Stop Foreclosure Answer

There was an interesting article on www.realytrac.com in mid October that I have to tell you about.  It was about the variance between the number of homes on which foreclosures have been finalized and the number which have been listed for sale.

In normal times a mortgage company will normally have a home listed for sale within 30 days of the date on which they acquire the home through foreclosure.  That is not happening today.  It is estimated that between 450,000 and 500,000 homes that mortgage companies have acquired through foreclosure in the last year have not been listed for sale.  Let me say that again.

450,000 to 500,000 Foreclosed Homes Not on the Market

When questioned what is causing this mortgage companies are saying:

• Many have title issues which need to be corrected.
• Some need major repairs.
• Some states have laws which prevent homes from being listed quickly.
• The number of homes to be sold is just too great for their systems.

Some mortgage industry analysts feel that there are other reasons mortgage companies are not placing these homes on the market for sale. 

• One is that the companies are deferring their losses on these.  They don’t have to report their actual losses on these homes until the sales are finalized.
• They are trying to force the government to create a “toxic bank.”  This bank would pay them 50 to 60 cents on the dollar up to the value of these homes rather than the 30 to 35 cents on the dollar that they will get on their own through a sale.  If they threatened the government with releasing all of these homes for sale at once, the government would see that this would cause a massive meltdown in home values in the housing market and would not allow this to happen. 

Let’s Look at This From the Other side

Here we have 450,000 to 500,000 that are vacant.  You know – That really upsets me.  Families lived in each one of these homes.  Where are they now? What has happened to these families?  How have they handled the foreclosures?  What mental and emotional scars do they have?

I also wonder how many of these families would still be in these homes if they were offered lower monthly payments through legitimate loan modifications as outlined in the Making Home Affordable Modification Program. 

If you are facing foreclosure, you want to make sure that this does not happen to you and your family.  You want to do everything you can to save your home.  The first step you need to take is to get representation either from a lawyer or an expert in loan modification.  The stakes are too high for you not too.  In addition you want to learn as much as you can about the foreclosure process and what you can do to save your home.  There is much information on this in my EBook.  You can get more information on my book by clicking Stop Foreclosure.

Much Success,

Mark Elkins

If you look at the September report of the Making Home Affordable Modification Program you will see that Wachovia Mortgage only has authorized trial modifications on 2.7% of the estimated loans that they have which are eligible for such modifications.  The estimate is that they have 75,074 loans eligible for a modification.  Trial modifications have started on 2,019 of these.

Wachovia was taken over by Wells Fargo some time ago.  Wells Fargo has started trial loan modifications on approximately 20% of their eligible loans.

Why Is Wachovia So Far Behind?

Earlier this month Wachovia reported that a computer glitch had caused this problem.  Its computer system could not handle the applications for loan modifications.  Changes are being made and this problem has been corrected.  They should be able to process the applications now.

Wachovia’s management confirmed this.  Executives from Wells Fargo also said that this was the problem.

Wait a Minute – What Was That?

They are saying that Wachovia is lagging in processing applications for loan modifications because of a computer glitch.  Isn’t that just a copout?  It’s just like the old line – My dog ate my homework.

The Making Home Affordable Modification Program started in March of this year.  Wells Fargo signed up to participate in the program on April 13.  Wachovia didn’t sign up to participate until July 1.  Wells Fargo owns Wachovia.  Why was there almost a 4 month delay before Wachovia signed on? 

Did Wachovia really want to participate in the program?

It doesn’t look like they did.  Otherwise why did they drag their feet?  It also looks like the senior management at Wells Fargo supported them on this.

How frequently does it take 6 1/2 months to correct a computer glitch?  Normally companies assign a team of programmers to work on any computer glitches and they are resolved more quickly.  It looks like this was not a top priority for Wachovia and Wells Fargo to correct.

Let’s say that this computer glitch existed and was severe.  They were doing everything they could to resolve it but it did take all of this time.  Couldn’t Wachovia have assigned people in their company to manually review the files and approve trial modifications on loans?  Wouldn’t the executives at Wells Fargo have suggested this if they really wanted people facing foreclosure to be helped?

If they had made a serious effort here and manually reviewed and approved applications, they would have approved more than 2,019.

What Was The Cost of Wachovia’s Actions?

Was a halt put to the foreclosure actions on the other 73,055 loans that were eligible for a trial modification?  Did any people in this group lose their homes because of this alleged “computer glitch?”  Were any of the people facing foreclosure who had applied for loan modifications told what was happening?   Did any of the management at Wachovia or Wells Fargo really care about the impact their actions were having on people’s lives?

Here is another instance where the ones who suffer most are the people who are facing foreclosure.  Most people feel that mortgage companies will do all they can to help their customers any way they can.  Yet that does not happen.

If you have a loan with Wachovia and are facing foreclosure and if you want to save your home, get a lawyer or an expert in loan modifications to help you.  See them as soon as possible.

