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.

California Foreclosure Refund Program, Part of the Attorney General Settlement

By JoAnn Parrott, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC.

Today’s Post is about the Foreclosure Refund Program, part of the national Attorneys General Mortgage Settlement.

 What is the Foreclosure Refund Settlement program?    
The foreclosure refund program is one of three parts of the national attorneys general settlement with the five largest banks.  As part of this $25 billion settlement, approximately $1.5 billion has been earmarked for the foreclosure refunds.   The five banks (Chase, Ally/GMAC, Bank of America/Countrywide, Citibank, and Wells Fargo/Wachovia) agreed to compensate homeowners who lost their homes to foreclosure inappropriately between January 1, 2008 and December 31, 2011.

The remaining money is being used to provide up to $3 billion (nationally) in refinancing for homeowners who are underwater.  In addition, up to $17 billion is being used for modifications (including principal reductions), short sales, and monetary assistance for homeowners who are transitioning out of their homes.

Is my lender part of the Settlement program?  The participating lenders are Ally/GMAC (800-766-4622), Bank of America/Countrywide (877-488-7814), Citibank (866-272-4749), JPMorgan Chase (866-372-6901) and Wells Fargo/Wachovia (800-288-3212).

Am I eligible to apply?  YES – Regardless of the circumstances you are currently experiencing or have experienced in the past, if your lender is participating in the program, you can apply.

How do I apply?  For the foreclosure refund program, you may receive a claim form as well as general information regarding the program from the National Settlement Administrator.  Kamala D Harris, California’s Attorney General, explained in a press release that letters are being mailed directly to 432,584 California homeowners between September 24 and October 12, 2012 about the foreclosure refund.  If you believe that you are eligible for the foreclosure refund but did not receive a form, you can call the National Mortgage Settlement Administrator at 1-866-430-8358, Monday through Friday 7:00 a.m. – 7:00 p.m. Central Time.

Once you receive the letter in the mail, you will need to complete the form and mail it back, or you can also fill it out online (but you’ll need the claim number from the letter you received, so don’t throw it away).  More instructions are on the National Mortgage Settlement website. 

For the other two parts of the settlement (refinancing and loan modifications), you can contact your lender directly to ask about your eligibility and the bank’s timeline for implementing these options.

How long do I have to apply?  The deadline for submitting a claim for the foreclosure refund is January 18, 2013.

What if I don’t get a letter?  If you don’t receive a letter by October 31, 2012 or if you have a different address now, contact the National Settlement Administrator at 866-430-8358 (M- F from 5am-5pm PST) or send an e-mail with your current mailing address to administrator@nationalmortgagesettlement.com.

Do I need to hire somebody to help me apply?  NO – The claim form is easy to complete.  If you have questions, call 1-866-430-8358 (M-F from 5am-5pm PST) for help or send questions via email to: administrator@nationalmortgagesettlement.com.

What if I’m contacted by an agency that wants to help me?  Be aware of possible settlement-related scams.  Do not provide personal or financial information or pay money to anyone who claims to provide settlement-related assistance.  If you believe someone is conducting a scam, contact the Attorney General’s Public Inquiry Unit at http://oag.ca.gov/consumers/general.

What do I have to prove with my claim?   Once you are qualified, you do not need to prove financial harm to receive a payment nor do you give up your right to pursue legal action against the lender.

If you want, you can also apply for the Independent Foreclosure Review Process.  It is a settlement with other regulators and 14 banks and servicers based on robo-signing issues that occurred between January 1, 2009 and December 31, 2010.  The Independent Foreclosure Review deadline is soon: December 31, 2012.  More information on this program is available at our blog post about the Independent Foreclosure Review  (scroll down to the bottom of the post) or on the Independent Foreclosure Review website.

How much money will I get?  The amount of your refund depends on the total number of homeowners who decide to participate.  The estimated number of participants nationally is approximately 2 million people.

When will I get my money if I am eligible?  Payment checks are expected to be mailed to eligible participants in mid-2013.

What if I still own my property but need help paying the mortgage?  Contact your lender or a HUD-approved counseling agency to discuss your options.   To locate a HUD agency, call 800-569-4287.

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 Joseand 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.

