LOCAL FORECLOSURE SEMINAR

Here is a greet opportunity to get loan modification counseling at the upcoming Foreclosure Seminar.  There is a local meeting with Freddie Mac’s representative. Check below for more information.

Foreclosure help coming Feb. 27
Freddie Mac outreach specialist holding seminar

 

By Rose Albano-Risso
Manteca Bulletin City Editor

 

LATHROP – A representative of Freddie Mac will be at the University of Phoenix in Lathrop Friday, Feb. 27, to give financially distressed South County homeowners advice on how to avoid foreclosure.

Jacqui Cosgrove, consumer outreach specialist with Freddie Mac which is the nickname for the Federal Home Loan Mortgage Corporation, will be available to personally meet with the property owners and answer their questions from 2 to 7 p.m. that day, said Freddie Mac public relations director Patti Boerger.

“This seminar will combine hourly sessions to address the process of loss mitigation from a homeowner’s best-practices perspective. It will also give borrowers the opportunity to meet with their lenders, face to face, in order to work toward a solution to avoid foreclosure,” Cosgrove said.

There will be nonprofit counseling available as well at this event “for those who have other debts or obligations to address in order to prioritize the home,” added Cosgrove.

One advantage of this seminar over just doing research on the Internet or elsewhere is that at this event, representatives of various organizations who can help individuals with hardships will be there in person to help you, she said.

“They can help you determine your options and get the process started. In certain situations, borrowers have been able to exit an event with their workout option approved that day,” Cosgrove explained.

To get approved that same day, one will need to bring the following requirements ready for the processing: proof of financial hardships which could be loss of employment or reduction of work hours, major illness or injury, divorce or separation, and death of a spouse; and statements showing income and expenses.

Cosgrove said loan modifications and other relief options are available to those who are honest and demonstrate a hardship. She defined hardship as “an involuntary inability to make your mortgage payment.”

Not being realistic is one of the mistakes commonly made by homeowners when it comes to seeking help from their mortgage companies.

“Adjustments to the original loan terms will not be made for homeowners just because they don’t want to give up their lavish lifestyle and expensive car payment, or are renting an investment property to family members for below market rent,” Cosgrove said.

Ironically, there are always those who take advantage of a sad situation to make a buck out of unsuspecting people who are already having difficulties making ends meet. Advertisements are everywhere – on television, radio and the printed media – offering services and promising results and relief from mortgage debts to vulnerable and unsuspecting consumers but at  a cost. This is a case of caveat emptor or buyer beware, Cosgrove warns consumers.

“Don’t pay organizations to help you. There are thousands of companies that are charging borrowers and telling them ‘we’ll work with your lender.’ Steer clear of anyone who charges. Instead, call one of the federally approved nonprofit counseling agencies whose services are free,” she said.

Advice for frustrated homeowners

Cosgrove’s advice to homeowners who are getting increasingly frustrated because they can’t get the attention or any answer or cooperation from their mortgage companies:

• Keep calling and make sure you’re talking to the right person.

• Demand to talk with loss mitigation area, not collections. As a consumer, you have the right to request to speak with a supervisor.

• Be sure to keep a log of each person you speak with and contact as you make an effort to work with your servicer. Oftentimes, if a borrower establishes a relationship with a HUD-certified counselor, the counselor will have access to specialized phone portals in order to help facilitate the collection of your financial data and completion of your loss mitigation request.

Added Cosgrove, “Borrowers with loans owned by Freddie Mac and others may qualify for special loan modification programs, including permanent rate reductions, mortgage term extensions or forbearance. Just remember these three rules: be prepared, be honest, and be realistic about possible outcomes.”

Freddie Mac does not have a disclosable breakout of foreclosure figures by state, said Cosgrove. However, she said that nationally, about 200,000 of Freddie Mac’s 12 million loans are either 90 days late or in some stage of foreclosure.

“We’re also approving an estimated 14,000 workouts a month through our mortgage services, which means about 3 out of 5 seriously delinquent borrowers with Freddie Mac loans avoid foreclosures. Our REO (Real Estate Owned-homes we own due to foreclosures, etc.) inventory is about 29,000 homes nationwide. In context, Freddie Mac loans account for just 7 percent of the nation’s seriously delinquent mortgages, Cosgrove said.

