Why can’t I cash in money from my 401K and give it to a friend to buy my property which is in foreclosure with no sale date; then have the friend sign the deed back over to me?  What difference does it make if I know the buyer or if I don’t?

Wendy (more…)

I called Bank of America for one of my sellers today and learned that she qualifies for the $5,000 incentive program they are offering for Florida properties.  Can’t be a lot loan and certain investors are not participating.  In her case, she had a Freddie Mac loan so she was good to go.  If you have a Bank of America serviced loan and want to know if you qualify for the new program of $5,000 to $20,000 cash incentive to the seller at closing then the number at BofA to call is (877) 459-2852.

Of course, if the property is located in Pinellas, Hillsborough, Manatee, or Pasco counties then send me an email: paul @ brokencredit.com

You have a great website that educates and keeps people informed with valuable information. I have been reading it for over two yrs. Thanks and God Bless you.

Carlos

Hello Paul, 

Freddie Mac will require a $15k promissory note over 120 months at 0% interest = $125/month or $7500 cash contribution at closing instead of promissory note.  The loss to Freddie Mac is very large, so they will require one of these two things to consider approving this transaction.  Please let me know what the seller agree to so we can try and wrap this up.

Thanks,

Clueless Ken
Fifth Third Bank 
Homeowners Assistance Specialist (more…)

Banks have stepped up their actions against homeowners who have fallen behind on their mortgage payments, setting the stage for a fresh wave of foreclosures.

The number of U.S. homes that received an initial default notice — the first step in the foreclosure process — jumped 33% in August from July, foreclosure listing firm RealtyTrac said Thursday.

The rise represents a nine-month high and the biggest monthly gain in four years. The spike signals banks are starting to take swifter action against homeowners, nearly a year after processing issues led to a sharp slowdown in foreclosures.

“This is really the first time we’ve seen a significant increase in the number of new foreclosure actions,” said Rick Sharga, a senior vice president at RealtyTrac. “It’s still possible this is a blip, but I think it’s much more likely we’re seeing the beginning of a trend.” Foreclosure activity began to slow last fall after problems surfaced with how many lenders were handling foreclosure paperwork, namely several shortcuts known as robo-signing.

Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

Other factors have also worked to stall the pace of new foreclosures this year. The process has been held up by court delays in states where judges play a role in the foreclosure process, a possible settlement of government probes into the industry’s mortgage-lending practices, and lender reluctance to take back properties amid slowing home sales.

A pickup in foreclosure activity also means a potentially faster turnaround for the U.S. housing market. Experts say a revival isn’t likely as long as a glut of potential foreclosures hovers over the market.

Foreclosures weigh down home values and create uncertainty among would-be buyers who fret that prices may fall as more foreclosures hit the market. There are about 3.7 million more homes in some stage of foreclosure now than in a normal housing market, according to Citi analyst Josh Levin.

“This bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery,” Levin said in a client note this week.

Banks have been working through a backlog of properties that first entered the foreclosure process months, if not years ago. But the August increase in homes entering that process sets the stage for a host of new properties being targeted for foreclosure.

That’s bad news for homeowners accustomed to missing payments for months without the threat of foreclosure. In states such as New York and Florida, for instance, processing delays have helped some stay in their homes more than two years before banks got around to taking back their properties.

In all, 78,880 properties received a default notice in August. Despite the sharp rise from July, last month was still down 18% versus August last year and 44% below the peak set in April 2009, RealtyTrac said.

Some states, however, saw a much larger increase.

California saw a 55% jump in homes receiving a default notice last month. In Indiana they climbed 46%. In New Jersey, where last month a judged ruled that four major banks could resume uncontested foreclosure actions under court monitoring, homes getting a default notice rose 42%.

Despite the increase in new defaults, the number of homes scheduled for auction and those repossessed by banks slowed in August.

Lenders repossessed 64,813 properties last month, a drop of 4% from July and down 32% from a year earlier. Home repossessions peaked September last year at 102,134.

Banks are now on track to repossess some 800,000 homes this year, down from more than 1 million last year, Sharga said.

In all, 228,098 U.S. homes got a foreclosure-related notice last month, up 7% from July but down nearly 33% from a year ago. That’s one in every 570 U.S. households.

