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Here is a question I received:

I have a home in reverse mortgage the HOA has posted a lean notice on my door for nonpayment saying they can sell my home is this possible?

Here is my answer:

Yes. Depending on how the HOA was approved and what you agreed to in the Conditions Covenants and Restrictions, you may have given them the right to foreclose and by doing so they know that the lender will begin paying the dues and at least they will have cash flow.

The idea behind this is that the neighborhood should not suffer due to a lack of revenue coming in and possibly cause greater looses due to a lack of up keep.

HOA dues need to be paid while negotiating with your lender.

Chris Miscellaneous

I wrote the following post on 8-25-10.  I will admit, today, 9-2-10, that it sounds a bit harsh.  However, my position has not changed.  The fact that good people have been foreclosed upon due to not having their impound account set up properly is just plain wrong. 

Many in the profession believe that it is the Realtors responsibility.  Realtors believe it is the banks responsibility.  Some believe it is the buyers responsibility.  Does anyone besides me see a pattern of pointing the finger?  I strongly believe lenders have a responsibility to make sure the payment is accurate.  Period.  It’s that simple.

 

Read this e-mail I received. This is crazy and it is preventable. This is pure stupidity on the originators part and the company for not educating their team on this topic.
The dream of homeownership should not be turned into a nightmare due to a consumer being connected to a loan company and their representative who cannot set up a simple impound account properly. The fact that no one checks and confirms with the County what taxes are owed or will be owed is so unfair to a consumer who is trusting the people who claim to be professional and worthy of their commission;

“My husband and I recently purchased our first home. Eight months into the loan now, our mortgage payment jumped up $400. When speaking with the “new loan company” (our loan was sold after escrow), they said that our original loan company didn’t calculate our mello roos into our impound account, so our impound account went negative and now we have a new mortgage payment. They said that with the new payment being higher and the property taxes being as high as they are, there is no way we would have qualified for our home. So here we are in our first home for under 1 year and we already cannot afford our payment. Is there anything that can be done? How is it possible that we paid title and escrow and the loan company to do a job and no one did it correctly? And the end result is that we’re possible out of a home and tons of money! Please help!”

 

The sad reality is that their is most likely nothing that anyone can do except sue the lender.  I for one will offer my services as an expert witness for free.

All of you experts out there who are students of the business and care about it as much as I, need to join forces with HELP so we can rid the industry of people who place the homebuying public into situations like this.

Chris Miscellaneous

I am writing this after doing much research on this subject.
The moral debate over whether one should be able to have borrowed money and then not be forced to pay it back is beginning to get old to this expert. Our home values have been destroyed due to greed, a lack of ethics and a cooperating Government who have accepted campaign funds and looked the other way and in some cases flat encouraged the abuse of the middle class. Sadly, the ones who have been hurt the worse have been the minorities. Minorities’ have been and are currently being targeted. (See Center for Responsible Lending)
If you believe you have been taken advantage of and you are facing foreclosure after months of attempting to cooperate in a modification, you are not alone. You have legal rights and remedies that finally appear to be moving in your favor.
I once believed that one should not be able to fight their lender over a technicality. I believed that if I borrowed money and I understood the terms I should take my lumps in the event I could no longer afford my mortgage. Today, I’m not as sure as it is becoming more and more apparent that we were manipulated into believing that if we didn’t buy a home and take the terrible terms the banks were offering through retail and broker channels, then we would never be a homeowner in the future as we would be priced out of the market. Read- http://davidlereahwatch.blogspot.com/2008/05/hes-baaaaaaaaack.html

MERS, once one begins to understand what was done to us, is at the heart of the matter. I have often opined that for many in my audiences, this financial crisis was done too them, not by them. In other words, the fact that they have suffered a financial hardship and were unable to make their mortgage payments did not cause this downturn. Not to this degree.
As an advocate for the people of America, I believe I have a responsibility to fight for the underdog. I am compelled to utilize my God given talents to teach those who are hurting that there are in fact people out there who not only care about them, but posses the skill set to actually guide them on what to do.
It’s never enough to simply care. One most know their limitations and direct those in need to others who understand what is truly occurring and give folks a fighting chance to save their home from a Trustee sale that may not be legal in the eyes of the Court.
If you or someone you know is as frustrated as I at the utter contempt the top banks seemingly have for the American homeowner, than pass on this information. If you believe you have been a victim, than fight. Counseling is great and I always encourage those who are struggling to engage a HUD Counselor. It is never a good idea to attempt to negotiate with your lender on your own. However, if you happen to posses the financial wherewithal to actually pay for a forensic audit, determine if your Federal rights under the Truth-In-Lending Disclosure Laws were violated as well as determine if the standard underwriting criteria that should have been followed was ignored, then you most likely have a strong case. (NO, I AM NOT PRACTINCING LAW HERE BUT ONLY OFFERING MY HUMBLE OPINION) And, you may be able to be yet another case that is going in the favor of the homeowner and NOT the banks.
Read some of the excerpts from my reading and utilize this research for your benefit. Ellen Brown is a lawyer who did most of the research and deserves credit;

*Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles — and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.
*2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure.
*U.S. District Judge Lynn Adelman held that Chevy Chase Bank had violated the Truth in Lending Act by hiding the terms of an adjustable rate loan, and that thousands of other Chevy Chase borrowers could join the plaintiffs in a class action on that ground. According to a June 30, 2008 report in Reuters:
“The judge transformed the case from a run-of-the-mill class action to a potential nightmare for the U.S. banking industry by also finding that the borrowers could force the bank to cancel, or rescind, their loans. That decision was stayed pending an appeal to the 7th U.S. Circuit Court of Appeals, which is expected to rule any day.

*Securitization (http://en.wikipedia.org/wiki/Securitization) was key to helping banks avoid the regulators’ 10:1 rule. To make their risky loans appear attractive to buyers, banks used complex financial engineering to repackage them so they looked super-safe and paid returns well above what equivalent super-safe investments offered. Banks even found ways to get loans off their balance sheets without selling them at all. They devised bizarre new financial entities - called Special Investment Vehicles or SIVs - in which loans could be held technically and legally off balance sheet, out of sight, and beyond the scope of regulators’ rules. So, once again, SIVs made room on balance sheets for banks to go on lending.
“Banks had got round regulators’ rules by selling off their risky loans, but because so many of the securitized loans were bought by other banks, the losses were still inside the banking system.

*There is more at stake here than just the equitable treatment of injured homeowners and investors in mortgage-backed securities. When the dust settles, it will be the banks, investment brokerages and hedge funds for wealthy investors that will be saved. The repossessed will become the dispossessed; and unless your pension fund has invested in politically well-connected hedge funds, you can probably kiss it goodbye, as teachers in Florida already have.
*The banking genie is a creature of the law, and the law can put it back in the bottle. The imminent failure of some very big banks could provide the government with an opportunity to regain control of its finances. More than that, it could provide the funds for tackling otherwise unsolvable problems now threatening to destroy our standard of living and our standing in the world. The only solution that will be more than a temporary fix is to take the power to create money away from private bankers and return it to the people collectively. That is how it should have been all along, and how it was in our early history; but we are so used to banks being private corporations that we have forgotten the public banks of our forebears. The best of the colonial American banking models was developed in Benjamin Franklin’s province of Pennsylvania, where a government-owned bank issued money and lent it to farmers at 5 percent interest. The interest was returned to the government, replacing taxes. During the decades that that system was in operation, the province of Pennsylvania operated without taxes, inflation or debt.

*Andrew Jackson told Congress in 1829, “If the American people only understood the rank injustice of our money and banking system, there would be a revolution before morning.” A wave of private actions, class actions and government lawsuits aimed at redressing injurious banking practices could spark a revolution in banking, returning the power to advance “the full faith and credit of the United States” to the United States, and returning community assets to local ownership and control.

*“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
– Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

*People representing themselves are often not taken seriously, and they are likely to miss local rule requirements. With that warning, here is some general information on challenging standing to foreclose:

*From Ellen Brown-Some states are judicial foreclosure states and some are non-judicial foreclosure states. In a judicial foreclosure state (meaning the matter is heard before a judge), if a promissory note or recorded assignment naming the plaintiff is not attached to the complaint, the defendant can file a response stating the plaintiff has failed to state a claim. This can be followed with a motion called a demurrer to the complaint. Different forms of demurrers can be found in legal form books in most law libraries. In essence the demurrer states that even if everything in the complaint were true, the complaint would lack substance because it fails to set out a copy of the note, and it should therefore be dismissed. Ordinarily there is no need to cite much in the way of statutes or case law other than the authority reciting the necessity of showing the note proving the plaintiff is entitled to relief.
In a non-judicial foreclosure state such as California, foreclosure is done by a trustee without a court hearing, so the procedure is a bit trickier; but standing to foreclose can still be challenged. If the homeowner has filed for bankruptcy, the proceedings are automatically stayed, requiring the lender to bring a motion for relief from stay before going forward. The debtor can then challenge the lender’s right to the security (the house) by demanding proof of a legal or equitable interest in it.8 A homeowner facing foreclosure can also get the matter before a court without filing for bankruptcy by filing a complaint and preliminary injunction staying the proceedings pending proof of standing to foreclose. A judge would then have to rule on the merits. A complaint for declaratory relief might also be brought against the trustee, seeking to have its rights declared invalid.9

