These are hard times - you hear it everywhere, and worse yet, you feel it everywhere. I'm here to say there is no shame in taking advantage of programs that are out there for homeowners as well as other legal avenues. They are here for people like us who work hard every day for every dollar in an economy that is a bust.
Many times we struggle to make our mortgage payment to avoid foreclosure, but there are many other alternatives. There is refinancing, new loan modifications that are coming out all the time, having an attorney see if the lender committed fraud in lending you money, and deed in lieu - where you can negotiate the money you owe. Also, perhaps bankruptcy could help aleviate your other debts where you can more comfortably make your mortgage payments.
For example, if you owe less than $729,000 on your mortgage, the President’s Making Home Affordable Program could cut your mortgage payments by up to $12,000 per year.
Ask your bank, or if you have an attorney, ask your attorney, about the President's Making Home Affordable Program.
The key is to know that there are options, and you're not alone. Hundreds of homeowners are receiving good news everyday in Miami about their finances. If you need to speak to an attorney about what is available to you, we can recommend a very good one in Miami. It just takes a free consultation to plan your future finances and help you during these times when we are making less money than before and everything is more expensive. There is no shame in it and you will feel less burdened.
Email us or call us to get more information about the attorney.
Thursday, April 21, 2011
Monday, April 18, 2011
HOMEOWNERS FOUGHT LENDER AND WON
A New Jersey couple fought a lender's foreclosure proceedings and ended up being able to keep their home. George Elghossain and his wife, Mona, successfully defended against a mortgage loan servicer that tried to foreclose on their 4-bedroom home. The April 4 court decision set a precedent for other homeowners in the state who now should be able to cite this case for having their own foreclosures dismissed.
Elghossain of North Brunswick, N.J., a real estate broker who raised four children in the bi-level home, pictured left, used his industry knowledge to fight his case in court without a lawyer after he noticed that the servicer of the loan that sent him the notice of intent to foreclose was not the lender that owned his loan.
"When I got the foreclosure complaint I found out the people suing me was not the people I had been paying. Now I had issues with am I paying the right party, and paying the right bank," Elghossain told AOL Real Estate. "So naturally I didn't continue payments, even though I could've made the payment."
By New Jersey state law, the homeowner is suppose to be notified of various items, including the name of the lender that owns the loan and its contact information.
In its paperwork, loan servicer Bank of America failed to include the names of the lender and the lender's representative in its notice of intent to foreclose,
thus violating New Jersey's Fair Foreclosure Act, which was enacted in 1995 and has been updated several times.
"The Fair Foreclosure Act is clear, unambiguous, and readily comprehensibly (especially to a sophisticated lender)," according to the opinion written by Judge Glenn Berman of Middlesex County.
Bank of America wanted the judge to expand the meaning of who is a lender so that it would include any "mortgage lender, mortgage investor or mortgage loan servicer that owns ... or is authorized to negotiate the terms of the homeowner's mortgage." Berman said the bank's argument "is misplaced."
Elghossain purchased the home in 1985 and with his wife and refinanced it in 2004 with a local bank called New Millenium Bank for $260,000 at a 6.25 percent interest rate for 30 years. Zillow currently estimates that the home is worth about $295,000, down from a peak of about $485,000 in 2008.
About a month after Elghossain refinanced, New Millenium sold the loan to Countrywide Document Custody Services, which shortly transferred it to Countrywide Home Loans, Inc. Countrywide sold it to the Bank of New York, but maintained a servicing agreement, which was recorded on December 7, 2006. When Countrywide was purchased by Bank of America, BofA became the servicer, but Bank of New York remained the holder of the mortgage.
Bank of New York was one of 24 lenders to file 200 or more foreclosure actions in New Jersey in 2010, reported the New Jersey Law Journal.
"Homeowners in New Jersey don't contest their foreclosures, and they should," said the 50-something-year-old Elghossain. "With all the forgery and fraud, people should contest their foreclosures. That's my advice. If they can't do it themselves, they should consult an attorney to make sure the lenders have complied with the rules."
