January - March 2009
March 6, 2009 —
Mortgage ‘Cram-Down’ Bankruptcy Bill May Aid 1 Million in U.S.
At least 1 million Americans would be able to use bankruptcy to
reduce mortgage payments.
H.R. 11066 (Helping Families Save Their Homes in Bankruptcy Act 2009)
— the
“cram-down bill” — would allow federal judges to lengthen terms, cut
interest rates and reduce mortgage balances of bankrupt homeowners.
The bill also permanently increases the Federal Deposit Insurance
Corp.’s coverage of bank deposits to $250,000, provides mortgage
servicing companies legal protection to modify troubled loans, and
reshapes the $300 billion HOPE for Homeowners. Designed to refinance
400,000 borrowers facing foreclosure, this program has completed
about 25 loans since it began in October 2008. The changes to
the program would allow the Federal Housing Administration to help
25,000 borrowers over the next 10 years.
Faces of Foreclosure—Argy Tripodiss
The Tripodis family story illustrates why giving bankruptcy judges
the power to modify mortgages on primary residences can’t come too soon.
After a bankruptcy failed to keep the interest rate on their mortgage
from going up, they had to refinance into another adjustable rate loan
with increasing payments.
Opponents of bankruptcy reform are whiners
March 6, 2009 —
Fannie Mae Extends Eviction Suspension Through March 31
Fannie Mae extends the suspension of all eviction proceedings through
March 31, 2009 as it implements the Home Affordable Refinance and Home
Affordable Modification initiatives as part of the Obama
Administration's Making Home Affordable program. A foreclosure sale may
not occur on any Fannie Mae loan until the loan servicer verifies that
the borrower is ineligible for a Home Affordable Modification and all
other foreclosure prevention alternatives have been exhausted.
eFannieMae.com
contains materials for loan servicers, attorneys and others in the mortgage
industry. For example, its requirements for Eviction Halt Extension,
Announcement 09/05 are
here.
March 5, 2009 —
Freddie Mac Officially Launches REO Rental Initiative
For Tenants, Owner-Occupants After Foreclosure; Freddie Mac Continues
Suspension of Evictions Through April 1, 2009
Freddie Mac has launched its new REO Rental Initiative giving qualified
tenants and former owners the option to lease their recently foreclosed
properties on a month-to-month basis. The REO Rental Initiative will be
managed by HomeSteps®, Freddie Mac's national real estate unit, and
implemented through several national property management firms. It will
continue to suspend all eviction actions until April 1, 2009 to ensure
there is ample time for current occupants to learn about the options
available to them under the new initiative.
March 5, 2009 —
Freddie Mac Stops Foreclosure Sales On Loans Eligible
For New Obama Home Affordable Modification Program
Freddie Mac is suspending foreclosure sales on mortgages eligible for
the Home Affordable Modification Program as part of the Obama
Administration’s Making Home Affordable plan. Freddie Mac’s previously
announced suspension of foreclosure sales on occupied properties will
expire on March 6, 2009.
March 5, 2009 —
Obama’s Mortgage Plan
1. A refinancing program for people current on their mortgage, but with
less than 20% equity or upside down. These homeowners can have their
interest rates brought down to the market rate at the time of the
refinancing. The program is open only to homeowners with loans owned or
guaranteed by Fannie Mae and Freddie Mac. Borrowers who owe up to 5%
more than their home is worth can qualify. The homeowners must be
current on their loan.
2. A loan modification program for people delinquent (or current and
struggling to make their payments). This aims that to bring monthly
payments to 31% of income. Lenders may also lower the principal owed by
the borrower or stop charging interest on a portion of the loan, known
as principal forbearance. The loan must have originated on or before
Jan. 1, 2009. The property must be owner-occupied, and the principal
balance cannot exceed $729,750. The program also requires the borrower
to document income and sign an affidavit of financial hardship. The
modification can occur between now and December 2012.
The biggest mortgage-servicing companies, overseeing two-thirds of all
home loans in the country — Citigroup, JPMorgan Chase, Bank of America
and Wells Fargo — are expected to participate in the plan.
Any bank that receives additional U.S. government money under the
Treasury Department's $700 billion financial rescue program will be
required to take part. Many lenders are expected to participate
voluntarily, because the government would be absorbing much of the cost
of resolving their bad loans.
Obama Housing Plan: What You Need to Know
Whether Unlucky or Unwise, Some Borrowers Are Left Out The Obama Plan
doesn’t help borrowers who have seen their income decline
drastically or who owe more than their home's value on loans over
$729,750. In about 10 million places such as Las Vegas, Phoenix, and
California values have plunged as much as 40%; the plan still leaves
many in homes they cannot afford.