Jeff Barnes ( http://4closurefraud.org/2010/01/06/1018/ ) writes:
This opinion … serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.
“assignment of mortgage,” the document that certifies who owns the property and is thus entitled to foreclose on it. Especially these days, the assignment is key evidence in a foreclosure case: With so many loans having been bought, sold, securitized, and traded, establishing who owns the mortgage is hardly a trivial matter. It frequently requires months of sleuthing in order to untangle the web of banks, brokers, and investors, among others. By law, a firm must execute (complete, sign, and notarize) an assignment before attempting to seize somebody’s home.
*A legal team fighting for homeowners rights calling themselves “Ice” ran across outright fraud by a legal group representing the banks;
A Florida notary’s stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn’t even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern’s (The head of the law firm representing the banks in Florida) people were foreclosing first and doing their legal paperwork later? In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. “There’s no question that it’s pervasive,” says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. “We’ve found tons of them.”
This all might seem like a legal technicality, but it’s not. The faster a foreclosure moves, the more difficult it is for a homeowner to fight it—even if the case was filed in error. In March, upon discovering that Stern’s firm had fudged an assignment of mortgage in another case, a judge in central Florida’s Pasco County dismissed the case with prejudice—an unusually harsh ruling that means it can never again be refiled. “The execution date and notarial date,” she wrote in a blunt ruling, “were fraudulently backdated, in a purposeful, intentional effort to mislead the defendant and this court.”
Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC), for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note … ; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

MERS is, according to its website:
… an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.

About Ellen Brown:
Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves and how we the people can get it back. Her websites are webofdebt.com and ellenbrown.com.

Chris Miscellaneous, Trustee Info

We just filed Ch 13 bankruptcy and have a 5 year Option Arm set to recast in April 2011. Our mortgage company has sent us the HAMP paperwork for a loan modification, but we’re not sure we’re going to be able to afford it. Our realtor tells us we can sell the house for more than we owe but we would probably net out with maybe a few hundred bucks. We can’t buy anything else due to the credit problems we now have. We don’t know what to do. We want to try to save our home, we don’t want to sell but we don’t want to lose the house to foreclosure either. Can you help?

Chris Miscellaneous

After contacting a broker, when do you become contractural obligated to them in California. For example: there is a listing on the internet that I would like to have more information about. If I contact the agent to ask questions on the property does that automatically include them in the transaction. We were looking at buying an investment property and signed a contract with an agent (Agent 1) that said that the property we are interested in was not listed. Well in one google searche we found it on the internet listed on another agents (Agent 2)web site. The Agent 1 is not performing in regards to getting basic information requested about the property. I want to contact Agent 2 and see what information they have and inquire if they are the listing agent ect. My partner said that we would be obligated to Agent 2 by making verbal contact with them about the specific project. Is this true? If my agent, who has lied and said that the property was not officially on the market, isn’t performing for over a week what options does this leave us with. We are trying to expidite our due dilligence on the property to see if it is worth putting in an offer, but we are getting no where. Thanks for your time.

Chris Miscellaneous

Below is an excerpt from the US Treasury Press Release. The Housing Finance Authority for each individuals State will determine, with conditions, how best to utilize these additional funds to assist those who are struggling due to being unemployed or under-employed or are out of work due to a medical issue.
These monies are to assist them in making their mortgage payments for up to 24 months.

Under the additional assistance announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

States that have already benefited from previously announced assistance under the Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program. States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established guidelines, meet the distinct needs of their state.