Elghossain, who was last with Weichert Realty before becoming his own broker with GME Realty, says the financial downturn in the industry took its toll on his business. In November 2009, he missed a payment on his mortgage and he received the intent to foreclose about 30 days later.
"Before Bank of America filed its lawsuit, I wrote them a certified letter saying I'd like to start making my payments again. Instead of taking that with open arms, they never responded and they filed for foreclosure."
Although the family, with two kids still living at home, are still holding on to the property, Bank of America still has the right to come back and serve the Elghossains with a proper notice of intent to foreclose.
For others facing similarly situations, Elghossain repeats, "Fight your foreclosures. New Jersey law gives you a lot of protection. People say the courts are biased, but that's not my experience." And to buyers of foreclosures, this former real estate instructor says, "Make sure the bank has the right title, or else you'll be facing previous homeowners who find out they still have rights to the title."
Elghossain of North Brunswick, N.J., a real estate broker who raised four children in the bi-level home, pictured left, used his industry knowledge to fight his case in court without a lawyer after he noticed that the servicer of the loan that sent him the notice of intent to foreclose was not the lender that owned his loan.
"When I got the foreclosure complaint I found out the people suing me was not the people I had been paying. Now I had issues with am I paying the right party, and paying the right bank," Elghossain told AOL Real Estate. "So naturally I didn't continue payments, even though I could've made the payment."
By New Jersey state law, the homeowner is suppose to be notified of various items, including the name of the lender that owns the loan and its contact information.
In its paperwork, loan servicer Bank of America failed to include the names of the lender and the lender's representative in its notice of intent to foreclose,
See photos of homes for sale in your area and across the country on AOL Real Estate
"The Fair Foreclosure Act is clear, unambiguous, and readily comprehensibly (especially to a sophisticated lender)," according to the opinion written by Judge Glenn Berman of Middlesex County.
Bank of America wanted the judge to expand the meaning of who is a lender so that it would include any "mortgage lender, mortgage investor or mortgage loan servicer that owns ... or is authorized to negotiate the terms of the homeowner's mortgage." Berman said the bank's argument "is misplaced."
Elghossain purchased the home in 1985 and with his wife and refinanced it in 2004 with a local bank called New Millenium Bank for $260,000 at a 6.25 percent interest rate for 30 years. Zillow currently estimates that the home is worth about $295,000, down from a peak of about $485,000 in 2008.
About a month after Elghossain refinanced, New Millenium sold the loan to Countrywide Document Custody Services, which shortly transferred it to Countrywide Home Loans, Inc. Countrywide sold it to the Bank of New York, but maintained a servicing agreement, which was recorded on December 7, 2006. When Countrywide was purchased by Bank of America, BofA became the servicer, but Bank of New York remained the holder of the mortgage.
Bank of New York was one of 24 lenders to file 200 or more foreclosure actions in New Jersey in 2010, reported the New Jersey Law Journal.
"Homeowners in New Jersey don't contest their foreclosures, and they should," said the 50-something-year-old Elghossain. "With all the forgery and fraud, people should contest their foreclosures. That's my advice. If they can't do it themselves, they should consult an attorney to make sure the lenders have complied with the rules."
Elghossain, who was last with Weichert Realty before becoming his own broker with GME Realty, says the financial downturn in the industry took its toll on his business. In November 2009, he missed a payment on his mortgage and he received the intent to foreclose about 30 days later.
"Before Bank of America filed its lawsuit, I wrote them a certified letter saying I'd like to start making my payments again. Instead of taking that with open arms, they never responded and they filed for foreclosure."
Although the family, with two kids still living at home, are still holding on to the property, Bank of America still has the right to come back and serve the Elghossains with a proper notice of intent to foreclose.
