delinquent | Black & LoBello

What Will Replace Fannie and Freddie?

On November 8, 2010, in Finance, Legislation, Mortgage, by blacklobellolaw

With the recent election results and the increase in Republican politicians promising to abolish Fannie Mae and Freddie Mac, the topic of what will replace these government sponsored entities is being discussed now more than ever. Fannie and Freddie have been in a state of uncertainty since the government seizure but a recent Wall Street Journal article appropriately asked what would replace them.

Fannie and Freddie played key roles in the prevalence of 30-year fixed rate mortgages by purchasing these loans from banks who liked to have them off their books. Fannie and Freddie guaranteed the loans the loans they purchased and sold them to investors as securities. According to a recent report by Standard & Poor’s, however, the cost to rescue Fannie and Freddie could reach $280 billion. The cash necessary to keep Fannie and Freddie active does not compare to the projected $400 billion in capitalization that would be required for any entities replacing these two failing entities.

Mortgage investors, industry groups, and academics are currently putting their support behind government insurance for mortgages. Treasury Secretary Geithner supports a limited, but explicit, guarantee. Conversely, Representative Jeb Hensarling (R., Texas), disagrees stating that he did not see the reason for continued government guarantees and the use of 30-year fixed mortgages. Furthermore, Hensarling pointed out that other countries have succeeded in producing high-homeownership rates without government guarantees. Many other Republicans call for complete privatization of the housing-finance industry.

Joshua D. Carlson, Esq.

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Tagged with: 30 • bank • Black & LoBello • co-debtors • co-signers • creditors • delinquent • Fannie Mae • foreclosure • Freddie Mac • Geithner • Hensarling • Journal • Las Vegas • lender • loans • loss • mitigation • mortgages • Nevada • owned • properties • Republicans • sale • short • Standard & Poor's • Texas • Wall Street • year fixed

Nationwide joint investigation could make banks subject to fines

On October 14, 2010, in Corporate, Finance, Legislation, Mortgage, Real Estate, Short Sale, Strategic Default, by blacklobellolaw

A joint investigation by every state and the District of Columbia could force mortgage companies to settle allegations that they used flawed documents to foreclose on hundreds of thousands of homeowners. To read the full article please click this link.

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Tagged with: Ally Financial • attorney general • bank • Bank of America • Black & LoBello • Chase • co-debtors • co-signers • creditors • delinquent • Fannie Mae • foreclosure • Freddie Mac • GMAC • JPMorgan • Las Vegas • lender • loans • loss • Masto • mitigation • Nevada • owned • properties • sale • short • Wells Fargo

Map and Directions to the Town Hall Meeting THIS Weekend

On September 21, 2010, in Mortgage, Real Estate, Short Sale, Strategic Default, by blacklobellolaw

Don’t miss this weekend’s FREE Town Hall meeting hosted by Prudential Americana features experts from various fields related to the Real Estate market to answer YOUR questions. This meeting will be on September 25, 2010 at 10:00 AM located at Green Valley Ranch, Conference Room La Sirena IV. Please submit any questions you would like to have answered at this very important meeting through Twitter or our Facebook Discussions Tab.

Directions and Map:

Click here for a MAP of the Green Valley Ranch ground floor. Take the I-215 to Green Valley Parkway. Exit South and turn right at Paseo Verde. Turn right at Carnegie and follow the signs to Hotel Registration (Valet Parking). Once parked, simply ask a valet attendant to direct you to the La Sirena IV ballroom.

Tagged with: Affordable • Black & LoBello • co-debtors • co-signers • creditors • deed • delinquent • Fitch • foreclosure • HAMP • home • Las Vegas • lender • lieu • loss • Making • mitigation • Nevada • Program • Ratings • sale • short

Update on the U.S. Real Estate Market

On September 20, 2010, in Finance, Mortgage, Real Estate, Short Sale, Strategic Default, by blacklobellolaw

At the end of August, Lender Processing Services (LPS) reported that mortgages on 4,947,000 properties nationwide were at least 30 days past due but NOT in foreclosure. Of those, 2,374,000 were 90 or more days delinquent. The good news is that the delinquency rate of loans that are 30 days or more past due have declined one percent since last month and 5.1 percent since this time last year.

Even with the high number of delinquencies, the number of bank-owned properties has fallen steadily over the past year. There are several possible reasons for the lack of bank-owned properties even with the near record-high delinquency rates. First, a portion of the delinquent loans ends up being permanently modified. Second, banks are approving short sales with greater regularity even though the short sale process is still filled with frustration and confusion. Lastly, when foreclosures do occur, more investors are buying properties at foreclosure sales preventing these properties from ending up as REO.

