Five Questions for the Presidential Candidates About the Foreclosure Crisis

By Sean Coffey, MPA, Program Manager, ForeclosureHelpSCC

  1. What is your position on Fannie Mae and Freddie Mac and allowing principal reductions for homeowners?   If elected or re-elected, would you consider changing this policy so they could allow principal reductions?  (In addition to principal reductions for Fannie and Freddie Loans through Keep Your Home California).
  2. Would you push for extension of the Mortgage Debt Forgiveness Act which is set to expire in December 2012?
  3. Will you push to extend the Independent Foreclosure Review (and potentially the foreclosure refund under the Attorney General settlement) deadline so that more people can learn about it?
  4. Is there anything you would change with current system of modifications, short-sales, and foreclosures?
  5. Do you think we have put adequate policies in place to prevent another mortgage meltdown and foreclosure crisis?

ForeclosureHelpSCC is sponsoring a FREE foreclosure resource fair here in San Jose on October 20th at Overfelt High School from 9am to 3pm..  Come meet with a HUD-approved housing counselor, learn about your options, and make a plan.  Visit our website or blog post for more information, or you can call us to register: 408-293-6000.

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit our website: www.foreclosurehelpscc.org.  Our HUD-approved counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.

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 or send us an email: help@foreclosurehelpscc.org.

1 in 5 consumers receive a different credit score than their lender

By Sean Coffey, MPA, Program Manager of ForeclosureHelpSCC

A recently released report by the Consumer Financial Protection Bureau raises some serious concerns about credit scores and the credit bureaus that create the scores.

Credit scores are important because they are a large of the equation in determining the price that a person will pay for credit. A person who is perceived as a good credit risk (as judged by a high credit score) will likely obtain a lower interest rate for a loan as compared to somebody who is a bad credit risk (as judged by their score).

That’s why the results from the study are so troubling. The Bureau studied 200,000 credit files from the three big credit bureaus (TransUnion, Equifax, and Experian) and found that about one in five consumers would receive a “meaningfully different score than would a lender.” This has harmful implications for consumers, because they could be either applying for credit that they can’t obtain (because the score they’re seeing is higher than the potential lender is seeing). Or, they could end up paying more for credit than they should because the score the consumer saw is lower than the score the lender saw.

Thirty of the credit bureaus (representing 94% of all bureaus) will come under the supervision of the Consumer Financial Protection Bureau on September 30, 2012, and it appears that there is a lot of work to be done.  In the mean time, the Bureau suggests that consumer shop around for credit and check their credit reports and correct any inaccuracies.

To learn more about this study, visit: “Analysis of Differences between Consumer- and Creditor-Purchased Credit Scores”
You can also read our previous blog post: “Rebuilding your credit after a foreclosure or short sale”

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit our website www.foreclosurehelpscc.org.  Our HUD-approved counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.

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

California PayDay Lender Settlement: Oct. 1, 2012 Deadline

By Sean Coffey, Program Manager at ForeclosureHelpSCC

Have you heard about the payday lawsuit and settlement against Money Mart and Loan Mart?

The San Francisco City Attorney, Dennis Herrera, sued Money Mart and Loan Mart for “unfair and fraudulent business practices” in making payday loans in California.

As part of the settlement, Californians who received short-term installment loans between 2005 and 2007, and oversized loans in 2005, may be eligible for restitution for much of the interest, fees, and finance charges that they paid. There is $7.5 million in funds for the settlement, and eligible consumers may receive between $20 and $1,800 each.

Deadline Fast Approaching
The deadline to apply for restitution under this program is October 1, 2012, so there is not much time left for consumers to apply.

How do I apply?

There are three ways you can get more information or apply to receive restitution:

  1. You can fill out a claim form on the SF City Attorney’s website.
  2. You can call the City Attorney’s Money Mart Settlement Hotline: 866-497-5497
  3. You can email moneymartsettlement@sfgov.org

Reminder: Independent Foreclosure Review Deadline is December 31, 2012
And, as a reminder, if you are a homeowner who had any “foreclosure actions” on your primary residence between January 1, 2009 and December 2010, you may also want to learn more about the Independent Foreclosure Review program. This agreement with 14 banks and servicers also has a deadline that is fast approaching: December 31, 2012. For more information about this program, visit our earlier blog piece on it, or visit the website: independentforeclosureeview.com

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

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.