For others facing similarly situations, Elghossain repeats, "Fight your foreclosures. New Jersey law gives you a lot of protection. People say the courts are biased, but that's not my experience." And to buyers of foreclosures, this former real estate instructor says, "Make sure the bank has the right title, or else you'll be facing previous homeowners who find out they still have rights to the title."
Friday, April 15, 2011
BANK WALKED AWAY FROM FORECLOSURE AND LEFT HOME TO HOMEOWNER
Amid all the foreclosure horror stories, every now and then we hear about a good outcome, whether it's by winning a lawsuit through a homestead loophole, because the lender didn't properly serve the owners, or because it doesn't really own the mortgage. Or in the case of one underwater Florida homeowner once facing foreclosure, the bank is simply walking away. The house is his, free and clear.That's what happened to Perry Laspina and an investment property he owns in Jacksonville, Fla. He was facing foreclosure after the 9.5 percent adjustable rate mortgage spiked, sending his payments from $605 to $1,058 on the $72,000 mortgage, reported the Florida Times-Union.
Despite Laspina receiving an extremely high mortgage rate for the time period, he told the paper, it didn't matter. "I figured I'm going to flip this house within six months, maybe three months," he said about his 2006 purchase during the height of the housing boom. After tearing up carpet, refinishing hardwood floors and painting walls, he hoped he'd fetch about $120,000 for the 1,120-square-foot home he purchased for $80,000.
Although the former used car dealer had made several payments on the home he purchased with $8,000 down, the $72,000 principal had only been paid down about $1,000 before he stopped
See photos of homes for sale in your area and across the country on AOL Real Estate
The bubble burst. Laspina was unable to sell it or rent it out, reported the paper, so he chose to stop making payments on the 2-bedroom, 1-bath home, which last appraised for $46,000, according to the Duval County appraiser's office.
The mortgage was through EquiFirst, the nation's 12th-largest subprime lender at the time. In 2009 its corporate parent, Barclays plc, shut the doors of the Charlotte, NC-based mortgage origination business that operated in 47 states, reported the Charlotte Business Journal. America's Servicing Co., a subsidiary of Wells Fargo, was servicing the loan at the time of the default.
The attorney handling the foreclosure on behalf of the lender was foreclosure king David Stern, who went down with his law firm, as we previously reported in "Foreclosure King Falls from Grace." (Stern is in his own legal battle now, suing the lenders who once hired him, as we later reported.)
Through all the mess and the upside down mortgage, it seems Wells Fargo just wanted one less headache. A bank spokesperson apparently told the Florida Times-Union that the loan was written off and the house given to the owner "because of the significant decreased value of the property."
Monday, April 11, 2011
SWAT TEAM FORCED SQUATTERS OUT OF A FORECLOSURE
The Naples, Fla., police department doesn't fool around when it comes to ridding a foreclosed home of illegal squatters. A SWAT team, called to a foreclosed home last month due to a so-called disturbance, gassed the place in an effort to force out a possible squatter who allegedly was hiding in the attic. In the end, three people were arrested inside the home for sale; and two toddlers, ages 2 and 3, were taken by Florida Department of Children and Families.
"It makes me so sad it gives me chills," neighbor Erica Vanover told the local NBC news station. "This is a quiet neighborhood. This is the only house we have in here that's in foreclosure."
Arrested in the 1980-built home were the children's mother, 20-year-old Tatiana Gil, Mitch Werman, as well as alleged attic-croucher, 25-year-old Ryan Kiskadden, pictured, whose uncle supposedly owned the abandoned 5-bedroom, 3-bath home since November 2005. The 2,892-square-footer had been used as the address of Mel's Towing Service.
"Anytime we have houses which are abandoned, it's a place for people to go who don't have residences ," said Det. Wade Williams, of the Collier County Sheriff's Office.
If you suspect a foreclosure in your neighborhood could be a target for being illegally accessed, there are steps you can take to help prevent the situation.
