Stop Foreclosure Answer

In early March the Obama Administration announced the Making Home Affordable Program. A major portion of this program deals with mortgage modifications.

The modification part of the program is impressive. It brings down the monthly mortgage payments of people facing foreclosure to 31% of their income. Many people who in the past would never have been able to save their homes will now be able to do so.

A major drawback of this part of the program is that it is too restrictive. It only covers first mortgages on primary residences. It does not cover many other types of mortgages.

The first is second mortgages. The Obama Administration has said that they are working on a plan to deal with second mortgages. This has not been released yet. The challenge is that the longer the delay the bigger the problem becomes.

It also does not cover mortgages on second homes or vacation property. Most of these are located in recreational areas. People will be less likely to save these from foreclosure. The home and property values in these areas will drop more drastically and take longer to recover.

Third – the modification program does not cover mortgages on investment properties. When these mortgages go into foreclosure, not only are the owners impacted but also the renters typically have to find a new place to live. Here again the impact on a local economy is huge.

I urge you to write to you congressman and senators and ask them to address the shortcomings of the Making Home Affordable Program. A plan needs to be developed to help people who are falling behind on all mortgages not only those on their primary residence. It needs to include second mortgages and mortgages on second homes, vacation homes and investment properties.

Please do this as quickly as possible.

Much Success,

Mark Elkins

From 2000 to 2006 some mortgage lenders and mortgage brokers frequently used deceptive and unlawful tactics when advertising and selling subprime mortgages.

They frequently targeted people who had issues with their credit and who could not qualify for a regular mortgage.  They fed on the dream these people had to own their own homes.

What were some of the tactics they used?

They offered people mortgages with significant financial risks without adequately explaining the risks to them.  Frequently these were adjustable rate mortgages where the interest rate and monthly payment were fixed for 2 to 3 years.

These people were not told how much the interest rate and payment would increase at the end of the 2 or 3 years.  They were not told that the interest rate and payment could adjust every 6 months or year from that point forward.

The fact the payment after the first 2 or 3 years would be significantly higher and it could continue to rise with each subsequent adjustment was never disclosed

Sometimes the mortgage lenders and mortgage brokers gave these people interest only mortgages while implying that they were regular mortgages where part of every payment went toward reducing the principal balance.

Sometimes the people were told that the interest rate was lower than the rate on their closing papers.  They were not informed that they did not have to accept this mortgage.  They ended up accepting the mortgage with this higher rate.

At times the mortgage they were given was an adjustable rate mortgage with several different payment options.  In all conversations with the mortgage lender or broker they were told that their payment would be a certain amount.  When they got their payment information, they learned that the payment they were initially quoted was indeed low.  However, it did not even cover the interest due on the mortgage.  Each month they paid that amount, the difference between that and the full amount of interest due would be added to their principal balance.  If they made that lower payment, they would owe more on the mortgage than the amount they originally borrowed.

They were given mortgages where the monthly payments were much higher than they could pay. In their conversations with the mortgage lender or broker, they were never told what the monthly payment would be.  They were never asked if they could handle that payment along with paying their other bills on a regular basis.

Any of these practices provide a basis for a lawyer to take action against a mortgage company and to start legal action to save a home from foreclosure.

If you were the victim of any of these tactics and are now facing foreclosure, contact a lawyer immediately.  Explain what happened and how you believe you were misled by the mortgage lender or broker that got your mortgage for you.

The sooner you act the more quickly you will see a resolution to your problem.

Much Success,

Mark Elkins

P. S. Check out my EBook at http://www.stopforeclosureanswer.com. It contains ideas for you to take charge of the foreclosure process and to keep your home – the home you always wanted and have worked so hard for.

Last week I saw this article about a foreclosure in California that I just had to share with you.  It highlights what not to do when your mortgage company starts to foreclose on your mortgage.  It also highlights how mortgage companies can mishandle foreclosures.

In June of 2008 Elba Coronado received a Notice of Default from her mortgage company, Countrywide Home Loans.  She was embarrassed that she was in that position.  She didn’t check with anyone.  She didn’t research what she could do about it.  She thought Countrywide had a right to take possession of her condo.  After all she was behind on her mortgage payments and didn’t see how she could catch up.  In August she moved out of her condo and into an apartment.

Sometime prior to this the attorneys general in several states filed legal action against Countrywide.  (One of these was the attorney general of California.)  The action they filed said that Countrywide was not treating people fairly when they were filing foreclosure actions against them.

To settle that legal action, Countrywide stopped the foreclosure process on many mortgages in these states. On these mortgages Countrywide agreed to work with the people to do loan modifications to help them save their homes.

One of the people whose mortgage was selected was Elba.

The only problem was that Countrywide never notified Elba that they had stopped the foreclosure proceedings.  Here there was a dispute about what actually happened.  Elba says that Countrywide never told her that they would work with her to modify her loan.  Countrywide claimed that Elba never told them that she had moved out.

One issue Elba has is that the reason she fell behind on her mortgage payments was that she had two jobs.  She lost one of these.  She believes that she does not make enough from the job she still has to pay even the reduced mortgage payment she may get from Countrywide.  Elba would like to keep her condo.  However, she does not see how she can.