The states eligible to receive funds through this additional assistance, along with allocations based on their population sizes, are as follows:

Alabama $60,672,471
California $476,257,070
Florida $238,864,755
Georgia $126,650,987
Illinois $166,352,726
Indiana $82,762,859
Kentucky $55,588,050
Michigan $128,461,559
Mississippi $38,036,950
Nevada $34,056,581
New Jersey $112,200,638
North Carolina $120,874,221
Ohio $148,728,864
Oregon $49,294,215
Rhode Island $13,570,770
South Carolina $58,772,347
Tennessee $81,128,260
Washington, DC $7,726,678

HUD Emergency Homeowners Loan Program

This new program will complement Treasury’s Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states. Those areas are still being determined.

The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

1) Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;

2) Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;

3) Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.

Chris Miscellaneous

Core Logic Releases Its 2010 Short Sale Research

Here are a few noteworthy highlights I found after reading the twelve page report:

 

Short sale volume has tripled since 2008.
Short sale annual volume is currently at 400,000 and growing and will remain a necessary part of the market in the near future.

California, Arizona, Florida and Texas make up over 55% of this volume alone.

According to the report, foreclosures losses are about 12% more, on average, than a short sale.

Freddie Mac recently reported that short sale volume is up over 700% since 2008.

The need for short sales will continue. At present, some 25% of all U.S. mortgages are in negative equity — homeowners owing more than their properties are worth. In some states, like Nevada, that number can go as high as 70%.

Other government programs, like the Home Affordable Foreclosure Alternatives Program, are actually intended to drive short sales. To curb foreclosures, that program offers cash incentives to key stakeholders (including homeowners) to execute and close short sale transactions. Its success, however, has been hampered by what officials have acknowledged may be a lack of necessary antifraud protections.

Fraud is the number one concern for lenders. The greatest concern seems to be when Realtors withhold other offers and only submit an “investors” offer which is of course lower than the market value. Subsequently, the lender accepts this offer and the Realtor then assist the investor in the sale to another for a higher price quickly after the investor purchased the short sale.

Impact on the Industry
The financial impact of such unnecessary losses on the lending community is significant. As shown below, we (Core Logic) estimate that lenders are incurring nearly a third of a billion dollars in unnecessary loss annually.

ESTIMATED FINANCIAL IMPACT
► Estimated Annual Short Sale Volume 400,000
► % of Short Sales with Unnecessary Loss 1.87%
► Average Amount of Unnecessary Loss $41,500
► Estimated Industry Financial Impact $310,000,000

The report concludes with a warning to not lock out investors by over reaching, but to require additional disclosures such as a Realtor disclosing if they have any constructive knowledge of additional relationships occurring. My words not Core Logics. Additionally, the report suggest a cooperative nature of the industry in which disclosure and sharing of information amongst lenders minimizes this inherent risk.

Chris Miscellaneous

For those of you who know me, I am a bit of a cynic. I didn’t start out my life this way mind you, I have grown to become a cynic after years of witnessing others who, through their ignorance, or their own selfish agenda, do things that are wrong to others.

I am a huge fan of FHA, but I fear this is yet another program that offers false hope to a group of homeowners that are reluctant enough already to face reality and now have another reason to believe that help is just around the corner.

This “help” never seems to come and eventually the borrower exhaust all of their options and ends up quietly becoming another foreclosure down the road after everyone tells them to fight to keep their home, even though ALL of the underwriting guidelines and contractual obligations tell the rest of us “in the business” that this ain’t gonna happen.

I read this story this morning from DS News (8-10-10) and when I read that it requires a 10% principle forgiveness, the borrower to be current on their mortgage and a loan to value of no more than 97.5%, I groaned.

It is a great program and in true FHA style, it is make sense. However, the program is voluntary on the part of the servicers and as long as they have other options, via the Federal government, private mortgage insurance, mortgage pool insurance, Shared Loss Agreements, Pool and Servicing Agreements that afford some servicers an opportunity to actually create more cash flow for short term gain by not cooperating with this program, it will flounder like the other great ideas.

With that said, here is the story that outlines that basics of the program, but if one actually wants my advice, you’ll find an honest professional to actually run your qualification numbers and tell you flat out if you qualify for your current mortgage, or if you are close. If you are neither, you should solicit help from a HELP Certified professional who will direct you to a  NeighborWorks, HUD approved counselor who believes that their is no shame in cooperating with a short sale under the Home Affordable Foreclosure Alternative program designed by Treasury.  Between the two of them, you’ll be able to understand your rights as well as responsibilities and move forward.

You may not qualify due to your servicers own agenda on how they make their money, but the fact that you can document that you tried to cooperate will potentially allow you to purchase a home in three short years under current FHA guidelines.