Five tips to make the most of your call to your mortgage servicer from Freddie Mac:

• Open your mail. Notices are sent before foreclosure proceedings begin so be sure to open your mail for loan modification offers and advice from your mortgage services. Freddie Mac advises distressed borrowers not to stand by and wait.

• Be prepared before you call. Ask to speak to someone in the loss mitigation area (not the collection area) and make sure you can quickly and concisely state your financial hardship. Workout programs are only available for borrowers with true financial hardships. Harships include: loss of employment or reduction of hours, major illness or injury, divorce or separation, and death of a spouse.

• Be able to document your income and provide details about your mortgage loan and other financial obligations so have the following documents on hand:

a. Your mortgage loan number, name of mortgage services and recent mortgage statement,

b. Your most current pay stubs,

c. Your bank statements, with account balances and account numbers, and

d. Information on other expenses and debts, such as student loans, car leases, and credit card debt.

• Be honest about your income, expenses and debt. A credit report will be pulled and income such as child support and other debts will show up.

• Be realistic. Loan modifications won’t be made for homeowners just because they don’t want to give up their lavish lifestyle and expensive car payment or are renting an investment property to family members for below market rent. If that’s the case, start reducing expenses and saving money by paring down to bare necessities.

The University of Phoenix in Lathrop is located in the Lathrop Business Park on South Harlan Road east of Interstate 5,  just south of Louise Avenue.

Thanks,
CAROL PERDEW
(209) 239-7979
wwwCentralValleyHomes.com     

 

Help for Homeowners in Refinancing and Selling

IRS to help homeowners refinance or sell homes
Presented by Yahoo Finance

WASHINGTON – The Internal Revenue Service said Tuesday it will try to make it easier for homeowners in financial straits to refinance or sell their homes.

The plan announced by IRS Commissioner Doug Shulman would speed up a process where financially distressed homeowners may request that a federal tax lien be made secondary to liens by the lending institution that is refinancing or restructuring a loan.

Taxpayers will also be able to ask the IRS to discharge, or remove, its claim to a property in certain circumstances where the property is being sold for less than the amount of the mortgage lien.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” Shulman said, stressing that “we don’t want the IRS to be a barrier to people saving or selling their homes.”

He said the program will focus on those people who ordinarily pay their taxes in full but “because of these extraordinary times are getting behind in their tax payments.”

A tax lien occurs when the government makes a legal claim to property as security or payment for a tax debt. The government thus notifies other creditors that it has a claim on the property.

The IRS can rule that its lien will be secondary to another lien, such as that of a lending institution, if it determines that taking a subordinate position will ultimately help with the collection of the tax debt. Taxpayers or their representatives may apply for a “subordination” of a tax lien if they are refinancing or restructuring their mortgage.

Lending institutions generally want their lien to have priority on the home being used as collateral.

Taxpayers may also request a certificate of discharge if they are giving up ownership of the property at an amount less than the mortgage lien if the mortgage lien is senior to the tax lien. A discharge does not relieve a person of the tax that is owed, but it does remove the lien on a particular property such as a home. The IRS would still maintain its lien on other possessions of the taxpayer.

Normally it takes about 30 days to rule on a request for a discharge or subordination of a tax lien, but Shulman said the IRS will work to speed up that process so there would be no delays for people trying to obtain new mortgage loans. The IRS urged people to contact the agency’s Collection Advisory Group early in the home sale or refinancing process.

The agency said it issues more than 600,000 federal tax lien notices annually and that currently there are more than 1 million outstanding tax liens tied to both real and personal property.

FOR REAL ESTATE INFO GO TO www.CentralValleyHomes.com

CAROL PERDEW
Prudential California Realty
(209) 239-7979
wwwCentralValleyHomes.com 

 

 

Homeowners Are Getting Help By HOPE NOW Program

Despite difficulties, homeowners finding relief with HOPE NOW program

By Jack Guttentag,
Inman News|

Editor’s note: A previous version of this story erroneously stated that the HOPE NOW Alliance of loan servicers charges borrowers for consultations. The consultations are free.

