Help for those Facing Foreclosure
April 17, 2007 by Maricel Ferrer-Custodio
Filed under Finance
On a recent report by Washington Post, an advocacy group has pledged $1 Billion to help people stay in their homes and fend off foreclosure.
During the boom times of real estate, a lot of people took up subprime loans in order to catch up to the rising prices of real estate and secure a property. However, the very nature of subprime loans makes them more susceptible to default in their loans. Now, that the property prices has cooled down and in some states continued to decline, more people are facing foreclosures. Those who cannot meet their loan repayments are unable to sell or refinance their property because of the decline in value. As a result, more people are facing foreclosure and the subprime lenders are starting to melt down as well. Foreclosure is a costly exercise not only for the borrower but also for the lender, the community and the government as discussed in the article.
Thus the initiative of Neighborhood Assistance Corporation of America, an 18-year-old housing advocacy group, to commit $1 billion to refinancing the loans of lower-income people at risk of losing their homes is truly an uplifting foreclosure news. The financing will come from CitiGroup and the Bank of America.
To add, Sen. Charles E. Schumer (D-N.Y.), the chairman of Congress’s Joint Economic Committee, plans to propose legislation that would provide funding using federal money to help borrowers avoid foreclosure by refinancing mortgages they cannot afford.
It is a bit depressing to read about the different foreclosure news and stories. For a change, it is good to read about solutions or ways to help alleviate the problem. Here is a link to read more about the article.
I am a home owner I livein California… about 4 years ago I obtain my own after a long drawn out divorce I brought my ex out of the home and had to put a new loan on the house… when I first put the home in my name.. I had low fico scores.. country wide had a department that they put people into rebuild their credit for me this was the beginning of everything going backwards for me… I had been living in the home for about 19 years there was already a credit history established… when I realized I would be getting a divorce I contacted my mortgage company explaining my ex continue to pay the mortgage as agreed…. there wa a period that he got behind in which I assumed there sponseibility of that mortgage I got eery thing up to date yet I was in the sub prime market… during this time… I was with a company called Rock well financial group… they always manage to get me the loan I needed yet it seem like each loan cost me more and more to obtain the last loan I recieved place me with a company called option one of which I still have…they gave me a hard prepayment pentaly I found myself in a mortage that was interest only and would have a change date in 24 months… the first change date was feb 1 2007, when this first change date took place my mortgage whent from 1677.20 to 2,517.29 almost a 900 dollar increase you can’t imagie now much stress this has place me under… I have been fighting to keep my head abouve water… I had called option one several times requesting to wave the prepayment pental so I could refinance the loan with them… they would not wave the pre payment center yet would gladly refinance me… and not to much fo a favorable term… I have talked to many of their customer service people in the refinace dept.. always politely apologizing… for not being able to meet my request.. I am puzzled… I have a mid fica score of 760. and I have had my scores about the 700. for abut the last 5-6 years… I have did everything I can do to better my credit yet the banking system.. has once again change the terms to fit the economic downfall… I am contantly told because I file stated. stated that I have to have hits… ect… I have obtan many good faith extimates. and there is a wide spread in the fees… I have had fees as low as 6500 up to 12,999… with the fees being so different it has casue me to feel like I am being taking advantage of and I can’t make a decision base on not wanting to pay a high fee… I have had orginators try to strong arm me into taking loans that I feel that are not the best option for me. things has gotten so bad nowt hat my house has finally lost the opportunity for me to refi.. and all of this has occur in the last few months… I feel like I might be headed for foreclosure I am doing every thing I can not to as of 5/20/07 I have no lates and all is right yet this new increase that I will be getting every six months put me at risk of foreclosure there so much more to this …yet I have not a clue how to fix.. this…I have been studding real estate because I feel that because I lack knowledge I was seariously taking advantage of because of lack of knowledge… D
All this talk about getting help….Countrywide or Beneficial won’t help me and I’ve been disabled for six months unable to work. Have used all my savings up TRYING to keep up. You think they would work with me????? YES, if I pay all arrears NOW….thanks Countrywide…thanks Beneficial…
Hello,
My house is in foreclosure due to illness. I used to be a Union Carpenter/ work mule.
I’ve had Morgellon’s disease for about 4 years now. It’s worsened over time, but greatly over the last year and a half. I’m not able to work/make money, nor finish construction of my house. I’m trying to find help w/ healthcare and my home. I bought my house in 98 and would like to save from foreclosure, then sell more than likely. It is everything I stand for. Sweat, blood, & tears. I’d hate to have to walk away from it w/ nothing. Homelessness is coming soon.
I don’t know where to turn. Also, they recommend (online) not sleeping in hotels and not trying to sell or rent a home in which a person w/ morgellons disease carrier/ victim because there’s no cure. I feel as if I’m going to learn to be a hermit so as not to harm/affect others. I had to stop doing tatoos for fear that a customer get my disease.
Sincerely, I Thank-you,
Melissa H. Gilbert
PS I’ve enclosed house pictures.
