosure Network (CAFN) (Statewide Referral to Spanish/Espanol Language Assistance.) 1-888-794-8830 (9:00 am to 5:00 pm, M- F) Ally//GMAC: 1-800-766-4622 Bank of America (and Countrywide): 1-877-488-7814 Citi: 1-866-272-4749 JPMorgan Chase (and Washington Mutual): 1-866-372-6901 Wells Fargo (And Wachovia) : 1-800-288-3212 News on Home Affordable Foreclosure Alternatives (HAFA) The Federal Housing Finance Agency (FHFA) has announced a new directive that requires servicers of Fannie and Freddie loans to roll out in stages, starting in June 2012: • Review and respond to borrower requests for short sales within 30 days after receipt of a short sale offer and a complete borrower request. • If the review is still under way after 30 days, give the borrower weekly status updates. • Advise the borrower of the final decision within 60 days after receipt of a short sale offer and a complete borrower request. The new timelines apply both to HAFA loans and to other short sales approved by Fannie Mae and Freddie Mac. Additional enhancements are planned by the end of 2012 addressing borrower eligibility, simplifying documentation, valuing property, payments to subordinate lien holders, and mortgage insurance. FHA Premiums for Refinance In April, FHA increased upfront and annual premiums for new loans. But many real estate professionals missed the second part of the announcement: PRICE CUTS for FHA Streamline Refinance Option for loans originated on or before 5/31/2009, effective 6/11/2012 Upfront premium, 0.01%; monthly premium 0.55%. Estimated savings of $3,000 per year for the average loan. Borrower must be current on payments, underwater mortgages are okay, “compare ratio” is not required by lenders. Go to: http://portal.hud.gov/hudportal/ HUD?src=/program_offices/housing/sfh/ buying/streamli (or contact a HUD certified housing counselor or any HUD/FHA approved lender)

How to prevent foreclosure

Contacting lender before missing payments offers advantage


By Ilyce R. Glink
Inman News
I received a call to my radio show just before the end of the year from a woman who had just received a letter from the bank that it was starting foreclosure proceedings.

Let's just say that it wasn't the year-end gift she was hoping for.

She told me how she had lost her job and used up all her savings to keep making her mortgage, home equity line of credit, and credit-card payments each month. After awhile, it was too much to manage, even after she got a new job.

What she wanted to know was where she could go to get help that would stop the foreclosure proceedings.

By the time you get a court date, it's a little late to unwind the clock. Instead, if you want to stop the bank from foreclosing on your house, the time to get help is before you've missed a single payment.

Most people know how to account for every dollar that comes in. It may not be your favorite task each month, but if money is tight and you're trying to make ends meet, you know when the budget is about to snap.

When you have a list of debts and bills, you should sort them from most important to least important. While all of the bills should be paid, the one that goes at the top of the list is the one that will cause your family the most damage if it isn't paid on time.

If I were organizing a list, it would read: mortgage payment; home equity loan/line of credit payment; utility bills; car payment(s); credit-card debt(s); and other bills.

Once you know that you won't have enough cash to go around, it's tempting to skip the biggest bill, which is typically your mortgage payment. But in some states, foreclosure is fast-tracked, which means you could find yourself receiving a foreclosure notice from your lender in as little as 60 days.

So let's back up: Once you know there isn't enough money to go around, and you know you'll be missing a payment, you need to call your lender. If you've already missed a payment, and your lender has called you, you need to pick up the phone and return the call. Talking to your lender is the best way to stop foreclosure.

Many borrowers have complained that when they call their mortgage company, no one picks up the phone. Or, they get transferred from department to department.

The truth is, if you don't talk to the lender, and it doesn't get recorded in your file, it doesn't matter how often you tried to call. When it comes to foreclosure, "trying" doesn't count.

If you're having trouble reaching your lender, call a HUD-certified housing counselor, who may be able to reach out to your lender on your behalf. The toll-free number is (800) 569-4287, or go online to www.HUD.gov/foreclosure/index.cfm.

Once you miss a payment, your lender will start sending you letters. If you want to avoid foreclosure, open the letters. These are supposed to contain information on how you can save your home.

In order to help you save your home, lenders can make changes to the terms of your loan agreement. The best time to do this is either just before or just after you miss your first payment.

Lenders can: (1) reinstate your loan (you'll catch up with everything you owe by a certain date; (2) offer forbearance (give you a few months off from making payments, while developing a plan to get you current on your loan down the line; (3) set up a repayment plan (where you agree to pay a little each month for the next six months or a year until you're caught up); or (4) modify your loan (this will change the terms so that the payments are more affordable).

All of the talk you're hearing about the government-sponsored solution to the mortgage crisis deals with loan modifications. The federal government is pushing investors who bought your loan to agree to modify the terms for the next few years. When a lender agrees to modify your loan, it could mean that the missed payments will be added to the loan amount, or that the interest rate will be changed from a variable rate to a fixed, or perhaps it will be lowered to a different interest rate. A final loan modification option is to adjust the amortization schedule, so that you have a longer loan term, but your payments each month are smaller.

For some borrowers, there's one other way to save your home: It's called a partial claim. A partial claim may be available only on certain loans and in limited circumstances. If you and your loan are eligible, you can set up an additional loan that will help you make up your missing payments.

This limited program is available to people who are several months behind in their home loan payments, and it allows them to become current on the loan. But the borrowers' circumstances must be such that they have overcome the reasons why they couldn't make their payments and can make the future payments on their loan. For more information, you can contact your current lender or get more information from HUD at http://www.hud.gov/offices/hsg/sfh/nsc/faqpc.cfm.

But don't delay in contacting your lender. The longer you wait, the tougher it will be to stop the lender from foreclosing on your property.