Category Archives: Foreclosure Prevention Services

Nancy’s Nine Rules for an Effective Relationship With Your Housing Counselor

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By Nancy Rueda, Housing Counselor at Asian Inc., one of the members of ForeclosureHelpSCC

Trying to find assistance during a difficult time with your mortgage may be overwhelming, but there are trained housing counselors who can help you learn about your options so that you can make an informed decision. Today I’m sharing a few tips that will help you get the most out of your time with your housing counselor.

1) Take notes – At a housing counseling appointment you will learn a lot of new information about mortgage assistance programs, and what your options are if you are having trouble paying your mortgage. As part of your appointment, we will also give you a handout that explains the foreclosure timeline and process in California. It can be really helpful to take notes so that you have something to refer back to after your appointment.

2) Bring questions to the appointment: Before meeting with your housing counselor, write your questions and bring them to your appointment. That way you won’t forget any important questions or concerns you have about your mortgage.

3) Arrive on time: Housing counselors are assisting a number of homeowners at any given time. By being on time, you can ensure that you get the full time allotted for your appointment with your housing counselor.

4) Share all important information with your housing counselor. There are two really important reasons for you to make sure you’re sharing all relevant information with your housing counselor. First, similar to a doctor making a diagnosis, a housing counselor needs all information about your mortgage, financial, and income situation so that they can do a thorough analysis and make sure you’re informed about all options available to help you. If you only provide them with half the information, then you may miss out on learning about all of your mortgage options. Second, if your housing counselor is advocating on your behalf with your bank or servicer, they need to be operating with the same information that the bank or servicer has in order to be an effective advocate for you.

5) Awareness: While friends and family members may have received a loan modification, each mortgage situation is different. The banks and servicers (and in some cases, an investor who may or may not approve of a modification) all have different programs and policies. This could mean that the same bank provides two very different modifications for two houses on the same street. Or, because of investors, the bank may be allowed to modify one mortgage, but not the other.

6) Documents, documents, documents: If you are submitting a request for a loan modification, you will be asked to provide a lot of documents to your housing counselor. Housing counselors can’t submit incomplete packages to the bank or servicer. By providing all of the documents at one time, you can make your case go smoother and it will be easier for your housing counselor to submit a package to the bank. If a housing counselor has to wait on documents, it can slow them down in submitting a package to your bank or servicer. In addition, during the time your housing counselor is waiting for “late” documents, the documents you already submitted may become out of date, and you will have to submit new ones.

7) Follow up with your servicer – After your housing counselor informs you that your workout packet has been submitted to your servicer, follow up with your servicer. Do not wait for your housing counselor to remind you. It’s suggested that you follow up with them every week and make sure to write down what was discussed, the date, time, the name of the person you spoke with and their ID number on your note book. If you are giving information to the bank or servicer, it should match the information that your housing counselor submitted in the package. If circumstances change (i.e. you get an increase or decrease in pay), let your housing counselor know.

8) Keep your housing counselor updated – There will be times when your bank or servicer will contact you directly and may request additional information from you. Don’t forget to contact your housing counselor and inform them of what was discussed or what was requested from you. If you had to fax documents to your servicer, send them to your housing counselor as well, that way they are aware of what was provided to your servicer.

9) Be patient, polite and proactive – As overwhelming as this process is, housing counselors are here to assist you in learning about your options, which may include a short sale, modification, or in some cases, letting go of the home and planning a successful “exit strategy.” Regardless of which path you decide to take, it’s a “team approach” and your active participation is important. Being patient, polite, and proactive will also be helpful in communicating with your bank or servicer, since you may have to be the messenger between different departments at your bank or servicer.

Have you worked with a housing counselor before? Do you have any comments or tips you would like to share?

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org.

New Mortgage Servicing Rules Proposed- What Does it Mean for You? Part 2 of 2

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By Sean Coffey, Program Manager at ForeclosureHelpSCC

In an earlier post,  we explained that the Consumer Financial Protection Bureau announced proposed rules around loan servicing and we examined the first part of this proposal. In today’s post, we’ll examine the second part of the proposed loan servicing rules. The rules are nicknamed the “no runaround” rules, and address loan servicing issues that homeowners sometimes encounter with their mortgage loan servicers.

Under the new rules, banks or servicers will have to:

  • Credit a consumer’s account on the same date that the servicer received the payment.
  • Maintain accurate and accessible documents to minimize errors, provide oversight of any contractors and of any foreclosure attorneys working on behalf of the servicer.
  • If a homeowner notifies a servicer that they believe a mistake has been made, then the servicer would need to provide acknowledgement of the homeowner’s complaint, conduct an investigation, and respond to the homeowner in a timely manner.
  • Provide direct and ongoing access to servicer employees who have the power to assist homeowners.
  • Promptly review applications for programs that help avoid foreclosure.
  • Wait until after a review of an application is complete before moving forward on a foreclosure sale.
  • Inform homeowners when their packages are incomplete.
  • Allow homeowners to appeal certain servicer decisions.