If you have a loan with a different mortgage company and are facing foreclosure, don’t think that your mortgage company is going to do all they can to help you save your home.  Expect that they will treat you the same way.  It will take them forever to review your application for a loan modification and they may lose what you submit to them many times before getting back to you on it. 

Learn as much as you can about the foreclosure process and the rights you have during it.  Also learn about what action you can take to save your home.  My EBook has much information on this that you may find very useful.  If you want to find out more about this EBook, please click Stop Foreclosure.

Much Success,

Mark Elkins

Just because a state passes a law which looks like it will help people facing foreclosure does not mean that the law will actually do that.  That is what has happened in New York.

Let Me Tell You About It

In August of 2008 a law was passed in New York.  This law created a mandatory Foreclosure Settlement Conference Program for subprime mortgages.  The law made the court system responsible for running this program.  Only subprime mortgages were covered.

Right from the start there were problems:

• No one was required to explain the law and the conference program to people with subprime mortgages who were facing foreclosure.
• Counseling was recommended but not required.
• Mortgage companies were required to send representatives to the conferences.  However, the companies didn’t always give them authority to act. 

It’s been a little over a year since the program started.  What have the results been?  Several weeks ago there was an article in The New York Daily news.  The title was

No Fix for foreclosure threat

In the article Phyllis Furman, the Business Writer for the newspaper, reported that the program has been a bust so far.  She mentioned the following problems:

• Only 3% of the people with subprime mortgages facing foreclosure were offered a loan modification in the 800 settlement conferences that took place during two months this summer.
• Most conferences were adjourned and the people would have another chance to reach a settlement with their mortgage company.
• 45% of the people facing foreclosure came prepared for the settlement conferences.
• Representatives from mortgage companies brought the proper documents only 3% of the time to scheduled conferences.  Frequently the representatives did not have the authority to approve a loan modification.

It was felt that the court system had already been overwhelmed and could not implement the program created by the law.  They were also given very little guidance in how to implement the various aspects of the law.

Studies are being done to see what changes need to be made to have the counseling program operate as it was originally intended.

Let’s Take a Closer Look

This was a mandatory Foreclosure Settlement Conference Program.  Doesn’t mandatory mean that all parties have to take part? 

I can understand how only 45% of the people with subprime mortgages facing foreclosure came prepared.  No one was letting the people know what they had to do.  They also were not encouraged to get someone to represent them.

The mortgage companies clearly violated the law.  They have legal advisers who interpret laws for them; these advisers had to have told the companies the law required them to send representatives to these conferences fully prepared and with the authority to agree to loan modifications.  Apparently the companies have chosen not to do this.  Didn’t the law specify what penalties would be assessed if this happened?

Didn’t the state legislators know at the time that the law was passed that the court system was overwhelmed and would have problems implementing what the law required?  Why weren’t additional funds made available to the courts so that they could hire the staff they needed?

Who Has Suffered Here?

Clearly the person facing foreclosure has suffered the most here; primarily those whose settlement conferences have been postponed because the representatives from their mortgage company were not adequately prepared or didn’t have the authority to act.  They have to wait longer to find out if their loans can be modified and if they can save their homes.  They and their families have to worry longer.

It looks like the law in New York was poorly designed.  People are suffering because of it.

The sad thing is that New York is not alone.  Other states have passed laws similar to New York’s.  While it may look like these laws will help people facing foreclosure save their homes, they may not.

If you state has passed a law which has set up a mediation program for people facing foreclosure and their mortgage companies, check to see how well it is performing.  If you are facing foreclosure, don’t assume that your rights will be protected at a mediation conference and that you don’t need someone to represent you.  Get a lawyer or an expert in loan modifications to represent you.  You will find their help invaluable during the mediation process.

Also remember that you should know as much as you can about the foreclosure process and the steps you can take to save your home.  You can get this knowledge fairly quickly.   There is much information available on the subject and it is easy to understand.  In fact, I have written an EBook on saving a home from foreclosure.  Check it out by clicking Stop Foreclosure.

Much Success,

Mark Elkins

At the end of September I read an article about the impact of this recession on the people in the United States.

Middle Income and Poorest Families Hardest Hit

 The article reported that the middle income and poorest families have been hardest hit by the recession.  It went on to say that the gap between the richest and poorest Americans has widened.

10% of Americans make more than $138,000 a year.  Their income is almost 11.5 times higher than those who are at the poverty line and earn about $12,000 a year. That gap has increased since 2007.   In 2008 median income was $50,303.  That is the lowest it has been since 1997.  13.2% of the people in this country are at the poverty level.  That is also an 11 year high.

While the incomes of the richest people may have been reduced, most have kept their jobs.  The impact of the recession has not been as severe on them as it has been on the middle class and the poor.  Many in the middle class and many of the poor have lost their jobs.  They have remained out of work for long periods of time.  Frequently those unemployed in the middle class have been forced to take jobs paying far less than they had been making previously.  The poorest have been hit the hardest.  They have the greatest difficulty finding work and are really struggling to get by.