Here is the story on the principle write down program:

Starting September 7, the federal agency will offer new FHA-insured mortgages to certain underwater, non-FHA borrowers who are current on their mortgage payments and whose lenders agree to write off at least 10 percent of the unpaid principal balance.

This last part could prove to be the caveat that leads the new FHA refi program down the same road as the federal government’s other housing programs – a road of below par results and public criticism.

Lenders are fantastically reluctant to write down mortgage principals. It would mean either they or their mortgage investors would have to eat the amount of debt that’s forgiven, and it could set a precedent that a loan contract is not a contract at all if the terms spelled out in black and white can be changed based on market nuances, such as a slump in real estate values.

The FHA refi program for underwater borrowers was originally announced in March as part of the administra-
tion’s expanded foreclosure prevention strategy. On Friday, FHA and HUD published a mortgagee letter explaining to lenders the details of the new negative equity refinancing program.

To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth, be current on their existing mortgage, and occupy the property as their primary residence. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal of at least 500.

Participation in the program is voluntary and requires the consent of all lien holders. The borrower’s existing first lien holder must agree to write off at least 10 percent of their unpaid principal balance to bring the borrower’s combined loan-to-value ratio to no more than 115 percent.

In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.

To facilitate the refinancing of new FHA-insured loans under this program, the Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens.

Servicers planning to take part in the new program must execute a Servicer Participation Agreement (SPA) with Fannie Mae by October 3, 2010.

HUD says interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees to write down a portion of the unpaid principal.

FHA Commissioner David H. Stevens, said, “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

Chris Miscellaneous

My rental property was foreclosed on in 3/2010 after dealing with BofA (Countrywide) and attempting to do a short sale.  My HELOC was opened in order to purchase the property in 2005, $40k.  I ended up signing an agreement with a servicing loan company to remodify my loan. I’m at the end of making 3 months of payments and my back payments (approx $1200) is due this month (Aug.). If I don’t continue with the modification agreement, they said the loan will be “charged off”.  A friend told me that the debt will not go away, and the collection agencies are worse to deal with as far as working out a reasonable payment.  Currently, my payments were $196/mo.  After I pay the $1200, they would review my account to see if they could modify it and what the payment amount would be.

I don’t have $1200 to pay up front.  I have a 2 loans for my primary residence as well as 2 credit card debts.  I’m a single parent of 2 children (1-student, 1 teen). 

1) Is it reasonable for the bank to send this to a collection agency since it’s only $40k?
2) Should I let it go since I already have a foreclosure on my record?
3) What else can I do, given the full $1200 is due by 8/19/10?

angvillanueva Miscellaneous

August 1, 2010

News and Views

In Riverside County:
Notice of Defaults-Over the last 120 days=8,245 was 10,122 in May
Notice of Trustee Sales, last 120 days, Currently Scheduled=11,727 was 12,976 in May
Actual Trustee Sale-Over the last 120 days= 5,779 was 6,275 in May, Now bank owned
Trustee Sales cancelled over last 120 days and still need to be dealt with=7,002 (This number must be added to the number of defaults above for accurate totals)
In San Bernardino County:
Notice of Defaults-Over the last 120 days= 6,983 was 7,903 in May
Notice of Trustee Sales Currently Scheduled=9,605 was 10,427 in May
Actual Trustee Sale-Over the last 120 days=4,712 was 5,224 in May
Trustee Sales cancelled over last 120 days and still need to be dealt with=5,660
In Sacramento County
Notice of Defaults-Over the last 120 days=4,870 was 5,406 in May
Notice of Trustee Sales Currently Scheduled=5,335 was 5,520 in May
Actual Trustee Sale-Over the last 120 days=3,136 was 3,485 in May
Trustee Sales cancelled over last 120 days and still need to be dealt with=2,761
In Orange County
Notice of Defaults-Over the last 120 days=4,855
Notice of Trustee Sales Currently Scheduled=8,031
Actual Trustee Sale-Over the last 120 days=1,818
Trustee Sales cancelled over last 120 days and still need to be dealt with=5,527
In San Diego County
Notice of Defaults-Over the last 120 days=5,975
Notice of Trustee Sales Currently Scheduled=8,466
Actual Trustee Sale-Over the last 120 days=2,770
Trustee Sales cancelled over last 120 days and still need to be dealt with=5,502
*Information is available for your individual City or zip code, throughout California- Source, Foreclosure Radar

“Economist are currently giving Astrology a good name.” Source, unknown

Many of us are feeling this way as we have attended workshops and private events from some of the highest profile lectures and economist. Many of them have been reporting since 2008, that the next quarter or two will be a bumpy ride and then things will stabilize and from there we will see slow growth for a few years before things begin to heat up. Eventually they will be correct.