Nevada leads, with one in every 118 households receiving a foreclosure-related notice last month. Rounding out the top 10 states with the highest foreclosure rate in August are California, Arizona, Georgia, Idaho, Michigan, Florida, Illinois, Colorado and Utah.

Source=Investors.com

From MGIC’s Internal Loss Mitigation Manual, June 2011 Edition we learn the following with regards to ‘hardship’.

MGIC requires that you determine borrower hardship for certain loan workout options.  We define ‘hardship’ as the borrowers’ long-term inability to maintain mortgage payments due to circumstances beyond their control.

To determine hardship, conduct a thorough review of the borrowers’ financial information.

Here are some examples of how MGIC defines hardship:

• involuntary unemployment;
• involuntary relocation;
• divorce;
• reduction in income used to sustain mortgage debt that was beyond the borrowers’ control;
• serious illness, long-term incapacity or death of a co-borrower; AND
• call to active military duty.

702.06 Deficiency decree; common-law suit to recover deficiency.—In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound judicial discretion of the court, but the complainant shall also have the right to sue at common law to recover such deficiency, provided no suit at law to recover such deficiency shall be maintained against the original mortgagor in cases where the mortgage is for the purchase price of the property involved and where the original mortgagee becomes the purchaser thereof at foreclosure sale and also is granted a deficiency decree against the original mortgagor.

Florida Deficiency Judgment

NEW PORT RICHEY – Seventy-year-old Sharon Bullington may lose her home because she paid her mortgage a week early.

That may not make much sense to the thousands of homeowners who are behind on their mortgages in Florida. But it seems it does to Bank of America, which has filed to foreclose on Bullington and her husband, James, 78, who is terminally ill.

“It’s like death to me,” Sharon Bullington said, her voice quivering on the phone Friday. “My husband is bedridden. It’s almost more than I can bear.”

The couple moved to Florida 15 years ago after James Bullington retired from General Motors in Flint, Mich., and moved into the 1,591-square-foot New Port Richey home, which is now valued at $133,464, though they owe about $177,000.

When James became ill, the couple encountered financial difficulties because of high medical bills. The couple asked Bank of America to modify the loan.

There was a catch. The couple would have to first officially default on their $1,400-a-month payment. The couple did that and entered into the modification plan, which reduced their payment to $916.

Sharon Bullington made the January payment on Dec. 23, and the bank accepted the money, according to court records.

The next month, she made the February payment over the phone. Weeks later, the money had not been withdrawn from her bank account. After Bullington asked the bank about it, a representative told her she had punched in the wrong routing number. In March, the bank kicked the couple out of the modification plan. (more…)

Servicers completed 10,438 short sales through the government’s Home Affordable Foreclosure Alternatives program since it launched in April 2010, according to the Treasury Department.

HAFA was designed to provide an incentive to servicers for completing short sales and deeds-in-lieu of foreclosure for loans that fail out of the larger Home Affordable Modification Program. Through June, servicers started 21,412 short sales and DILs, up 20% from the month before. A total of 10,754 were completed, up 25%.

JPMorgan Chase (JPM: 36.03 0.00%) is the programs leading performer, completing nearly 3,600 through the program, including nearly 1,000 in June alone.

Wells Fargo (WFC: 24.55 0.00%) was second, completing more than 3,100 since the program launched and roughly 700 in June.

Bank of America (BAC: 7.40 0.00%) completed 1,873 HAFA transactions, an increase of roughly 200 in the month.

Pam Marron, a senior loan officer with Gold Start Mortgage Financial Group in Tampa Bay, Fla., said more and more homeowners in negative equity view a short sale as their only way out. Many, she said, are defaulting because banks require them to do so in order to qualify for a short sale.

“The growing problem in Florida is the alarming increase in the number of short sale listings that are coming onto the market. These people are still employed but severely underwater and are having to short sale because they are not able to pay the vast difference owed between the mortgage amount and the value of these homes,” Marron said. “Banks are requiring homeowners to default in order to qualify for the short sale.” (more…)

I cosigned for my 21 year old to buy a car.  She was late on her july payment and I didn’t find out until the underwriter repulled my credit prior to closing on a refinance of my mortgage.This is the only negative mark on my credit and it reduced my score by 40 points.  I never received a notice from ford regarding the late status.  They didn’t even have my phone number or address.  Is it fair reporting practices to forgive a one time late paysment which is the first one in 12 months? What is my option??

Tenika (more…)