Some of these proposed rules are similar to laws that are already on the books, for example the Real Estate Settlement Procedures Act also requires banks and services to respond to homeowner’s request in a timely manner.

We have heard from several homeowners that the servicing of their loan has been transferred and in the process of transferring, the loan payments made to the first servicer aren’t being credited with the new servicer.

If this has happened to you, you may want to consider sending a qualified written request, also known as a “RESPA Request.” RESPA stands for Real Estate Settlement Procedures Act. Under this act, a borrower can send a letter to their lender if there is a dispute about payments or other issues related to the loan, and their servicer is required to acknowledge the request within 20 business days and must try to resolve the issue within 60 business days.

If you do send a qualified written request, it’s important that you include this sentence at the beginning of your letter:

This is a “qualified written request” pursuant to the Real Estate Settlement and Procedures Act (section 2605(e)).

And include this sentence at the end of the letter:

I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

You should send your letter through registered mail so that you have proof that your bank or servicer received it.  You can see an example of a qualified written request on the HUD website: Example Qualified Written Request.

If you would like to learn more about the proposed rules, visit the “Regulation Room”  and see how the proposed rules would affect real-life situations. You can also provides comments on any loan servicing issues you’ve had, or on the proposed legislation.
Have you encountered any loan servicing issues with your mortgage? Any suggestions you would give to the Consumer Financial Protection Bureau as they consider implementing these rules?

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org.

New Mortgage Servicing Rules Proposed- What Does it Mean for You?

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By Sean Coffey, Program Manager of ForeclosureHelpSCC

The Consumer Financial Protection Bureau announced on August 10th proposed rules with the goal of improving customer service for homeowners when they interact with their loan servicers.  Today we’ll look at the first half of the rules.

Mortgage loan servicers are the people that “service” your mortgage by collecting your monthly mortgage payment.  In many cases, the servicer doesn’t actually own the mortgage. Instead, the servicer’s job is to collect your payment, take a small cut for themselves, and then send the rest of your payment to the investors that own your mortgage.   (The Federal Deposit Insurance Corporation has a diagram of this arrangement: Securitization Diagram.) However, some banks did keep mortgage loans after they made them, and continue to service the mortgages.

Homeowners have no authority over who services their loan, and the servicing of their loan could be transferred to multiple different companies over the course of the loan.  Homeowners can’t “shop around” if they have a servicer that provides poor customer service, and some experts have suggested that this arrangement may lead to servicers providing poor customer service without any consequences.

The new mortgage servicing rules, announced on August 10 by Richard Cordray, the Director of the Consumer Financial Protection Bureau, would address poor customer service that some homeowners have experienced from their servicers.

The new rules would require servicers to:

  • Mail clear monthly mortgage statements with clear information about the principal, interest, any fees being charged, escrow, and the amount and due date of the next payment.
  • Warn customers earlier if an interest rate on an adjustable rate mortgage is going to adjust.
  • Inform customers about the consequences of not having property insurance, and alternatives to “force-placed” insurance (this is insurance that a servicer buys for the consumer if they haven’t bought it themselves, in many cases, it costs more than regular property insurance).
  • Reach out to homeowners and inform them of options to avoid foreclosure.

In our next post, we’ll look at the second half of the CFPB’s proposal.

Do you have any rules that you think loan servicers should have to follow when collecting your mortgage payments?

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice.  If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org

Maggie’s Five Rules for Working with Your Bank or Servicer

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By Maggie McCarthy, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC.

1.Calling Your Bank or Servicer: When you call your bank or servicer, always be prepared with information the lender may ask from you. They will probably ask for your:

  • Loan Information; loan number, mortgage payment amount, property taxes, insurance.
  • The servicer or bank will also ask about your income, both gross- (before taxes), and net (after taxes).
  • The servicer or bank will also want to know about your other household expenses, including utilities, food, transportation, insurance, credit card payments, and any other debt payments that you have to make (for example, car loans, school loans).

2. Hardship: When discussing your hardship with your lender, be clear and to the point. They want to know the cause of your hardship, any actions you may have taken to help yourself (for example, cut out cable or reduced other bills), and what kind of help you are looking for from your lender. For example, if you were unemployed for three months but now have a new job (and can pay your mortgage), then you could ask them to add the past due amount to the balance of your mortgage.