Ever since last August Elba’s condo has been vacant.  Since Countrywide has not followed through on the foreclosure, she technically still owns the condo.  No one has maintained the property.  Elba owes all of the back taxes due on it.

One other item – Elba did not get her mortgage through Countrywide when she bought the condo.  She got it through Accredited Home Lenders.  They were a subprime mortgage company.

Although the article does not indicate what, if any, action Elba took to try to save her condo, it looks like she gave up as soon as she got the Notice of Default.  It does not look like she consulted a lawyer or an expert skilled in helping people facing foreclosures save their homes.

If she had consulted a lawyer, the lawyer could have looked to see if Elba’s original mortgage company, Accredited Home Lenders, made any mistakes at closing which would nullify the terms of the mortgage.  If they did, the lawyer may have been able to negotiate a lower monthly mortgage payment which Elba could have paid.  This payment may have been much lower than the payment Countrywide had offered her.

If Accredited Home Lenders made no legal mistakes at the original closing, the lawyer or an expert in the field could have negotiated a modification to the mortgage which may have helped Elba save her condo.  Her again this may have been lower than the payment Countrywide offered her.

I also want you to look at how Countrywide messed up here.  As part of a settlement of a legal action they had to stop the foreclosure process on many mortgage and offer modifications.   Elba’s mortgage was selected.  I am sure that you would agree with me.  Countrywide’s handling of her case left much to be desired.

Countrywide did not notify her properly.  They did not even know that she had moved out of the condo.  They made no attempt to track her down.

In the settlement with the attorneys general, Countrywide agreed to modify 400,000 mortgages.  These totaled $8.68 billion.

How many other people in the same situation like Elba did Countrywide fail to notify properly?

If you are facing foreclosure and have a mortgage through Countrywide, run – don’t walk – to a lawyer or an expert skilled in helping people in your situation as soon as possible.  You don’t want to be victimized the way Elba was.

Even if you have a mortgage company other than Countrywide, mistakes like this can happen.  The entire system is backlogged with foreclosures.  Right now mortgage companies are not properly staffed to handle the volume.  They are making all types of errors.

Much Success,

Mark Elkins

I don’t know if you saw it.  If you haven’t, please sit down as you read this.  This is truly devastating.

Last week some startling statistics came out.  175,199 homes were lost to foreclosure in March.  This was a new monthly record. 

In the first 3 months of this year, lenders have taken over nearly 370,000 homes.  That was an increase of 76% over the total in the first quarter of 2008. That was also the highest quarterly total of completed foreclosures since this current foreclosure crisis started.

There were also more than 600,000 pre-foreclosure filings in the first quarter of 2009.  A pre-foreclosure filing is the first step leading to foreclosure.  This is also the most in any quarter since this crisis started.

What was the major reason for the increase?  Many of the lenders had had a moratorium on foreclosure action while they waited for the government to finalize what steps it wanted lenders to take to help homeowners save their homes.  The government released its plan in early March.  Shortly after that the lenders lifted their moratorium.

Are you ready for this?  The numbers are expected to continue to rise in the coming months.

This crisis is out of control.

Remember – no Lender wants to take over a home.  They lose on this.

If you want to save your home from foreclosure, start to work on it immediately.  I can never emphasize that enough.  Get help from a lawyer or an expert in this field.  They know what they are doing.  They can tell you what you need to do to save your home.

You can also check out my EBook at www.stopforeclosureanswer.com.  It contains ideas for you to take charge of the foreclosure process and to keep your home – the home you always wanted and have worked so hard for.

Much Success,

Mark Elkins

If you have been reading my posts here on my Blog, you know that rather than representing yourself in the foreclosure process I recommend that you hire the best person whom you can find to represent you.  That may be a lawyer or an expert in the field. 

I do that for a reason.  You want to guarantee the best outcome for yourself and your family that you can.  If you don’t have any knowledge of foreclosure, the law and your legal rights or how modifications are done, you are not going to do a good job.

Now when I tell you to hire the best person to represent you, I am telling you to use their expertise.  They are your aide.  You still want to control the process.  Don’t delegate it to them.

If they tell you that they are submitting your application for modification to your mortgage company, follow up with them to make sure they have submitted it. 

If they tell you that they are going to call your mortgage company on a certain date in the future, call them the day before.  Remind them of the call and ask them if they need any more information from you.  If they don’t call you shortly afterwards to update you on the phone conversation, call them again and find out about the call.

If a court date is scheduled, call them several days before and remind them of the date.  If they are going to court on their own, follow up with them and ask them about the outcome.

Always remember that the lawyer or expert you have hired has many other clients.  You don’t want them to overlook anything on your case because another client called and they forgot what they were supposed to do for you.

By taking charge and controlling your case you will get a far better outcome than you would have if you let your lawyer or expert do it.   They just might drop the ball.  Your case may be delayed.  The outcome for you may not be as favorable as it could have been.

You owe it to yourself and your family to have your lawyer or expert do the best job representing you.

Much Success,

Mark Elkins