Start a neighborhood crime watch program. Formally, or informally, you and your neighbors
can band together to keep an eye on vacant foreclosed homes. Even if you don't have a formal group, ask your neighbors to report to the police any suspicious activity they see at the vacant foreclosed property.
Help with lawn maintenance. You may have to do the work yourself, alternating with neighbors on shoveling snow, or who mows the grass; or just pool money in to hire a lawn service. (Think of it as helping to keep your own property values from falling).
Have it appear as if someone's home. Even if the city has already cut the electricity, you and your neighbors can do your part by parking a car in front of the house, so would-be criminals can't easily identify the house as an obvious vacant foreclosed home.
Check with local law enforcement. But before you take on any of those tasks, check local trespass laws so you know whether doing the extra chores could land you in a bit of legal trouble.
Be proactive. If you know the neighbors are going to leave the house vacant, ask them to sign a statement giving your neighborhood watch group permission to take care of the home in their absence. Or if the home is now bank-owned, speak with its representative -- you might even get reimbursement or a contribution toward your efforts
"It makes me so sad it gives me chills," neighbor Erica Vanover told the local NBC news station. "This is a quiet neighborhood. This is the only house we have in here that's in foreclosure."
Arrested in the 1980-built home were the children's mother, 20-year-old Tatiana Gil, Mitch Werman, as well as alleged attic-croucher, 25-year-old Ryan Kiskadden, pictured, whose uncle supposedly owned the abandoned 5-bedroom, 3-bath home since November 2005. The 2,892-square-footer had been used as the address of Mel's Towing Service.
"Anytime we have houses which are abandoned, it's a place for people to go who don't have residences ," said Det. Wade Williams, of the Collier County Sheriff's Office.
If you suspect a foreclosure in your neighborhood could be a target for being illegally accessed, there are steps you can take to help prevent the situation.
Start a neighborhood crime watch program. Formally, or informally, you and your neighbors
See photos of homes for sale in your area and across the country on AOL Real Estate
Help with lawn maintenance. You may have to do the work yourself, alternating with neighbors on shoveling snow, or who mows the grass; or just pool money in to hire a lawn service. (Think of it as helping to keep your own property values from falling).
Have it appear as if someone's home. Even if the city has already cut the electricity, you and your neighbors can do your part by parking a car in front of the house, so would-be criminals can't easily identify the house as an obvious vacant foreclosed home.
Check with local law enforcement. But before you take on any of those tasks, check local trespass laws so you know whether doing the extra chores could land you in a bit of legal trouble.
Be proactive. If you know the neighbors are going to leave the house vacant, ask them to sign a statement giving your neighborhood watch group permission to take care of the home in their absence. Or if the home is now bank-owned, speak with its representative -- you might even get reimbursement or a contribution toward your efforts
Friday, April 8, 2011
GET A LOAN WITH BAD CREDIT
To easily snag a home loan, an applicant needs to be a "triple threat" -- have an excellent credit rating, a large down payment, and low debt-to-income ratio with steady significant income. But even if you have bad credit, you don't have to rule out future home ownership.
Homebuyers with bad credit due to a foreclosure or bankruptcy, or who have previously been turned down for a loan, can still get a home loan.
Melanye Miller, a 40-something Chicago schoolteacher, has been hankering for three years to move out of the single-family home she was renting, so that she could purchase a place big enough for her and her three children. But when her credit report revealed a poor score, she knew banks would not give her a home loan, especially not one with zero down payment.
To increase her chances of getting a home loan, Miller began a long road to recovery from her bad credit history, which included not using credit cards and setting aside money each month for her house fund. Finally, in November, after saving for almost two years, she purchased a four-bedroom condo. "I saved and saved, but I decided to purchase a foreclosure condo because it was less expensive and required fewer funds," she says. "Owning a home is not out of the question if you have bad credit. You just have to do your research, know what you can really afford, do even more research, and save your money."