3. Documents: If you are seeking a modification, remember that you are essentially asking them to write a whole new loan. While modifications can take time, there are some steps you can take to make the process go faster:

  • Provide all documentation requested;
  • Double-check that you have completed and signed all forms that they are requiring;
  • Make sure all of your supporting documents are up to date. You may have to update some documents like your pay-stubs every month.
  • If you write the loan number on every page of any documents that you are sending to the bank or servicer, it reduces the chance your documents will get lost.

4. Follow-Up: Once you submit all of the documents, follow up with your lender every week to 10 days on status of your request, that also shows that you are very interested in resolving the problem. Start a notebook, and make sure you write the name and ID number of the person you talk to each time, and what you discussed. While this can be a frustrating process, the bank person may be able to help you, so be nice to them, and you may even try and make friends with them. You never know how much power they have to help move your case forward.

5. Other Options: There are other options and programs available to resolve your housing problem, so ask your lender for other options available if you do not qualify for a loan modification. Always ask questions and never agree to anything that you don’t understand or sign any documents that you don’t understand. If you are being offered something, ask if they can put it in writing.

Do you have any tips you have found helpful based on working with your bank or servicer?

Remember: You don’t have to go through this process alone. If you have questions, give ForeclosureHelpSCC a phone call and we can set up an appointment to meet with you: 408-293-6000.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice.  If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org

Reopening of ForeclosureHelpSCC Program

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By Sean Coffey, Program Manager
I am excited to announce that the ForeclosureHelpSCC program re-opened on July 17, and the program has begun assisting homeowners and tenants in San Jose and Sunnyvale who are impacted by the mortgage meltdown.  Through this program, HUD-approved housing counselors will meet with homeowners to help them understand what their options are if they are struggling to pay their mortgage.  For tenants who are in homes that have been foreclosed on, we can help them to understand their rights and options if there is a new landlord, if they want to move, or if they are being asked to vacate or are facing eviction. We can also provide tenants additional referrals for tenant-focused programs.

Consortium Partners
One of the biggest strengths of the ForeclosureHelpSCC program is that it is a consortium effort.  Our four housing counseling agencies include Asian Inc, Neighborhood Housing Services of Silicon Valley, Project Sentinel, and SurePath Financial Solutions.  The support specialists who assist with the day-to-day operations of the program are trained volunteers from the Santa Clara County Association of Realtors, some of whom have been volunteering since the inception of the program in May 2009.  Legal referrals are handled through the Fair Housing Law Project at the Law Foundation of Silicon Valley.  Of course, none of these services would be possible without the financial support from the cities of San Jose and Sunnyvale.  This diverse base of partners is not only essential for running the program, but it also means that we are also able to reach a larger number of people that could benefit from the services of the ForeclosureHelpSCC program.

What does the Future Hold?
The program has been open for three weeks, and we are already receiving phone calls and meeting with homeowners who want to learn about their options.  Beyond word-of-mouth referrals, we also will be marketing the program widely, and this will include letting homeowners know about new programs and resources through this blog. In the coming months, we will be writing about a variety of topics related to the program, including tips for working with your bank or servicer, budgeting strategies, new programs like Keep Your Home California, and new legislation like the California homeowner’s Bill of Rights.

Independent Foreclosure Review
For our first post, we’d like to highlight the Independent Foreclosure Review, which is especially timely because the deadline to apply for a review was just extended to December 2012.  The Independent Foreclosure Review was included in a settlement between federal regulators and 14 banks for the way they processed modifications and foreclosures in 2009 and 2010.

If a homeowner was in any sort of “foreclosure action” between January 1, 2009 and December 31, 2010, and they feel it was improperly processed, then they may want to learn more and consider applying.  A foreclosure action does not necessarily mean the house was sold, the homeowner could still be in the home.

A foreclosure action includes:

  • the home being sold through a foreclosure judgement,
  • the loan went into the foreclosure process but the homeowner brought the mortgage current or entered a payment or modification plan,
  • the home was in foreclosure and the home was sold, the borrower participated in short-sale, or gave the home back to the bank via a deed-in-lieu, or
  • the mortgage was in foreclosure, the mortgage is still behind, but a sale has not yet taken place.

It also has to be the primary residence, and it only applies to the 14 banks/servicers included in the agreement. There is more information about eligibility on the Independent Foreclosure Review website.

If you know of any homeowners who are potentially eligible, please encourage them to contact us with questions.   If a review finds their modification or foreclosure was improperly processed, depending on the situation, the homeowner could receive financial payments, ranging from $1,000 to up to $125,000 plus equity that was lost in the foreclosure.  For more information on the financial penalties, view this chart: Financial Penalties. Thus far, the number of eligible people who have applied for a modification is far below the projections (See this June GAO report for more information), so it is important to get the word out before the deadline passes in December.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice.  If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org

We encourage your feedback, comments, and suggestions for future blog topics. However, the comment area is NOT for soliciting business, and any comments that appear to solicit business will not be posted.