Q: “I have been giving my clients an article you wrote about a year ago advising borrowers having payment problems how to request a modification in their loan contract … Could you bring it up to date?”

A: A lot has happened since that article was written. Very shortly thereafter, the HOPE NOW program promoted by Treasury Secretary Henry Paulson began as an effort by housing counseling agencies and mortgage servicers to modify loans on a strictly voluntary basis. Since then, the first recourse of borrowers in trouble has been to call them at 1-888-995-HOPE. I have sent many people to HOPE NOW, with mixed feedback.

House prices have declined further in the last year, turning more borrowers “upside down” where they owe more on their mortgage than their house is worth. This induces some borrowers to stop making payments, which increases foreclosures. But price declines also reduce the amounts that investors recover from sale of the house following a foreclosure, which should increase the attractiveness of loan modifications as an alternative.

In addition, a full-fledged financial crisis has erupted, forcing the Federal Reserve to act as the lender of last resort to a series of weakened financial firms unable to meet their cash needs. The coverage of deposit insurance has been broadened and money market funds are now insured. In the works, furthermore, are plans to purchase mortgage assets from investors, to make direct equity investments in banks, and even to insure payment of principal and interest on mortgages and other assets.

An excellent study by Alan M. White provides some indications of what has happened to modifications during this tumultuous period. In a sample of subprime loans he examined, the mortgage payment was reduced in only about half the modifications, and the balance was reduced in very few cases. In many cases, the modification consisted of adding the amounts past due (“arrearages”) to the balance, which raises the payment. It is no wonder that during the annual period he examined, the number of foreclosures swamped the number of modifications.

Borrowers having payment trouble have choices. The rational choices are either to seek help immediately, or to take immediate action themselves. Those who put their heads in the sand will lose their home in a foreclosure.

I suggest that those who elect to seek help go to HOPE NOW first, and if that does not work out, to try a HUD-approved counselor. Before seeing a counselor, prepare yourself by pulling together all the data that the counselor will need; the form at Genworth Financial can be used for this purpose.

Responding to a solicitation from one of the many modification consultants who have emerged over the last year is extremely risky. They charge $1,000 and up, usually payable in advance. Some may do a good job, but many are hustlers looking to garner upfront fees.

If you elect to handle the matter yourself, you must get to the servicer’s loss mitigation department, which may take some persistence. The burden of proof is on you to demonstrate and document that, for the reasons you lay out, you can no longer make the required payment. You must also demonstrate and document that you can make a smaller payment that you specify.

Under the new FHA program called H4H (“Hope for Homeowners”), FHA will refinance loans of borrowers having payment problems if the existing investor will write down the loan balance to 90 percent of current market value. HUD publishes a list of lenders participating in this program. I am not sure whether there is any benefit to a borrower contacting one of them before the firm servicing their existing loan has agreed to pay down the balance. But it can’t hurt to get that lender on your side.

Aside from the possible increased risk exposure under FHA, the federal government has not channeled any crisis money directly to borrowers. The new programs referred to earlier will direct $700 billion or more to financial institutions, but none to households. A strong case can be made that this is unbalanced.

The root cause of the crisis is the decline in home prices, which will continue so long as the foreclosure problem isn’t solved. Arguably, dealing directly with this problem is more effective than dealing with it indirectly. The Treasury recently put out a request for proposals on a mortgage payment insurance plan, which could be the perfect vehicle for providing direct assistance to borrowers. Stay tuned.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.

Presented by
CAROL PERDEW
Prudential California Realty
(209) 239-7979
wwwCentralValleyHomes.com

Thoughts to Help Homeowners Overcome Mortgage Fright

Mortgage Fright and Moral Quandaries

by Jack M. Guttentag
Featured on Yahoo Finance

The mortgage world has suddenly become very frightening to many people who have no real reason to be frightened. Their mortgages are in good standing, they are not having any trouble meeting their payments, yet they are in distress — in large part because so many around them are in distress. Fear is contagious. The only antidote I know to fear is good information.