There are hurdles, for sure. But for those with a less than stellar credit history, you need to highlight your "compensating factors" -- those mitigating factors not reflected in your bad credit score or on your credit report.
Even though there are few opportunities for personal appeals when applying for a home loan -- for instance, explaining why a bill was not paid on time -- you can still try to present yourself in the best possible light. It just may help tip the scales in your favor when you've got bad credit in your history.
Here are seven compensating factors to consider submitting with your home loan application to help improve your chances for obtaining a mortgage, even with bad credit:
1. Flaunt other assets. If you don't have a large cash reserve or a large down payment, show loan officers the financial assets you do have. For example, if you have whole life insurance, list the cash value on your home loan application. If you have a sizable 401(k) or other retirement accounts, be sure to list them all and their current values. This strategy lets lenders know that if you're ever in a bind paying your mortgage, you're able to pull from one of these other sources to make ends meet. And if you're seeking to refinance, showing a low loan-to-value rating is a huge plus.
2. Stress job stability. If you have been working in the same industry for several years, and even with the same company for, say, five years or longer, be sure to highlight that to offset a bad credit history. And don't forget to mention any regular pay raises that you've received. If you have a cost-of-living increase every two years, or an annual merit-pay increase, be sure to mention in your home loan application how your income has risen over the years. The same goes for regular bonuses. Proof of rising pay or additional money will help lenders know that you will have funds to offset any possible rise in expenditures, such as property taxes or utilities.
3. Show discipline. Prove to lenders that your bad credit is a thing of the past and that you know how to save. If you've been socking away $600 a month to a savings account or have been contributing yearly to a retirement account, this will help you obtain a home loan. You are trying to show discipline, consistency and stability.
4. Willingness to stay put. Prove to lenders that you're not a flight risk. Home loan lenders like to believe that you're going to stay put in that home for some time (though you can always upgrade or downsize). Show that you're committed to the home, neighborhood or greater community by listing how long you lived at your last residence, if the length of time was significant -- three years or more. If that time was spent living in your mother's basement, that might not fly, unless you show that the home you're interested in is down the street from Mom. Strong ties to the community can help.
5. Increase your down payment. The days of zero down payments are pretty much gone. Yes, you can get a house with a 10 percent down payment, or 3.5 percent under FHA. But in general, the larger the down payment, the quicker the home loan approval. Historically, the single largest obstacle to purchasing a home has been amassing enough money for the down payment and closing costs. If you can't come up with that money on your own, there are a few down-payment assistance programs as well as state and local municipality programs to help. Check with your city for possible homebuyer assistance; show your banker that you're not afraid to ask for help and that you have the tenacity to solve any of your own financial problems.
6. Don't bite off more than you can chew. Be reasonable about the amount of house and home loan you can afford, even if some real estate agents or brokers are telling you that you can afford more. The best advice is to start out smaller than you want. Spend some time getting to know home prices in the area where you want to buy, and know that you always can move up later. It's far better to own a home you can afford than to move into something outside your payment comfort level -- only to lose it and amass more bad credit down the road.
7. Have proof. It's one thing to tell potential home loan lenders that you never were late on your rent, or that you always pay your child support obligations. It's another thing to be able to show them. Be prepared to give documentation to back up all of the items on your compensating factors list. For example, show canceled checks for payments you've made to any entity, show bank statements to prove regular deposits of income or contributions to retirement. A letter from a landlord saying that you paid rent on time is not enough. If you cannot produce these documents, you will raise doubts about the veracity of your credit history.
The bottom line is there are certain red flags that give home loan lenders pause. When your credit history is less than perfect, get past the warning signs by highlighting other, positive aspects of your financial profile.
Homebuyers with bad credit due to a foreclosure or bankruptcy, or who have previously been turned down for a loan, can still get a home loan.
Melanye Miller, a 40-something Chicago schoolteacher, has been hankering for three years to move out of the single-family home she was renting, so that she could purchase a place big enough for her and her three children. But when her credit report revealed a poor score, she knew banks would not give her a home loan, especially not one with zero down payment.