Most people don’t realize that many Lenders will usually try to steer defaulted borrowers into whatever loan workout scenario that best suits their (or the investor’s) interests, not necessarily the borrowers! Mainly because borrowers have to “qualify” for any option resulting in the loan surviving (note Mods, repay/forebearance plans) and are expected to participate to the best of their financial abilities. And partly because lenders that service Freddie Mac & Fannie Mae loans get paid fees from these investors for completion of some “approved” workouts like Short Sales and Note Mods. Also, if your home has equity, their projections may indicate they won’t suffer a foreclosure loss, therefore, they have little incentive to assist (no loss to mitigate) and will simply tell you to try to sell it yourself while foreclosure progresses. If a 1st & 2nd mortgage exists, there are 2 debts to contend with, and if they are with different lenders, the 1st will try to beat down the 2nd lienholder to take the biggest loss on a short sale (time consuming, and often unequitable for the 2nd). Unless the 2nd agrees, it won’t happen, and the 2nd would also have to agree to any Note Modification (subordination) the 1st proposes (again, what’s in it for them?) A 2nds existence rules out a DIL (Deed-In-Lieu) unless they get paid $ to make it worthwhile to release their lein. If there’s MI (mortgage insurance) on the 1st, they also have to approve any workout that results in any loss (shortsale/DIL) because the lender will file a claim for loss;or capitalizes arrears to the principal balance (increases potential MI claim exposure in future). Regarding MI, lenders/investors rarely ask the MI companies to consider assisting with arrears by way of a “partial claim advance”, which can mitigate losses to all stakeholders for qualified borrowers. This is a creative workout method where the MI company pays some $ to cure the default and borrower signs a note to the MI company for as low as 0% interest and very lenient repay terms. If all works out, foreclosure is avoided, MI gets repaid over time, and future MI claim exposure remains intact. If it doesn’t work out and a future foreclosure is completed, the MI claim is still paid, less the amount of advance that hasn’t been repaid by borrower. Another issue is the foreclosure judgement. Much like a car repo & liquidation, a borrower can be held financially liable for a deficiency judgement resulting from foreclosure in many states. Also, lenders often forget to counsel borrowers in foreclosure that once its over and they send the IRS a 1099-C (C stands for “Charge Off’), the IRS considers the amount charged off as INCOME that the borrower owes taxes on (the IRS can & will hold up your income tax refund; and may freeze/sieze bank accounts).
The sad reality is that there is a shortfall of experienced Loan Workout reps in the mortgage banking industry, and the shortsightedness of the Lenders, Investors and the Private Mortgage Insurers is to blame. The art of negotiation is lost on today’s Loss Mitigation industry and their once creative flair has been boondoggled by worries of legal exposure in today’s litigous climate. The high volume of defaults has caught them all off guard (once again) and was easily forseeable (they’ve been thru this before in the late eighties, nineties, etc.) One would think they could quickly staff up for this, by tapping into the talent pool around the country via telecommuting. Loan Workout reps can be recruited to work from their homes (all they need is a phone, PC/Internet, and access to the lender’s systems). Another alternative that has worked in the past for the MI companies is to open up regional Loss Mitigation offices in FL, CA, and a few other hard hit areas. Of course, that would require proactive forward thinking, the likes of which haven’t been seen since CMAC/Radian closed down their regional offices back in ‘99.
I am a single mom who worked so hard to buy my home & due to helping a church member another single mom I got into this position she took me for every penny living in my home for free etc. I had to give up my well 10 year established childcare business from my home & went out into the world to work not only 1 but 3 jobs and still couldn’t never mind make my bills but catch up on what was behind. At this time I was 2 months behind on my mortg going on 3 and offered them 11/2 months and they wouldn’t accept it went on trying to work with them but they wanted alot more than I could give. So now I am in forclosure but not forclosed yet no set date. I had to borrow money to hire a lawyer a friend of the family for help and trying to pay him whar I can when I can ( in which he is not happy about) I don’t know what to do . Does anyone know if there is a program or any kind of help for my situation?? HELP!!!!!!!!!!
The Obama economic team has created more Frankenstein’s (i.e. loan modification experts, lawyer’s, predatory lenders etc) who continue to pound these people who face foreclosure day after day from ads on TV, Cable, Radio etc. This should be the bank’s job to do! Why do these people who are already broke & only looking to save their “primary-home” from foreclosure need to pay for outside help to save their home’s? This is what they got for voting for the man of CHANGE!
These primary use family homes could be saved by getting the bailed-out bank’s to reduce the interest to a fixed 4% and extend the terms (fixed)for 40 or 50 year’s if need be. Since the banks have all the paper work on these homeowners. It would be much easier for them to get the job done and it wouldn’t cost the taxpayer a single dime. Most of these loans would be fully- paid off way before 40 or 50 year’s due to death, relocation of familie’s, divorce etc.
Why don’t our democratic representatives of both Houses on the Hill in Washington D.C., put forth a referendum that either the FED is morphed (since both political parties are terrified any time someone utters the word Nationalization) into a government agency where at least the general public will have a voice in the decision making of the FED through their elected representatives or public advocate’s (elected by the people in a special election because of the severity of the foreclosure crisis) where they will have equal seats and voting power on the Federal Reserve Board.
As it stands now, the Federal Reserve Board cares only of bailing out the CEO’s of Wall Street and the banks.
Not the thousands of American families (that ACORN is doing their best to help) with children, the elderly and pets that will be left homeless due to the foreclosure of their primary homes.
Enough of bailing out Wall Street and the banks with our money from the FED and we have no say in it nor do the financial aristocrats at Wall street and the banks need to disclose to anyone (including Congress or the U.S. Senate) where this money is going. It’s time that we deep-six the FED for the sake of the working class people of our nation.