Tag Archives: loan mods

Luxury Homes Foreclosure Trend

Luxury Homes Foreclosure Trend

Luxury Homes Foreclosure Trend

Luxury homes continue to foreclose at a record rate.

Even though pundits say that the economy continues to gain more traction and that the worst of the real estate crisis may be over, distressed properties continue to pop up in the Bay Area.

Inventory continues to be in short supply and experts say that we have 4-5 years (we’ve heard up to 10-12 years) left of REOs coming on the market. Unlike the past years, the upcoming REOs tend to skew toward the high end. Homes valued in the $1.5 million-plus range continue to climb in the foreclosure scene. For a couple of examples, a $2.5 million home recently foreclosed in Cow Hollow and likewise for a $1.8 million home in Hillsborough.

Folks over at RealtyTrac state that foreclosure activity on homes in the $5 million-plus value range jumped 61 percent from the same time period in 2012. During the real estate meltdown, high end homes certainly did see their share of REO casualties but banks often held off foreclosing because of the high losses. Instead the banks worked toward loan modifications, forbearances and short sales.

Now with values on the rise, many luxury homes have fallen into the foreclosure track. In the past, banks often hesitated at foreclosing due to possible high losses. Now, banks may take more chances to foreclose on the high ticket homes. With increased profits, banks with defaulting loans seem more willing to roll the dice on the luxury inventory. Such actions may end up signifying snake eyes for distressed high end homeowners.

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Filed under Banks, California, Foreclosure, Loan Modifications, short sales

Adjusting Loan Modifications Will Hit In 2014

Adjusting Loan Modifications Will Hit In 2014

Adjusting Loan Modifications Will Hit In 2014

Homeowners May Face Adjusting Loan Mod Rates Beginning In 2014

With distressed Bay Area properties going the way of affordable rent, and prices in most areas still on the rise (or at least steady) most homeowners and others interested in real estate think that we have seen the last wave of distressed properties in our collective rear view mirrors.

Like the mirrors in a funhouse, the real estate view may be slightly distorted or even downright scary. Despite the fact that the economy in the hilly city and as well as Silicon Valley, Marin, etc continues to display robust numbers, many people overlook the scary loan mod adjustment monster that looms on the horizon.

Those with short memories will need a refresher to remember that not only did the real estate crisis start about 2009 but so did the loan modification craze. While many homeowners received 30 or 40 year fixed loan mods, many homeowners received five year loan mods, meaning that they adjust after five years. These adjustments will mean that many homeowners will not be able to afford the adjusted monthly payment.

We have spoken with many homeowners who have these loan mods that will begin adjusting in 2014. Many of these homeowners can see the writing on the wall. Most will not be able to pay the adjusting amount which will put them in awkward positions. Either underwater or with equity, these homeowners may not be able to pay their new adjusted mortgage.

Re-modifying Adjusting Loans

Can homeowners return to the bank for another loan mod? Banks have not been in the habit of re-modifying loans so that may not be an option. Unfortunately, these homes may be future examples of distressed equity sales.

Some prognosticators think that we may be in store for 11 more years of short sales, foreclosures, loan mods and the distressed properties. That may be a bit of a stretch however it may likely continue for at least five years.

Homeowners with soon to be adjusting loan modifications (2014, 2015) take note. Be proactive. Create a game plan for your home or investment property instead of waiting until the loan modification adjusts. Doing so will allow you to look yourself in the mirror and know that you did the right thing.

Anyone with question about how to approach their adjusting loan mod can feel free to contact me at keith@resourcerock.com.

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Filed under Banks, California, Loan Modifications, Mortgages, San Francisco

CA Homeowners Have More Power Against Banks Thanks To Homeowner Bill Of Rights

CA Homeowners Have More Power Against Banks Thanks To Homeowners Bill Of Rights

CA Homeowners Have More Power Against Banks Thanks To Homeowners Bill Of Rights

Homeowner Take On Banks In Court For Dual Tracking And Foreclosing

When the California Homeowner Bill of Rights came into effect in January of this year, many advocates cheered, and of course the banks were not so pleased. Even though the law took effect few people saw any immediate effects. We heard from several non-profit counselors and homeowners that banks continued to dual track homeowners, offer multiple points of contact and break the terms of the law.

The California Homeowner Bill of Rights offers protection for the homeowners but what options do homeowners have if the banks don’t comply? Take it to the courts. In the past, homeowners didn’t have many options if banks dual tracked then foreclosed. Even if you could find an attorney to take the case, many judges would throw the case out. One of our attorney colleagues mentioned recently that in the past Contra Costa judges had been particularly reticent to halt foreclosures or entertain dual tracking cases but with the new law things have changed.

One story (see link) tells the story of a San Luis Obispo County couple who came out victorious in a million-dollar-plus settlement against OneWest Bank, IndyMac Mortgage Services, U.S. Bank and GSR Loan Mortgage Trust after the servicer foreclosed on their home and a rental property while the couple negotiated a loan settlement with the servicer. People often refer to this practice as “dual tracking”.

Attorney Specializing in CA Homeowner Bill of Rights Will Speak at the San Francisco Housing Expo

This case and a few others will now doubt offer homeowners a better opportunity to take on the banks for wrongdoings as part of the Homeowner Bill of Rights.

One attorney specializing in the California Homeowner Bill of Rights will be speaking at the San Francisco Housing Expo October 26.

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Filed under Banks, California, Events, Foreclosure, Loan Modifications, San Francisco

Bank of America Lied to Homeowners and Rewarded Foreclosures Says Former Employees

Bank of America Lied to Homeowners and Rewarded Foreclosures Says Former Employees

Bank of America Lied to Homeowners and Rewarded Foreclosures Says Former Employees

Homeowners Denied HAMP Loan Modifications

In the midst of an improving real estate market and a downturn in distressed homeowners, Bank of America received another black eye in its handling of distressed homeowner files.