March 3, 2009 —
Citi Expands Homeowner Assistance Program to Help
Recently Unemployed Borrowers Stay in Their Homes
Homeowner Unemployment Assist is a new initiative that will help
recently unemployed, delinquent CitiMortgage customers stay in their
homes by paying a reduced monthly mortgage payment for three months.
It’s a new component of Citi Homeowner Assistance, the company's
multi-faceted program to help people avoid foreclosure and stay in their
homes.
February 27, 2009 —
AB 1160 (Fong) – Mortgage Contracts: translation
Provides that if a mortgage loan is negotiated in language other than
English, then a translated summary of the key terms of the loan must be
provided to the borrower in the language that the loan was negotiated in
prior to execution of the mortgage loan contract.
Current law only applies to loans originated by brokers; it does not
cover banks, credit unions or residential mortgage lenders.
February 26, 2009 —
“Produce the Note” Buys Homeowners Time
Consumer Warning Network discusses this strategy and provides templates
for a legal document request, a letter to your lender and a motion to
compel to help consumers through the process. Find more articles
here.
How to use “Produce the Note” in Non-judicial Foreclosure States (California)
Where’s The Note, Who’s The Holder: Enforcement of Promissory Note Secured By
Real Estate
(See Resources)
February 20, 2009 —
California Foreclosure Prevention Act
Effective 5/22/09, SB2X-7 and AB2X-7 requires lenders to wait an
additional 90 days from the filing date of a notice of default before
the trustee can give notice of sale in a non-judicial foreclosure in
effect creating a six-month waiting period. This extended waiting period
is intended to encourage lenders to work with their borrowers and enter
into loan modifications.
The moratorium applies only if several requirements are met including:
the owner occupied first loan was recorded against residential real
property between 1/1/03 and 1/1/08; the loan is serviced by a loan
servicer that has not implemented a "comprehensive loan modification
program"; imposing such moratorium will not "require a servicer to
violate contractual agreements for investor-owned loans."
For a legal analysis of the Act, go
here.
February 4, 2009 —
Facing foreclosure? Don't leave. Squat
In Michigan, Wayne County Sheriff Warren Evans announced that he won’t
enforce sales of foreclosed homes. And in Ohio, Rep. Marcy Kaptur is
encouraging homeowners facing foreclosures to stay in their homes.
February 2, 2009 —
Ethics Alert: Legal Services to Distressed Homeowners
and Foreclosure Consultants on Loan Modifications California Committee
on Professional Responsibility and Conduct
(PDF)
This Ethics Alert outlines ethics rules that may apply when a
foreclosure consultant or another non-lawyer requests assistance from a
lawyer and/or refers potential distressed homeowner clients to the
lawyer. It also cites to California law prohibiting foreclosure
consultants from collecting a fee before any services have been
rendered.
Jan. 22, 2009 —
Rep. Maxine Waters Dials and Redials Attempting to Get
Help for Constituents On Hold: Even Congresswoman Gets the Runaround on
Bank Help Lines
Sound familiar? ABC News Nightline cameras were rolling as Congresswoman
Maxine Waters (D-Ca.) was repeatedly put on hold for long stretches,
disconnected, transferred to extensions that did not work and ultimately
switched to a recording which directed her to the bank's website. ABC
News investigation found that the process of reaching out for help can
be disorganized and frustrating, hardly consumer friendly, even when a
prominent member of Congress is on the line.
January 22, 2009 —
Foreclosure Fightback
Community-based movements are working to halt the flood of foreclosures
throughout the country including California whose foreclosure rate is
more than twice the national average. San Diego, Stockton, Vallejo,
Antioch, in churches, union halls and community centers, angry
homeowners have been organizing to freeze foreclosures and impose a
systematic modification of home loans. This article by Ben Ehrenreich
(son of Barbara) focuses on Faith Bautista who runs the Mabuhay Alliance
in San Diego.
January 18, 2009 —
US Supreme Court to hear Cuomo v. The Clearing House Ass’n, L.L.C.
The Supreme Court granted cert. to decide whether states have the power
to enforce their own anti-discrimination lending laws against national
banks. The federal Office of the Comptroller of the Currency sued to
stop New York Attorney General Andrew Cuomo’s investigation of several
national banks — including J.P. Morgan Chase, Wells Fargo and Citigroup
– on the grounds that only federal regulators have the power to
investigate national banks.
Find all papers, opinions and briefs with arguments about the
discriminatory angle on predatory lending and the mortgage melt down at
the
SCOTUS Wiki.
January 12, 2009 —
Barney’s Great Adventure — The most outspoken man in
the House gets some real power.
Read Jeffrey Toobin’s profile of Congressman Barney Frank and his work
on the banking and housing crisis,
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