Whether one is a bull or a bear on the market can be predicated on who is paying them to do the research and report on it. Banks and industry economist can, at times, seem to paint a nice picture of what is just around the corner. Any and all positive news, even if it is only for one to two months, is now considered a trend and reported as proof that things have turned around.

As the largest holders of mortgage backed securities that are at risk continue to unload their portfolios to vulture funds of one sort or another, the free market system will begin to do its job. Some will receive principle reductions that will be earned over a three year period of on time performance of their modified terms and others will simply find themselves having to rent for a period of three to five years before entering the home buying market once again.

According to the reports on the HAMP program, the average “back end” ratio of a borrower who has received assistance is over 63%. This number is a combination of one’s total housing expense plus all other installment and revolving debt divided by their gross monthly earnings. Historically, the number that was tolerated by the industry and allowed the US to have some of the best performing mortgage backed securities in the World was 36% to 38%. FHA allowed one to go as high as 41%. 63% is typically viewed as not sustainable.

If a family of two wage earners receives a modification with a 63% back end ratio this means they are unable to afford virtually anything else other than their home and serving their current debt. Most modifications are temporary and will have graduating payments in the future. If this families earning are not going to go up commiserate with their increase in housing expense the fear is that they postponed the inevitable. In addition, as they continue to meet new neighbor after new neighbor who purchased their model for 30% to 50% less than what their modification balance is, they’ll begin the process of asking themselves; “What are we doing?”

Currently, counselors are to sit with borrowers, take in their financial information send it into the lender/servicer who will get the documentation to one who understands the GSE and HUD underwriting criteria. Next, the servicer will then underwrite the borrowers qualifications and enter this data, along with valuation information, as well as projected valuation data and run the Net Present Value calculation. This process helps to determine if it is in the lender/servicers best interest to modify, short sale, or foreclose.

If all of the industry can agree that this is what is occurring, why not allow the industry retail arms to join the fight and get paid for doing this? The money is already being spent and the results are not currently impressive. The Director of HAMP, the Office of the Comptroller and the Office of Thrift Supervision, have all lamented that the efforts to date have not been what was originally hoped for.

If too many obtained loans they could not afford through poor underwriting standards and then you offer loan modifications by simply asking people what they make and what their expenses are over the telephone then is it any surprise most modifications failed or are failing? In fairness, this practice has stopped as of June 2010 and the most recent numbers are getting better.

Telephone any loan underwriter in America and they will tell you that even seasoned loan officers and loan processors often fail to provide the necessary paperwork in order for them to make a decision on the first submission. If professionals can have trouble and this is what they do for a living, imagine how difficult this process must be for consumers who go it alone or even counselors who may not have the same background as the private sector professionals.

Cynics believe temporary cash flow to all parties involved in this daisy chain is the current goal and seen by the financial industry as the best way to manage their portfolios that will take years to resolve. This is being done knowing full well that many of those who may have received a modification will ultimately lose their home. Fitch (The ratings agency) reported on this explaining that upwards of 60% to 65% of those who receive a modification will eventually fail.

The current system is causing a back log and is causing those who would normally self cure, or not go into default in the first place to give up and become part of the delinquent statistics. The greatest challenge we have is the lack of speed in this overall process. American homeowners are not feeling like they are being treated fair and equal. They believe more and more that the system is rigged against them and the longer this process of helping homeowners in trouble takes, the more people will feel this way and stop making their payments in order to get the help that more and more are beginning to feel entitled to.

Speed, that is what is needed. Pain will occur, but it can be tolerated as the private sector will finally feel comfortable jumping in with both feet and their massive investment dollars will stimulate our economy and offer hope for many consumers who are lacking the all important confidence to spend money.

The work force is already in place. The remaining loan officers in the business are pretty good. They could do a great job collecting the proper paperwork, putting a great package together and submitting it electronically (It’s what they do!) so the underwriters can make a decision. Then, if the decision is not favorable, the borrower has a choice; self cure, short sale, or participates in a deed in lieu agreement. Foreclosure is the last option.