According to several former Bank of America employees, Bank of America employees regularly lied to homeowners seeking loan modifications, denied applications for made-up reasons and received rewards including bonuses and gift cards for sending homeowners to foreclosure.

The former employees, who ranged from customer service to managers, gave statements as part of a class action lawsuit brought on behalf of homeowners who sought to avoid foreclosure through the Home Affordable Modification Program (HAMP) but were purposely bungled by B of A employees.

Bank of America issued statements denying the statements and stated that the truth would come out in the court trial.

An Onslaught Of Loan Modifications In 2009

When the HAMP program debuted in 2009, Bank of America had significantly more eligible homeowners than the next largest bank. As a result of this onslaught of loan modification requests, the former employees mentioned that the bank often misled them and denied applications for bogus reasons.

One recent study reported that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.

Read the former employee statements at ProPublica.org.

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Filed under Banks, Foreclosure, Loan Modifications

Application Deadline for the Making Home Affordable Program Extended

Application Deadline for the Making Home Affordable Program Extended

Application Deadline for the Making Home Affordable Program Extended

Extension through December 2015 Will Provide Struggling Homeowners Additional Time to Access Sustainable Mortgage Relief

Like so many of the other homeowner programs (e.g. The Mortgage Debt Forgiveness Relief Act) the HAMP program recently got the green light for an extension. The HAMP extension runs until December 31, 2015. The program was set to expire on December 31, 2013.

The good aspect of the extension is that the extension includes Fannie and Freddie, not just Treasury, and that they set the extension for more than one year.

Despite the fact that banks continue to push away from loan modifications and more toward short sales and deed-in-lieus, homeowners in distress can take some solace in the fact that this opportunity still exists for them to save their home and create a more sustainable situation.

Re-default Rates On Loan Modification Decline

Since its launch in March 2009, about 1.6 people have gone through the loan modification program and nearly 1.3 million homeowners have been helped directly by the program.

Consider that the re-default rate on loan modification looms high.

Some of the loans that never should have been made saw high re-default rates of modifications. Look at the re-default rates for loan mods made in the first quarter of 2009, and those numbers show re-default rates in the range of 85 percent to 90 percent.

However, things continue to improve. Modifications made more recently, such as in early 2011, show improved performance with average re-defaults after 12 months approaching 40 percent to 45 percent.

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Filed under Banks, Foreclosure, Loan Modifications, Mortgages, short sales

Extension of the Mortgage Debt Forgiveness Act But Not For California….Yet

Extension of the Mortgage Debt Forgiveness Act But Not For California....Yet

Extension of the Mortgage Debt Forgiveness Act But Not For California….Yet

Extension Of Act Now Set To Expire January 1, 2014

While pundits in Washington DC debated about who won and lost in the recent government “fiscal cliff” negotiations, Bay Area homeowners scored a victory. Congress extended the much-needed Mortgage Forgiveness Debt Relief Act until January 1, 2014. The law initially expired on December 31, 2012.

California Senate Bill 30 Addresses Extension Of State Tax Law

While the federal government extended the tax relief for one year, California still has not extended the state tax law. Fortunately, Senate Bill 30 is making its way through the California State Senate. This much-needed bill would offer one additional year exempt the taxation of mortgage debt (sometimes known as “phantom income”) that is forgiven when homeowners and their mortgage lenders negotiate a short sale or loan modification.

This important topic will be one of the key issues discussed at the free Underwater Homeowners Forum Thursday January 17th from 6-8 p.m. at 1100 Park Place ‘Lobby’ San Mateo CA, 94403. The forum takes place every 3rd Thursday through 2013.

Homeowners interested may register at Bayarearesource.com or call 415-578-7488 and choose option 2.

Homeowners who cannot attend can view via live video streaming and achieves.

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Independent Foreclosure Review Deadline Looms and Underwater Homeowner Panel Today

Independent Foreclosure Review Deadline Looms and Underwater Homeowner Panel Today

Independent Foreclosure Review Deadline Looms and Underwater Homeowner Panel Today

Independent Foreclosure Review Expires December 31, 2012

With much of the focus on the expiration of the Mortgage Debt Forgiveness Relief Act many homeowners have forgotten (or ignored) the upcoming conclusion of the Independent Foreclosure Review.

Although the program has been in effect for some time, few people have taken the opportunity to apply. For those unaware of the program, homeowners who suffered through a foreclosure or incurred some negative action on their home can submit their case to the Office of the Comptroller of the Currency (OCC) for an independent third party review of the circumstances and practices surrounding the foreclosure, loan modification denial, etc.

Many people either have not heard about the review or have simply ignored the opportunity. Many homeowners report that they do not trust the system or feel that the review will not benefit them. The fact is that some people have received compensation as a result of the review however the numbers remain relatively few.

ForeclosureHelpSCC has put a petition on Change.Org, requesting that the Federal Reserve, OCC, and Office of Thrift Supervision postpone the deadline for applying for the review until two months after at least 215,000 homeowners have heard about the results of their cases.

Over 800,000 Homeowners Should Have Qualified For HAMP

A report released in November found that an additional 800,000 homeowners should have qualified for HAMP but didn’t because some of the large banks/servicers did not perform modifications at the same rate as their peers.

Speaking of HAMP, the Bay Area Resource Underwater Panel Event will take place tonight in San Mateo and via video stream. Anyone seeking info about the Mortgage Debt Forgiveness Relief Act, California Homeowners Bill of Rights, and the Independent Foreclosure Review or to figure out some options of what to with their underwater home should attend this free event.

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Filed under Events, Foreclosure, Loan Modifications, Mortgages, San Mateo county