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Showing posts with label mortgage modification. Show all posts
Showing posts with label mortgage modification. Show all posts

September 17, 2012

A Bill of Rights...For Homeowners?

Hi Folks,
   I hope everyone had a great weekend, and welcome back!

   It had to happen. We knew it was coming. We didn't know how, or when, however, we do know what it is, from whom, and why! It started with our "Bill of Rights" here in the United States a few hundred years back. Fast forward those few hundred years, and we have seen the creation of a different Bill of Rights for Airline Passengers. And on January 1, 2013, the "Homeowner Bill of Rights" takes effect in the state of California.

   The legislation was actually passed in July, however, this "landmark law", as it's been referred to, is making a big splash from coast-to-coast. Emerging from the dust and ashes of the "Robosigning" scandal, as well as the vulnerability of homeowners during the mortgage modification and foreclosure process, this Bill of Rights is actually a "series of bills enacted to protect California homeowners", to which the California Attorney General Kamala Harris said, "will give struggling homeowners a fighting shot to keep their home" (as per a recent story by Barry Paperno on Credit.com).

   In terms of lenders and loan servicers, the Bill of Rights imposes requirements on them, such as prohibiting “dual track” foreclosures (simultaneous foreclosure process and loan modification negotiation with the servicer), guaranteeing a single point of contact from the lender/servicer "for a borrower with a loan modification application pending", writes Paperno. Additionally, banks will need to be much clearer in explaining a rejected loan modification to a borrower, and similarly, allows borrowers to sue lenders for "significant, material violations” of the law, writes Paperno. The Robosigning fiasco was also addressed in the requirement that servicers "document their right to foreclose and imposes fines of $7,500 per loan on fraudulently signed mortgage documents".

   These sound like some great components, however, as Paperno writes, consumer advocate critics of the bill have charged that "only first-lien mortgages for owner-occupants apply", that by first taking effect in 2013, "hundreds of thousands of troubled homeowners won’t benefit from these protections". Additionally, additional criticism included the lack of obligation by servicers to "consider applications for loan modifications or appeals before January 1, 2013."

   "Opposition to the Homeowner Bill of Rights was mounted by the large banks, the California Chamber of Commerce, title companies, real estate agents, trustees and securities industry representatives", writes Paperno.

   There may be some minor drawbacks, and there may be some tweaks needed, however, this looks like a solid piece of legislation in a state that has been pummeled by Foreclosures, and these new laws could have been quite helpful all along. Will they start sprouting up in other State Legislatures? I certainly believe so, but help is needed now in states such as Arizona, Nevada, Florida, and many more. How soon do you think these and the other states will see light at the end of the tunnel?

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Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
Rent to Own Homes and Real Estate Blog for HomeRun Homes: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #Homeowners #BillofRights #California #Robosigning #mortgagemodification #foreclosureprocess #loanservicer #lender #borrower #firstlien

March 14, 2011

HAMP, HPF, GMAC...Working For You or Against You?

Hi Folks,

   Hope you had a great weekend, and as always, ecstatic to have you back with me here today.

   Let me first preface this Blog post with a, "This is Just the Facts" disclaimer...it is not politicized, but just based on facts from a recent story titles, "Former Subprime Lender Runs Key HAMP Program", by Elizabeth MacDonald for FoxBusiness, which details, "Conflicts of interest accusations against a key player in the Treasury Dept.'s heavily criticized, $46 billion "Home Affordable Modification Program," or HAMP."

   As you may already know, the HAMP was launched in February 2009, with the administration, "vowing that it would stop foreclosures for three million to four million distressed homeowners." The HPF, or The Homeownership Preservation Foundation, provides free foreclosure counseling over a toll-free foreclosure prevention line.

   Now, as the story says, the chairman of HPF, Bruce Paradis, is the former chief executive of the failed big subprime lender GMAC-Residential Capital (Rescap), which originated, "more than $65 billion in rotten loans during the height of the bubble, from 2004 to 2007.", and the received, "$17.2 billion in taxpayer money from Treasury’s Troubled Asset Relief Program, or TARP to re float its operations."

   As for HPF, they received a lot of money from mortgage industry players (Fannie Mae, American International Group (AIG), and the now defunct Countrywide Financial), and as the story says, HPF also got, "tens of thousands dollars more from Ocwen Loan Servicing, Chase Manhattan Mortgage, and Washington Mutual."

   "HPF’s hot line number is on every HAMP denial notice sent to borrowers rejected by the federal modification program, and it also “appears on 4,927 government Web sites,” and “ is prominently featured" by "40 top lenders” in their mortgage operations" HPF tells Fox Business.

   The question is asked; "How serious are these conflicts of interest charges?". Apparently, the controversy could give, "impetus to a growing movement in Congress pushing legislation to repeal HAMP." A group of Congressmen say that HAMP, "is a costly, abject government failure that has more to do with political atmospherics than mortgage modifications, only 500,000 permanent loan modifications done to date at great taxpayer cost, says Sen. Demint." Incidentally, "that's a fraction of the Administration’s stated goal of reaching up to four million."

   Criticizing HAMP for, Neil Barofsky, the Special Inspector General for the Treasury’s Troubled Asset Relief Program, criticized HAMP and says that "failed trial modifications often leave borrowers with more principal outstanding on their homes", adding there is "near universal agreement that the program has failed to meet its goals." Additionally, Sen. Coburn says in a statement that HAMP "has done nothing but string alone homeowners and increase their hardship." Some borrowers have seen their credit scores worse, and under HAMP, more mortgage modifications have failed than been successful.

   HPF strongly agrees that they have checks and balances to stop mortgage servicers from influencing the advice they give on the phone, and that they focus on, "ensuring that the homeowner knows the counselor is on their side, seeking the best possible resolution of their problem". "Staying neutral between borrowers and lenders who back the nonprofit seems to be uppermost on the minds of HPF officials.", say the story.

   The most important factor that was pointed out here, was that both HAMP and HPF are voluntary programs, and that "No government official can force a loan modification on any borrower, lender or servicer", and thus, the "bottom line here is, HPF, HAMP, Treasury or HUD cannot pressure servicers to modify loans."

   Overall, it is a mess of Red Tape, some of it intertwined and just mangled. Bureaucracy at work. Love it or hate it, America is America, and we always emerge stronger from anything hurled at us!

Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com