 

Foreclosures in San Jose and Sunnyvale: Three Reasons Time is Not on Your Side

By Sean Coffey, MPA, Program Manager of ForeclosureHelpSCC

In a famous Rolling Stones song, Mick Jagger told us that “Time is on My Side.” However, this is NOT the case if you are having trouble paying your mortgage here in San Jose or Sunnyvale, California. While you have probably heard stories of people not paying their mortgages for a long time and remaining in their home, these stories are the exception, not the rule.

In today’s post, we are going to review three “time issues” that homeowners should consider if they are having trouble paying their mortgage:

1. Foreclosure timeline in California: Once you miss your first mortgage payment, it will be reported on your credit. However, it isn’t until after you miss your second mortgage payment that your bank or servicer can file a Notice of Default. This is the first step in the foreclosure process. While it is serious, you still have at least 90 days after the Notice of Default is filed before you could receive a Notice of Trustee Sale. During that 90 days, you can bring the mortgage current or work with your bank on an arrangement like a modification or repayment plan.

After the 90 days has passed, then your bank or servicer can send you a Notice of Trustee Sale. A Notice of Trustee Sale tells you that the home is going to be sold in three weeks. These are the minimum time frames allowed by law. Your bank or servicer may move slower than these time-frames, but they can’t move any faster.

An important note: the Notice of Default and Notice of Trustee Sale are both public record, so you may be contacted by people who want to “help.” I’m biased, but based on our experience cleaning up after these “experts,” I would be very wary about accepting help from people that call you. In fact, in California, it is illegal to charge an up-front fee for a loan modification.  Instead, if you’re here in San Jose or Sunnyvale, call ForeclosureHelpSCC (408-293-6000), where we can set up an appointment for you to meet with a trained housing counselor from one of our four HUD-approved counseling agencies. We are funded by federal and local grants, so we do not charge the homeowner for our services.

2. The Mortgage Debt Forgiveness Act is currently set to expire at the end of 2012.
Earlier this month the Los Angeles Times reported on a topic that has many people in the housing world concerned: “Mortgage debt relief may bring new pain: a tax bill.”  The Times explained that a law passed in 2007- The Mortgage Forgiveness Debt Relief Act is set to expire at the end of the year. Prior to enactment of this law, if you had a foreclosure or a short sale, the difference between what you owed and what the house ultimately sold for (at auction or via a short sale) was considered taxable income. The same issue would apply for principal reductions. For example, if you had a mortgage balance of $450,000, but short-sold your house for $400,000, then the $50,000 difference would have been considered income by the IRS. However, under the Mortgage Debt Forgiveness Act, that income has been exempted.

As the Times notes, many of the new settlements, like the Attorneys General settlement, include principal reduction, and much of the relief isn’t slated to begin until 2013. Kevin Stein from the California Reinvestment Coalition pointed out that the relief offered under these settlements won’t be nearly as meaningful if homeowners are being taxed on it.

While there is legislation pending to extend the debt forgiveness, nobody knows for sure what will happen. If an extension is not put in place, homeowners who already face difficult financial situations could find themselves facing a large tax bill.

3. Independent Foreclosure Review Program This is the third “time issue” for San Jose and Sunnyvale homeowners to consider. In our earlier blog post, we explained the details of the Independent Foreclosure Review for homeowners who dealt with issues related to robo-signing from 2009-2010. The deadline to apply for this program is December 31, 2012.

Are you having trouble paying your mortgage and do you live here in San Jose or Sunnyvale California? If so, contact ForeclosureHelpSCC by telephone: (408) 293-6000, email: help@foreclosurehelpscc.org, or visit our website: www.foreclosurehelpscc.org.
ForeclosureHelpSCC is a program that is supported by the Cities of San Jose and Sunnyvale, and staffed by housing counselors from four local, HUD-approved counseling agencies. Our housing counselors can speak to you about what your options are if you’re having trouble paying your mortgage, including programs like Making Home Affordable, Keep Your Home California, the Independent Foreclosure Review, and private, in-house modifications offered by banks and servicers as well. Your housing counselor can work with you to develop a plan of action to begin dealing with the problem instead of ignoring it.

Remember, the sooner you start working with a housing counselor, the more options you will have to address your mortgage situation and potentially remain in your home. Time is not on your side, so pick up the phone and give us a call.

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

Reopening of ForeclosureHelpSCC Program

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.