One important thing that people suffering from mortgage fright often forget is that a mortgage loan is a contract between two parties, and it cannot be violated by either without the permission of the other. If the loan is sold, the purchaser replaces the originating lender as the contracting party and is subject to the contract in the same way. If the servicing of the loan is sold, the servicer as the agent of the owner is required to abide by the terms of the contract, and the same holds if the loan is placed in a pool as collateral for a mortgage-backed security.

The two letters below are from borrowers who do not have a problem with their current mortgages but are distressed about what might happen in the future.

“Crazy “Can whoever owns my mortgage demand immediate repayment of the balance? I know it doesn’t make sense, but crazy things seem to be happening…”

Mortgage contracts do not give the lender the right to demand immediate repayment. Balloon loans require repayment at the end of the balloon period, but that is stated in the contract. Fortunately, there are not too many balloon loans around.

Even if lenders had the legal right to demand immediate repayment, they wouldn’t do it because it would only generate more foreclosures. For the same reason, borrowers with balloon loans in good standing who are unable to refinance anywhere else will find that their existing lender will prefer to refinance them than to foreclose.

Things Are Happening”

A Rate Is Adjustable — Not the Index

“When the rate on my ARM (adjustable-rate mortgage) adjusts next year, the new rate should be the one-year Treasury rate at the time, plus a margin of 2.5 percent. Last year, however, my lender replaced the Treasury rate on new loans with Libor. Because of the crisis, Libor is now 2.5 percent higher than Treasury. Can my lender switch my ARM to Libor when my rate is adjusted?”

No way. The rate is adjustable but not the index used to calculate it. Your ARM contract stipulates the index and its source, and the only circumstance in which a different index can be substituted is in the event the specified index is no longer available. The different Treasury indexes used by ARMs are compiled by the Federal Reserve and there is zero likelihood that they will disappear.

When a Borrower Is Upside Down

I wish I could answer the next letter with the same degree of certainty.

“We bought our house just last year with 100 percent financing; now it is worth $40,000 less than we owe. I don’t know what to do. Do we keep making mortgage payments or do we stop? A friend has advised us to lock the door and send the key to the lender, but that doesn’t sit very well with me. We’ve always met our obligations and have good credit. What do you advise?”

This letter is typical of many I have received from borrowers who are “upside down” in owing more than their houses are worth. I have a lot of trouble dealing with it because in good part it is a moral issue.

My right-handed side says that when you borrow money, you should pay it back if you can. During the many years when house prices were rising, he never once heard of a mortgage borrower offering to share the capital gain with the lender. There is no justification in forcing the lender to share the capital loss.

My left-handed side rejoins that very few of the people who are upside down today enjoyed a capital gain on previous homes that they owned. Further, the borrower’s major obligation is to his family, not to his lender. If the financial gain from letting the house go to foreclosure more than offsets the pain of having their credit trashed and having to find a new place to live, then that is what the borrower should do.

There is an economic dimension to this quandary. If those who are upside down could be assured that house prices had hit bottom and within a year or two they will be right side up, there is little doubt that most would elect to stay the course. Unfortunately, no economist in good conscience can provide such assurance today.

Finally, there is a policy dimension. Upside down borrowers would be encouraged to stay the course if they had some reason to believe that the government will help them get right side up. Right now, the prospects for this are extremely murky. But don’t write the possibility off just yet.

CAROL PERDEW
(209) 239-7979
wwwCentralValleyHomes.com

FORECLOSURE FILINGS DOWN IN SEPTEMBER

Foreclosure filings down 12% in September

New state laws slowing foreclosure process

By Inman News

New state laws that require loan servicers to give advance notice before filing a notice of default helped push down foreclosure-related filings by 12 percent nationwide in September, data aggregator RealtyTrac.

California, which accounts for nearly one-third of foreclosure activity, passed legislation that took effect in September requiring lenders to make contact with borrowers 30 days before filing a notice of default. Notices of default in California dropped 51 percent in September, with a corresponding “significant impact” on national numbers, RealtyTrac said.

RealtyTrac said notices of default fell 66 percent in North Carolina, a state that now requires lenders to provide homeowners and the state commissioner of banks 45 days’ advance warning of plans to file a notice of default.