To increase her chances of getting a home loan, Miller began a long road to recovery from her bad credit history, which included not using credit cards and setting aside money each month for her house fund. Finally, in November, after saving for almost two years, she purchased a four-bedroom condo. "I saved and saved, but I decided to purchase a foreclosure condo because it was less expensive and required fewer funds," she says. "Owning a home is not out of the question if you have bad credit. You just have to do your research, know what you can really afford, do even more research, and save your money."
There are hurdles, for sure. But for those with a less than stellar credit history, you need to highlight your "compensating factors" -- those mitigating factors not reflected in your bad credit score or on your credit report.
Even though there are few opportunities for personal appeals when applying for a home loan -- for instance, explaining why a bill was not paid on time -- you can still try to present yourself in the best possible light. It just may help tip the scales in your favor when you've got bad credit in your history.
Here are seven compensating factors to consider submitting with your home loan application to help improve your chances for obtaining a mortgage, even with bad credit:
1. Flaunt other assets. If you don't have a large cash reserve or a large down payment, show loan officers the financial assets you do have. For example, if you have whole life insurance, list the cash value on your home loan application. If you have a sizable 401(k) or other retirement accounts, be sure to list them all and their current values. This strategy lets lenders know that if you're ever in a bind paying your mortgage, you're able to pull from one of these other sources to make ends meet. And if you're seeking to refinance, showing a low loan-to-value rating is a huge plus.
2. Stress job stability. If you have been working in the same industry for several years, and even with the same company for, say, five years or longer, be sure to highlight that to offset a bad credit history. And don't forget to mention any regular pay raises that you've received. If you have a cost-of-living increase every two years, or an annual merit-pay increase, be sure to mention in your home loan application how your income has risen over the years. The same goes for regular bonuses. Proof of rising pay or additional money will help lenders know that you will have funds to offset any possible rise in expenditures, such as property taxes or utilities.
3. Show discipline. Prove to lenders that your bad credit is a thing of the past and that you know how to save. If you've been socking away $600 a month to a savings account or have been contributing yearly to a retirement account, this will help you obtain a home loan. You are trying to show discipline, consistency and stability.
Essential How-To-Guides on AOL Real Estate: Home Buying, Selling, Renting, Moving and Home Improvement
5. Increase your down payment. The days of zero down payments are pretty much gone. Yes, you can get a house with a 10 percent down payment, or 3.5 percent under FHA. But in general, the larger the down payment, the quicker the home loan approval. Historically, the single largest obstacle to purchasing a home has been amassing enough money for the down payment and closing costs. If you can't come up with that money on your own, there are a few down-payment assistance programs as well as state and local municipality programs to help. Check with your city for possible homebuyer assistance; show your banker that you're not afraid to ask for help and that you have the tenacity to solve any of your own financial problems.
6. Don't bite off more than you can chew. Be reasonable about the amount of house and home loan you can afford, even if some real estate agents or brokers are telling you that you can afford more. The best advice is to start out smaller than you want. Spend some time getting to know home prices in the area where you want to buy, and know that you always can move up later. It's far better to own a home you can afford than to move into something outside your payment comfort level -- only to lose it and amass more bad credit down the road.
7. Have proof. It's one thing to tell potential home loan lenders that you never were late on your rent, or that you always pay your child support obligations. It's another thing to be able to show them. Be prepared to give documentation to back up all of the items on your compensating factors list. For example, show canceled checks for payments you've made to any entity, show bank statements to prove regular deposits of income or contributions to retirement. A letter from a landlord saying that you paid rent on time is not enough. If you cannot produce these documents, you will raise doubts about the veracity of your credit history.
The bottom line is there are certain red flags that give home loan lenders pause. When your credit history is less than perfect, get past the warning signs by highlighting other, positive aspects of your financial profile.
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