Stop Foreclosure Answer

Don’t ever anger a mother. She will get you.

On June 30, the Moms Rising organization sent an email out to everyone on their email list. In that email they told the story of an 84 year old woman in California. Her mortgage company, OneWest, was foreclosing on her and evicting her from the home she lived in for 34 years.

Her husband was receiving kidney dialysis three times a week. He was also suffering from congestive heart failure. He did not want to leave his wife with $30,000 to $40,000 in credit card debt. They explored various options. A representative from IndyMac, a mortgage company, told them that they could refinance their mortgage and take cash out to pay off the credit cards. The representative led them to believe that that was the best option for them.

A month after they refinanced, her husband died. With his passing her monthly income dropped almost $800 a month. As time passed the interest rate and the monthly payments on the mortgage increased several times. Finally she found that she could no longer continue to make the payments.

IndyMac was taken over by the FDIC late last summer. Their mortgages were turned over to OneWest. OneWest is one of four large lenders who have not agreed to participate in the Making Home Affordable Modification program.

The ACORN organization brought this to the attention of the Moms Rising organization. In the email Moms Rising sent out, they asked the readers to click on a link. That took them to a site where they could send a letter to the Chief Executive Officers of all four lenders. In addition to OneWest, the others were Litton, Home Eq and American Home Mortgage Servicing.

The letters were already prepared. All that anyone who wanted to send a letter had to do was type their name, home address and email address. Not only did Moms Rising take care of preparing the letter. They delivered it. What could be easier for a person who wanted to participate.

Can you imagine the reactions of the Chief Executive Officer of OneWest, Litton, Home EQ and American Home Mortgage Servicing when these letters are delivered? I can guarantee you that no one of them wanted this negative publicity.

Since then American Home Mortgage Servicing has signed a contract to participate in the Making Home Affordable Modification Program. Do you think that they were pressured by the work Mom’s Rising did?

We will probably hear how the other 3 companies are starting to do more loan modifications in the future. They may even join the program.

If you want to see what Mom’s Rising campaign looked like, go to this link, http://momsrising.democracyinaction.org/o/1768/campaign.jsp?campaign_KEY=27284. You’ll even see a picture of the nice 84 year old woman who may lose her home.

If you are facing foreclosure, you will find much valuable information on the steps you can take to stop the process and save your home in my Stop Foreclosure Answer Ebook. Click here for more information.

Much Success,

Mark Elkins

On July 5, 3 new laws took effect in Michigan. These laws are designed to encourage mortgage companies to work out loan modifications with people falling behind on their mortgage payments who are facing foreclosure.

Under these laws, a mortgage company is required to give the person who is facing foreclosure the name and phone number of a real person who has the authority to modify their loan. The company is required to include this in the notice they send to them telling them that they are starting to foreclose.

The mortgage company also has to send them a list of approved housing counselors. The person facing foreclosure can have one of these counselors go with them to a meeting with the representative from the mortgage company.

The purpose of the meeting is to work out a loan modification. When the person facing foreclosure requests the meeting, the foreclosure is put on hold for 90 days.

The monthly payment in a loan modification can be no more than 38% of the person’s gross monthly income. The steps to be taken to bring the payment down to that level are specified.

If the person facing foreclosure qualifies for a modification and if the mortgage company refuses to agree to modify the loan, the mortgage company will have to go through a lengthy and costly process to finalize the foreclosure.

These laws only apply to those cases where the foreclosure action starts on or after July 5. Michigan felt that the Making Home Affordable Modification program already covered people facing foreclosure who had Fannie Mae, Freddie Mac, FHA and VA loans. So these loans are exempt from the new laws.

Most large mortgage companies are chartered by the federal government. Normally they only have to abide by laws and regulations of the federal government. They are not bound by state laws. The legislators in Michigan wrote the laws in a specific way so that they would apply to all mortgage companies and that none could get around the provisions of the new laws.

So what does this mean for a Michigan resident who is facing foreclosure?

In effect they have the right to mediation. At the meeting on the loan modification they can have their housing counselor present. The housing counselor will help to negotiate the modification for them.

One major concern is that people facing foreclosure may not follow through and request a meeting with the representative of their mortgage company. It has been found in other states that many people facing foreclosure don’t open the letters from their mortgage company. In addition many believe that they will lose their home through foreclosure and that there is nothing they can do to prevent it. So they do nothing.

A second concern that has come up is that there are probably not enough housing counselors to handle the volume of cases that is expected. This will have to be monitored.

The impact of these new laws won’t be known until the end of this year or early next year. It looks like this is a great step in helping people save their homes from foreclosure. However if people facing foreclosure doesn’t request a meeting or if there are not enough counselors, the success rate may be far lower than expected.

Much Success,

Mark Elkins