Lenders file notices of default as the first step in the foreclosure process, in most cases after borrowers fail to make two or more payments. A notice of default starts the clock ticking on a forced auction sale or bank repossession of a delinquent borrower’s home.

Foreclosure-related filings include default notices, auction sale notices and bank repossessions. Because many borrowers refinance, get current again on their loans, or negotiate a short sale or loan modification with their lender, not all properties subjected to filings are actually repossessed or sold by lenders.

But in many instances, the new laws governing notice of default filings may only delay lenders from initiating the foreclosure process.

After a new Massachusetts law took effect in May requiring that lenders give homeowners a 90-day right-to-cure notice, initial foreclosure filings were lower than normal for the following three months. But initial foreclosure filings were up 465 percent from August to September, RealtyTrac said, as the first loans subject to the new rule emerged from the 90-day window.

Nationwide, RealtyTrac counted foreclosure related-filings on 265,968 properties in September, down 12 percent from August but up 21 percent from a year ago.

At the state level, Nevada saw foreclosure-related filings jump 11 percent in September. The rate of foreclosure-related filings in Nevada — one for every 82 homes — was the highest in the nation, and more than five times the U.S. average of one filing per 475 homes.

With one filing for every 178 homes, Florida moved from fourth place to second on the list of states with the highest foreclosre rates.

In California, the dramatic decline in notices of default contributed to a 32 percent decrease in foreclosure-related filings. Still, one in 189 homes was subjected to a filing, the third-highest rate in the nation.

Arizona, Georgia, Michigan, Ohio, New Jersey, Indiana and Colorado rounded out the list of the 10 states with the highest foreclosure rates.

For the third quarter, RealtyTrac counted foreclosure filings on 765,558 homes, up about 3 percent from the second quarter and 71 percent from a year ago.

Six states — California, Florida, Arizona, Ohio, Michigan and Nevada — accounted for more than 60 percent of foreclosure-related filings.

The 10 cities with the highest foreclosure rates among the nation’s 100 largest metropolitan areas in the third quarter were located in California, Florida, Arizona and Nevada.

They were Stockton, Calif.; Las Vegas, Nev.; Riverside-San Bernardino, Calif.; Bakersfield, Calif.; Fort Lauderdale, Fla.; Phoeniz, Ariz.; Sacramento, Calif.; Orlando, Fla.; Fresno, Calif.; and Oakland, Calif.

Search Bank Owned Homes at CentralValleyHomes.com

CAROL PERDEW
Prudential California Realty
(209) 239-7979

 

Homeowners May Be Locked In Homes With Negative Equity

Upside-down borrowers locked into homes
Study find More May Be Stuck Than Displaced

By Matt Carter, Inman News

A new study suggests buyer psychology and tighter credit aren’t the only factors keeping would-be home buyers on the fence — homeowners with negative equity are often “locked in” to their existing homes and are nearly 50 percent less likely to move in order to take a new job, cut their commute time or move to a neighborhood with better schools.

The study, Housing Busts and Household Mobility, found that while becoming “upside down” forces many homeowners to move from their homes because of foreclosure, an even greater number have historically ended up stuck in their homes.

That’s because until housing prices rebound, a sale of their existing home won’t pay off their existing mortgage — let alone generate the proceeds needed for a down payment on their next home.

The study’s authors — housing experts at the University of Pennsylvania Wharton School of Business and the Federal Reserve Bank of New York — warned that the repercussions of “lock in” include less efficient job markets and reduced incentives for homeowners to keep up and make improvements to their homes.

Some families will not be able to move to access better jobs in alternative labor markets, the study concluded, while others who would like to move to access better schools or a different-size home will be unable to do so, the study said.

The study looked at two decades of housing data, covering the period from 1985 to 2005, and found that negative equity reduces homeowner mobility more than previously believed. All in all, having negative equity reduced the percentage of homeowners moving within a two-year period by 5.6 percentage points, a reduction of 47 percent from the baseline mobility rate of 12 percent.

“That the net impact of negative equity … has been to reduce, not raise, mobility may surprise some given the high number of defaults and foreclosures in the current environment,” the study noted.