Currently, Fannie Mae and Freddie Mac make up a large majority of foreclosure listings. Fannie and Freddie have already taken back nearly as many homes in the first half of the year as they did all of last year. As of June 2010, they owned more than 191,000 homes which is nearly double the total from 2009.

Joshua D. Carlson, Esq.

Tagged with: bank • Black & LoBello • co-debtors • co-signers • creditors • delinquent • Fannie Mae • foreclosure • Freddie Mac • Las Vegas • lender • loans • loss • LPS • mitigation • Nevada • owned • properties • sale • short

Nearly 4 Million Homeowners 60+ Days Late on Mortgages

On August 31, 2010, in Estate Planning, Finance, Mortgage, Real Estate, Short Sale, by blacklobellolaw

The phrase “Delinquent Mortgage,” once a foreign concept for many Americans, has now become part of our everyday vernacular. When nearly 4 million homeowners are currently 60 or more days behind on their mortgages, it is actually no surprise that citizens nationwide are buzzing about the housing crisis. That crisis is worse here in Las Vegas than it is in many other areas of the country and Las Vegas citizens are certainly feeling the economic pinch.

More than 60 percent of homeowners nationwide who have seriously delinquent loans are still not involved in any form of loss mitigation with their lenders, probably due to the frustration with the processes available. In fact, a recent performance report indicates that nearly half of the property owners approved for trial loan modifications have fallen out of the program. By the end of July 2010, approximately 616,839 out of the total of 1,307,489 HAMP three-month trial plans have been cancelled since the program began. This tremendous dropout rate may be due to the lengthy process of obtaining a permanent modification. For instance, as a result of the backlog, only 36,695 HAMP restructurings were converted to permanent status during the month of July.

For those who are already involved in loan modifications or short sales, the process may soon become even more difficult and time consuming as Fannie Mae and Freddie Mac have become more aggressive in forcing originating lenders to buy back bad loans. A report by Fitch Ratings illustrates that, in a worst-case scenario, the buybacks may result in a combined loss of between $17 billion and $42 billion for the nation’s four largest banks – Bank of America, JPMorgan Chase, Wells Fargo, and Citi. Considering these numbers, it is safe to assume that the process will become even more tedious.

Despite homeowners’ understandable frustrations with the short sale and loan modification processes, these avenues may preserve some homeowners’ rights down the road. For example, if a lender tries to pursue a deficiency judgment following a foreclosure, the homeowner has the ability to demonstrate efforts to work with the lender to mitigate losses. It is hopeful that the courts will not turn a blind eye to these whole-hearted attempts. As such, underwater homeowners should become informed, seek assistance from a legitimate source, and do their best to stay patient.

Kelle L. Kuebler, Attorney*

*Licensed only in New York and Connecticut

Tagged with: Affordable • Black & LoBello • co-debtors • co-signers • creditors • delinquent • Fitch • foreclosure • HAMP • home • Las Vegas • lender • loss • Making • mitigation • Nevada • Program • Ratings

New HAMP Guidelines Take Effect June 1, 2010

On May 26, 2010, in Bankruptcy, Mortgage, Real Estate, by blacklobellolaw

The federal government provided new Home Affordable Modification Program (HAMP) outreach and communication guidelines for foreclosure actions while evaluating the borrower. These guidelines provide additional protection for delinquent borrowers who have filed bankruptcy but would otherwise be eligible for HAMP benefits. Some key highlights from the directive include:

FORECLOSURE

The servicer must evaluate the borrower’s eligibility under HAMP and determine ineligibility before referring the borrower to foreclosure (or make “reasonable solicitation efforts”).
If foreclosure activity has already been initiated, the foreclosure sale cannot occur until after the servicer determines if the borrower is ineligible under HAMP (or makes “reasonable solicitation efforts”).
The servicer must give the borrower 30 days to respond to HAMP “Non-Approval Notices” in certain circumstances before conducting the foreclosure sale.
The servicer must provide, in writing, to the foreclosure attorney certification that the borrower is ineligible for HAMP before conducting the foreclosure sale.

BANKRUPTCY

A borrower in active Chapter 7 or Chapter 13 bankruptcy or the borrower’s attorney or bankruptcy trustee can request the servicer to consider the borrower under HAMP. The servicer can no longer decline the borrower as a “proper exercise of discretion.”
If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer may not deny the borrower a permanent modification simply for filing bankruptcy.
If a delinquent borrower has a discharged Chapter 7 and chooses not to reaffirm, the first lien mortgage debt is still eligible under HAMP with the following provision added to the permanent modification agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the loan documents. Based on this representation, the lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Homeowners struggling to make mortgage payments or feeling their lender or servicer has not worked with them on a loan modification should call a bankruptcy attorney. For a copy of the full disclosure, see Supplemental Directive 10-02.