Here are some headlines and news you should know:

Prime Foreclosures Are On The Rise
Despite efforts to assist distressed homeowners, the number of foreclosure actions completed by mortgage servicers has steadily risen over the past four quarters, according to a new report from the Comptroller of the Currency and the Office of Thrift Supervision. “Completed foreclosures increased across all risk categories, with the highest percentage increase among prime mortgages,” the OCC/OTS Mortgage Metrics report says.
New home sales plunged 33% in May…
…after the expiring homebuyer tax credit pushed sales in April to the highest level since August 2008. Most housing analysts expected a decline but not one this significant. According to the U.S. Census Bureau, sales of newly constructed single-family homes dropped to a seasonally adjusted annual rate of 300,000 in May from a 446,000 rate in April.
California Fared Better
The California Association of Realtors reported that sales increased 1.2% compared to May a year ago. The median price statewide jumped 23.2%, to $324,430.
Short sales continue to grow…
In Q1 as an alternative to foreclosure, increasing 9.2 percent to 41,033 – more than doubling from a year ago.
Our Country’s Debt Is Growing and is a Growing Concern
Debt Interest Payments (No principle, just interest) will be 28% of ALL Federal Tax Revenue by 2014. Source: Niall Ferguson, Harvard Professor and author. The States will continue to have crisis after crisis over the next two to four years that will catch up to our Bond market causing the rate we pay as a Country to go up on our National debt and forcing us into a national crisis that will all but force massive cuts in what we have grown accustomed to and expect.

Report by Lender Processing Services Inc. (LPS)
Shows a 2.3% month-over-month increase in the nation’s home-loan delinquency rate to 9.2% in May.
The percentage of mortgage loans in default beyond 90 days increased slightly, while both delinquency and foreclosure rates continue to remain relatively stable at historically high levels. There are currently more than 7.3 million loans currently in some stage of delinquency.

The report also shows that the average number of days for a loan to move from 30-days delinquent to foreclosure sale continues to increase, and is now at an all-time high of 449 days, resulting in an increase in “shadow” foreclosure inventory.
Commercial Delinquencies
The delinquent unpaid principal balance (UPB) for commercial mortgage-backed securities (CMBS) grew by $2.9 billion last month, according to Realpoint’s monthly delinquency report. The total delinquent UPB at the end of May was $57.34 billion - a 205% increase from a year ago, when the reported delinquent UPB was $18.78 billion.
Delinquencies on loans in commercial mortgage-backed securities rose by the smallest amount in 11 months in June but could accelerate again, according to a new report from Fitch. Fitch said its CMBS delinquency index rose to 8.14% in June from 7.97% in May. The hotel sector continued to have the highest delinquencies, although the rate was flat at 18.6%.

Good News
The IMF raised its global growth forecast, and expects the world economy to expand 4.6% this year vs. an April projection of 4.2%. The revision reflects stronger-than-expected growth in the first half of the year, with Canada and the U.S. leading advanced economies. The growth forecast for 2011 is unchanged at 4.3%, making the IMF the most recent agency, but certainly not the first, to foresee slowing growth next year as the recovery loses some steam.

Multiple Credit Relationships Lead To Fewer Delinquencies
A new study developed by TransUnion finds that consumers with multiple account relationships with the same lender outperform consumers who maintain only one relationship with that lender, with the biggest improvements in delinquencies seen among mortgages.
Now I suppose we will see legislation sponsored that offers tax breaks to those who will do all of their business from mortgage, to credit card, to life and homeowners insurance with just one company. My Dad said not to put all my eggs in one basket. I think I’ll follow his advice.

Congressional Budget Office
The government’s bailout of Fannie Mae and Freddie Mac, placing the companies in conservatorship in September 2008, has been costly. The two GSEs, so far, have been given over $150 billion to stay afloat. And recent estimates from the Congressional Budget Office put the tab for subsidizing Fannie and Freddie at $389 billion, when all is said and done.
Orange County CA.
The inventory of homes in foreclosure and short sales that are on the market in Orange County, Calif., has grown by 29% so far this year, according to Altera Real Estate. The company notes, “The active distressed inventory has increased from 2,555 homes at the beginning of the year to 3,307, levels not seen since May of 2009.” In Orange County, the distressed homes inventory represents 31% of the current active inventory.