The study looked at a period when subprime lending was not nearly as prevalent, and included only owner-occupied homes — not those purchased as investments or second homes. Only time will tell whether the number of people locked into their homes during the current downturn outnumbers those forced to move because of foreclosure, the authors concede.

Even if the study’s analysis of the past can’t simply be extrapolated into the future, “policymakers should begin to consider the consequences of lock-in and reduced household mobility because they are quite different from those associated with default and higher mobility,” the authors said.

More research is “urgently needed” on issues surrounding the “financial frictions” associated with potential mortgage lock-in, the study said.

According to Worldwide ERC — formerly the Employee Relocation Council — about 794,000 households relocate a year because they are transferred to a new job within the U.S. About 54 percent are homeowners, while the rest are renters.

Worldwide ERC reports that most companies offer to purchase at least some employees’ homes if they can’t sell, while 20 percent reimburse employees’ selling expenses. The group, which represents organizations that manage relocation programs, estimates $32 billion a year is spent on U.S. corporate relocations.

The new study provided an overview of past research demonstrating that falling home prices or rising interest rates can lock borrowers into their homes. Households without access to enough cash or credit may find their options constrained even if home equity does not turn negative.

Another factor that can trigger the “lock-in effect” is the original loan-to-value (LTV) ratio. The smaller the down payment provided by the home purchaser, the more quickly they end up “upside down” in the event of price declines.

The study noted that in the San Francisco Bay Area, LTV ratios were typically around 80 percent until the end of 2002, and then increased sharply to 90 percent in 2004.

“Essentially, the typical new home buyer in the Bay Area bought a house for $800,000 in 2006 using a $720,000 mortgage,” the study concluded. “If prices really do decline by 25 percent from their peak, the underlying house value will be around $600,000, which is much lower than the typical mortgage balance taken out that year.”

In the late 1990s, barely 10 percent of Bay Area borrowers had LTVs above 95 percent. By 2006, about 35 percent of buyers had LTVs exceeding 95 percent, and more than half exceeded 85 percent.

The study’s authors — Fernando Ferreira, Joseph Gyourko and Joseph Tracy — also shed light on how demographics affect mobility. While being married does not affect mobility, divorce does make homeowners more likely to move.

So does race, sex and education. Households headed by a person with some college have two-year mobility rates that are 4.2 percentage points higher than those without a high school degree. Whites are more likely to move than non-whites, and female-headed households are more likely to move than those headed by males, the study found.

CAROL PERDEW
Prudential California Realty
(209) 239-7979
wwwCentralValleyHomes.com

Experts Disappointed with Local Homeowner Tax Assistance

Did area get shortchanged by HUD?
Leaders, real estate experts not happy with share of foreclosure pie help

Dennis Wyatt

Managing Editor
Manteca Bulletin

Stockton-Manteca has been at the epicenter of the foreclosure meltdown during 2008.

But when it came to the Housing and Urban Development divvying up $3.92 billion this past week of the federal taxpayer funded Neighborhood Stabilization Program, a number of people ranging from both U.S, Senators Dianne Feinstein and Barbara Boxer down to Manteca Mayor Willie Weatherford and real estate professionals such as Tom Wilson believe the region got the short end of the stick.

Weatherford said it reflected Congress’ pervasive ABC – “Anyplace But California” -attitude when it comes to distributing tax assistance.

“It doesn’t say much about our Congressional influence,” added Wilson.

Boxer and Feinstein issued a joint statement that noted, “Frankly, it is beyond us how California – which has nearly twice the amount of foreclosure filings than Florida (561,223 compared to 287,210) – could receive less assistance. This makes no sense, and is totally unacceptable.”

California overall is receiving $529 million, less than the $541 million that Florida is receiving. The money is being made available to allow jurisdictions to buy foreclosed homes and turn it into affordable housing stock.

Northern San Joaquin County – which spent much of the year on top of the list of hardest hit areas by foreclosures in the nation – received the following amounts:

• Stockton, $12,146,038.

• San Joaquin County, $9,030,385.

• Modesto, $8,109.274.

• Stanislaus County, $9,744,482.

Cities such as Manteca and Tracy were either unable to apply or chose not to apply due to the complexity and short time frame. Merced, though, did, and got nothing.

