Starting September 7, 2010, the Federal Housing Administration (FHA) will offer a new refinance program to qualifying underwater homeowners. To be able to participate in the program you must be current on your home loan, your credit score must be 500 or above, and the home must constitute your primary residence. Further, all lien holders related to the property must agree to the refinance and agree to write off at least ten percent (10%) of the unpaid principal balance. As most borrowers know, lenders are loathed to write off any of the principal regardless of the possible incentives. The program does, however, offer more incentives beyond new FHA-insured mortgages. The program contemplates certain incentives for any second lien holders to provide a full or partial extinguishment of the lien. HUD says interested homeowners should contact their lenders to determine if they are eligible and whether or not their lender agrees to write down a portion of the unpaid principal. Keep in mind that the present loan must be a non-FHA loan.
Tisha Black Chernine, Esq.
As part of Operation Stolen Dreams, the government’s push against mortgage fraud, federal authorities investigated 1,215 criminal defendants allegedly responsible for more than $2.3 billion in losses and made 485 arrests. Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused on federal criminal cases as well as civil enforcement, recovering money for victims and increasing cooperation with state and local partners. The operation involved the FBI, U.S. attorneys’ offices, U.S. Trustee Program, HUD, Treasury, Federal Trade Commission, IRS, and many others.
In Las Vegas, 123 defendants were charged, convicted, or sentenced as a result of the operation. Most of the defendants worked in the local real estate industry including 30 loan officers, 24 real estate agents, 6 loan processors, 5 settlement agents, 4 mortgage brokers, 2 appraisers, and 1 builder. Those defendants are accused of engaging in hundreds of fraudulent transactions with “straw” buyers or people who use someone else’s name to buy a house. These transactions caused a gross total loss of more than $246 million.
Joshua D. Carlson, Esq.
If you are a homeowner who has received a home mortgage loan modification recently, chances are your lender offered you a three-month trial program. The three-month trial program is a creation of the Federal Government’s Making Homes Affordable Program (MHA). Homeowners are required to make a mortgage payment for three months in a row, normally on the first of each month. The homeowner must make the payments on-time and not miss a single one in order to qualify for a loan modification under the MHA Program. At the end of the three months, lenders consider the financial circumstances of the qualifying homeowners and may offer a loan modification. If the lender participates, the lender receives financial incentives from the government. However, the lender is not required to offer up a loan modification at the end of the three months.
Many homeowners have expressed concern because they are doing their part by paying the three monthly payments but the banks are not required to offer a reasonable loan modification even if the homeowner successfully completes the three-month trial program. In response, President Obama’s administration “kicked off” a new program on November 30, 2009, to help homeowners get a permanent loan modification after their three months of payments. The program is being administered by the Department of Housing and Urban Development (HUD).
The Home Affordable Modification Program (HAMP) has helped more than 650,000 homeowners. There are currently 375,000 homeowners in the three month trial program. This program is designed to make temporary assistance into permanent results.
Nevada homeowners should recall that if they are put into foreclosure on their residential Nevada home, they may use the Nevada Foreclosure Mediation Program to force the lender to negotiate in good faith. The homeowner may try to get into a HAMP loan modification in the mediation process. Using the mediation process can give a homeowner additional leverage when negotiating with a bank.
To view the government’s press release regarding the new campaign click here.
Carlos McDade, Esq.
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