HAMP Numbers

Servicers completed 51,200 permanent modifications in June, a 7% improvement from May, but also dropped a record 91,100 borrowers in payment trials from the program.
Overall, the Home Affordable Modification Program has helped nearly 400,000 struggling borrowers reduce their mortgage payments to 31% of monthly income as part of permanent modifications to their residential loans.
But 520,800 mortgagors that attempted to qualify by completing the three-month payment trials fell short and their trials were cancelled by servicers.

Refinance Applications Account for 80% of the Market

Refinancing applications are now at their highest level since last spring and are driving the increase in this week’s Mortgage Bankers Association Market Composite Index.
Bernanke called the economic outlook; “unusually uncertain”!
Bernanke said the Fed is prepared to take more policy actions as needed, but isn’t ready “to take any specific steps in the near term.” He also noted that current policy is “already quite stimulative” and available options “are not going to be conventional options.” Bernanke sees “moderate” economic growth despite a “somewhat weaker outlook” and low inflation with significant time needed to restore jobs.

Unemployment for IE and Other Areas
http://www.bls.gov/web/metro/laulrgma.htm

 This link will take you to the US labor statistics. Please pay attention to the U-6 figures as they reflect a more accurate picture.

Protecting Tennant At Foreclosure Act

Renters who find themselves indirect victims of foreclosure were not forgotten in the financial reform legislation. The Dodd-Frank bill will extend the Protecting Tenants at Foreclosure Act (PTFA) through the end of 2014.

Freddie Mac Report Their Delinquencies Are Down

The number of past due home loans guaranteed by Freddie Mac has fallen below the 4 percent threshold. The company’s latest report shows that the number of single-family mortgages at least three months past due or in foreclosure stood at 3.96 percent at the end of June. That’s down from a high of 4.20 percent as recently as February

China’s Massive Spending May Be Coming to an End?
Chinese manufacturing slowed in July, with the official purchasing managers’ index sinking to its lowest level since February 2009. Chinese growth is being restrained partly by government curbs on lending and property speculation but, taken together with disappointing growth in the U.S. and elsewhere, the slowdown in Chinese manufacturing will likely add to global recovery fears.

Great News on HSBC
HSBC’s net income doubled as the bank’s North American unit returned to profitability for the first time in three years and loan loss provisions dropped 46%.

HAMP, Fannie, Freddie and FHA
They’re all reporting better numbers based on new originations. HAMP can now report that while very selective on who ultimately gets a modification; those that do are performing much better. Fannie, Freddie and FHA are all reporting that the current group of borrowers applying for loans is some of the best quality of borrowers they have seen in recent memory.
If you are in the business you know this to be true as many in the business are afraid to fund a loan since “buy backs” are now a daily topic around the office.

A Double Dip Will Be Historically Unusual
So say the experts and I sure hope they are correct. Overall the economy is doing better and the recovery is personal and the timing of the recovery depends on when you get a job that allows you to pay your bills.

Buyers, Hear Me On This. The Time Is Now!
Yes, values are predicted to go lower, but the cost of money is expected to go up the minute employment figures stabilize as the Feds head of inflation. Just a 2% jump in interests will erode a huge amount of purchasing power for you. Rates are artificially being held down to get you to take action. Do it now.
$250,000 loan amount at today’s 5% is $1,342.05, principle and interest. At 7% the payment is $1,663.26. The difference is $321.21. At 7% over a 30 year term this predicted jump will erode, $48,280.29 of your buying power.
If the homes are predicted to go down another 7 to 10%, that’s between $17,000 and $25,000 in temporary losses of value on a home that you bought at historic low interest rates fixed for thirty years. If you wait, you may have to pay much more in interest and possibly eroding any perceived gains due to temporary price. My advice, feel free to jump. If you wait, you may be paying more in interest. This could cost you more in the long run.

Respectfully,

Chris Sorensen
Founder, USA HELP, Inc.
E-mail me at; info [at] freehomeownershiphelp [dot] org
If you wish to not receive e-mails from me/us, simply let us know and we will remove you.
This just in: WASHINGTON — Senate appropriators are annoyed at the slow implementation of the government’s Home Affordable Mortgage Program and want residential servicers — including the nation’s megabanks — to be held accountable. Source, National Mortgage News

The Nations mortgage insurance companies issued 65,792 notices of default in June, compared to 60,337 cures, ending a four-month streak where NODs lagged. Source, National Mortgage News

Chris Miscellaneous