Stockton still rates high on the national foreclosure list with one in every 15 homes in distress.

Manteca, a month ago, had 1,200 homes in various forms of distress whether it was an actual foreclosure or a homeowner in danger of defaulting on their loans. Home sales, though, have been picking off foreclosures at a rate somewhat faster than new foreclosures have come on the market.

That is where the rub comes in according to information released by the HUD in the methodology they used to determine what cities and states got assistance with foreclosures.

The Housing and Economic Recovery Act of 2008 calls for allocating funds to states and local governments with the greatest need as determined by the number and percentage of homes:

• in foreclosure in each jurisdiction.

• financed by subprime mortgages in each jurisdiction.

• in default or delinquency in each jurisdiction.

HUD used U.S. Postal Service data to determine areas where abandonment of homes were more likely, unemployment rates, relative home price declines, and other data to determine how likely it is that foreclosed homes will remain for extended periods of time unsold and uninhabited. 

 

View Homes for Sale at  CentralValleyHomes.com

 

CAROL PERDEW
Prudential California Realty
(209) 239-7979
wwwCentralValleyHomes.com

 

Check Your Credit Report to Avoid Mortgage Fraud

Homeowners who have equity in their homes are advised to check their credit reports to avoid criminals from carrying out mortgage fraud to tap into their home’s equity.  Check out this information below describing this problem and providing suggestions to avoid this from happening to you.

Thieves Tap Into Home Equity

by Bob Tedeschi

provided by the New York Times

Homeowners who have significant equity in their homes may be well-advised to check their credit reports frequently.

That is one conclusion of a recent report from the Identity Theft Assistance Center, a nonprofit industry group, which said that identity thieves had recently begun making targets of individuals with good credit because such people often have substantial untapped home equity.

A home equity line of credit is an ideal vehicle for criminals, according to Steve Bartlett, chief executive of the Financial Services Roundtable, a consortium of banking-related companies that offers financial support to the Identity Theft Assistance Center.

Mr. Bartlett said such credit lines are typically “big pools of money,” and if consumers do not regularly check their accounts, that pool can drain quickly.

The Federal Bureau of Investigation’s annual mortgage fraud report, which was released in April, cited home equity credit fraud as an “emerging scheme” in the slumping real estate and mortgage market.

Those with poor credit have been preyed upon by identity thieves in recent years, because thieves who pretend to be such owners could easily obtain mortgages from subprime lenders with little documentation.

Now that lenders have vastly tightened their lending criteria, criminals who specialize in mortgage fraud have little choice but to move upstream and seek out victims with good credit.

Home equity lines are a favorite option because they are almost as easy to open as a credit card account, as long as a criminal has the proper financial information.

In a typical scheme, the F.B.I. said, perpetrators pose as homeowners to establish home equity credit accounts online.

Criminals will then often send a fax to the bank requesting a wire transfer of funds to a different account. To verify the request, the bank unknowingly calls the perpetrator.

The F.B.I. does not break out various types of mortgage fraud by state, but in general, mortgage fraud is a bigger problem in New York, New Jersey and Connecticut than in many other states. New York is among the 10 states with the highest rate of mortgage fraud, while New Jersey and Connecticut rank in the top 20.

Mr. Bartlett, of the Financial Services Roundtable, said the region was a logical choice for mortgage fraud because of the relatively high value of homes there and the relatively high income of the residents.

Victims of such schemes are typically reimbursed by the lender if a bank investigation confirms fraud, Mr. Bartlett said. But lawyers who represent victims of identity theft said such remedies do not often come quickly or easily.

One way for a homeowner to determine if someone has created an equity credit line is to enroll in an identity fraud detection service like one offered by the Identity Theft Action Center, called ITAC Sentinel.

That service, which costs $10 to $18 monthly, will alert subscribers to credit inquiries or changes to an account.

Mr. Bartlett said that Identity Theft Action Center, a nonprofit organization, earns nothing on the service.

Services like ITAC Sentinel can also provide alerts to debt unrelated to home equity, like credit card accounts recently open in the subscriber’s name.