What Impact has the Recession Had on Foreclosures?

 We know that the recession has led to a dramatic increase in the number of foreclosures.  I have yet to seen any type of study on the number of foreclosures by income bracket.  I assume that if one were done, it would track the findings that were reported in the article I just talked about.

I assume that the largest concentration of people facing foreclosure is the poor people in America – those who are suffering the most in this recession.  I also assume that the next highest concentration is among the middle class especially those who have lost their jobs and cannot find jobs paying what they had been earning previously.  The people probably least affected are the wealthy – those earning more than $138,000 a year.  While their incomes may have dropped, job loss is less frequent.  They probably have more than enough in savings to tide them over until this recession ends.

Isn’t It Sad

 that those affected most by foreclosure are probably those who can afford it the least?  Just imagine the impact on them and their families.  One of the leading causes of divorce in this country is a financial challenge.  A foreclosure has to magnify that.  A foreclosure has to have a devastating impact on the mental health of not only the parents but also the children.  Many will carry those mental health scars through their lives.  When they are adults, they may never realize how these scars developed. 

We Need to Get Mortgage Companies to Act

 The performance of the mortgage companies in approving people for trial loan modifications in the Making Home Affordable Modification Program is horrible.  In the first seven months of the program mortgage companies have approved trial modifications for only 16% of the estimated total number of people who are eligible for them.  They should be penalized for their lousy job.  From what I have read, states are responsible for legislation dealing with foreclosures.  So if mortgage companies are to be penalized for not helping people facing foreclosure, each individual state would have to do it.

Contact your elected state officials and ask them to get involved.  In addition to contacting your state representative and senator, contact the attorney general of your state.  Express your displeasure with what is happening and demand that they require the mortgage companies to act faster in approving people for trial modifications.  Demand that they penalize mortgage companies that don’t.  Suggest that they consider barring any mortgage company that does not take steps to improve from doing business in your state.

We Need A Groundswell of Public Opinion

 The reason we have seen a lack of action in the various states to hold the mortgage companies accountable is these companies have powerful lobbyists.  These lobbyists have worked to defeat or modify any legislation proposed which would require mortgage companies to really help people facing foreclosure.  The only way for us to defeat them is to get the message out to all of our neighbors.  We have to make them understand how the mortgage companies are hurting people facing foreclosure.  Over and over again I have seen instances where public outcries have led states to take corrective action.

If you are facing foreclosure, do all you can to save your home.  Start by learning all you can about the foreclosure process.  Then study what steps you can take to get your mortgage company to modify your loan.  You might want to check out my EBook on this.  You can get more information on it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

This foreclosure crisis is impacting many people in different ways.  Those hardest hit are the elderly who suddenly find themselves facing foreclosure.  They are on a fixed income and quickly realize that there is no way that they will be able to continue to pay their mortgage. 

Worry Consumes Them

They worry about what will happen to them and their spouses.  Since they are not working, they have all of this free time on their hands and they just obsess about their problems.  Here in their golden years they were supposed to be enjoying themselves and now they are worried that they soon may be homeless.  What are they supposed to do?

Most senior citizens are very proud.  They want to take care of themselves.  They don’t want to reach out to others for help.  Yet by trying to take care of everything themselves they find themselves drowning and don’t know where to turn.

That’s Where a San Diego Man Recently Found Himself

At 69 years old he suddenly found himself unable to continue to make the monthly payments on his mortgage.  The interest rate was 17% and he was falling behind on his payments.  His wife is 73 years old.  He pictured them both being homeless in the near future.  He himself has some sever medical conditions and believed that he only had a year or two to live.  So how would his wife carry on without him?  Rather than looking for help from others

He Took Things Into His Own Hands

He only owed about $50,000 on his mortgage.  So he figured that the best thing for him to do would be to rob a bank.  He walked into a branch of the Bank of America using a cane with one hand and holding a briefcase with the other.  He walked up to the branch manager and handed him a note.  The note said that he had a bomb.  He got $107,000 in the robbery but was caught very quickly.

When you think about it, the story is fairly comical.  Picture it.  A 69 year old grandpa with a cane walks in and robs a bank.  The sad thing is that it could have been my grandfather or yours.  How would we react?

Nowhere in the article about this man that I read did it indicate that he asked anyone for help.  It looks like he just took matters into his own hands.  He didn’t want to lose his home.  So he did the only thing he thought of to get the $50,000 he needed.  He went where the money was – a local bank.

If you are facing foreclosure, don’t think that you need to figure out how to handle it on your own.  Contact a lawyer or a person skilled in foreclosure matters.  Sit down with them.  Explain to them what is happening.  Let them tell you the options open to you.  You may think that there is no way you can save your home.  You may be surprised to learn from them that they can help you save it.

At the same time find out as much as you can about the foreclosure process and what you can do to save your home.  There is much useful information on this in my EBook.  You can find out more about this EBook by clicking Stop Foreclosure.

Much Success,

Mark Elkins