The major credit bureaus — Equifax, Experian and TransUnion — offer competing credit monitoring services. And a check of a credit report would also reveal a debt to a bank unknown to the homeowner or a debt to an existing bank that has suddenly grown larger.

CAROL PERDEW
Prudential California Realty
wwwCarolPerdew.com
(209) 239-7979

 

Banks Bid to Modify Home Loans

You could save your home Friday
Banks in Manteca in bid to see if they can modify loans on foreclosures

Dennis Wyatt
Manteca Bulletin
Managing Editor
     

There is a chance that a number of homeowners on the verge of losing their homes to foreclosure could walk away from the Manteca Senior Center on Friday cutting deals with lenders that makes it possible to stay put.

Five lenders – Countrywide, Indy Mac, Wells Fargo, Chase, and Washington Mutual – will have representatives on hand with many authorized to make loan modifications on the spot if they have all of the appropriate information from borrowers. For those who don’t have a loan through one of those five lenders, representatives of five different housing counseling firms that have HUD approval will serve as advocates.

“It means a lot to a lender when they get a call from someone that’s HUD approved,” said Ana Rocha, a Manteca Redevelopment Agency representative.

It’s all part of the grassroots non-profit No Homeowner Left Behind effort that has conducted nine similar efforts in the Northern San Joaquin Valley during the past year that have helped hundreds of families save their homes some times the same day of the workshop.

The Manteca gathering is this Friday from 2 to 8 p.m. at the Manteca Senior Center, 295 Cherry Lane. If you can’t make it Friday, there is also one Saturday from 9 a.m. to 3 p.m. at the Stanislaus Agricultural Center at 3800 Capricornia.

Edward Parcaut – a certified mortgage planner with SourceOne Financial in Modesto who is among the moving forces behind the effort to give homeowners in distress free help that arms them with knowledge and connections necessary to have a solid chance at saving their homes – noted that the chances of getting a resolution has improved significantly in recent months.

“A lot more banks are willing to take steps and modify loans upfront,” Parcaut said. “It saves them a lot more money.”

It’s based on the new reality of home loan math. For example, if a loan is outstanding for $477,000 a bank now realizes if it foreclosures on a home it can only get $277,000. It costs as much as $57,000 in additional costs to foreclosure. The bank looks at that, considers loan modification and is able to reduce their losses upfront.

There is no guarantee that a home can be saved on the spot, but the organizers say it happens every time – or within weeks of the workshop.

As for those that can’t save their homes as a bank may decide against loan modification based on financials and income, organizer Dori Beck noted, “we can work to make sure they leave their homes with the same dignity they had when they moved in.”

Those attending need to bring their loan information and documents, pay stubs for the past month, and current mortgage payment.

“There’s a huge chance it (a loan modification) can happen,” Parcaut said of those who attend the workshop.

The Federal Reserve is helping publicize the Manteca workshop by sending notices all the way back to June 1 who got foreclosure notices in San Joaquin County.

Rocha said the City of Manteca is participating in the effort under the direction of the City Council that wants to do everything it can to help people keep their homes in Manteca.

It is also open to those who have bought homes as an investment.

Parcaut said banks have worked with those people as well adding that many of those homes have renters in them who will lose a place to stay if the bank forecloses.

At such gatherings in the past, some homeowners have been successful with negotiating with bank representatives on the spot to secure 30-year fixed rate loans that have kept them in their homes,

Organizers have cautioned that not all banks are working to that degree. They also warned that some people might simply not be in a position to be helped based on the determination of the bank to get a streamlined loan at a reduced rate. The climate today has vastly improved compared to six months ago when banks were struggling to figure out what to do.

There are over 1,200 homes in Manteca property in various stages of foreclosure. Either the bank have repossessed them, they are in escrow to be transferred to another buyer, are in the final stages of having their home reposed or have just missed their first payment.

There is a serious concern about whether the market can continue to absorb foreclosures.

That is why some banks – but not all – are now working with those caught up in the foreclosure process.

For more information contact the Manteca Redevelopment Agency at 239-8427.  

 
CAROL PERDEW
Prudential California Realty
(209) 239-7979
www.CentralValleyHomes.com