Five Reasons Working With A Housing Counselor is Better Than “Going Alone”

By Aurora Olivares, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC

Did you call your mortgage company because you are having problems with your mortgage payment? If you live in the state of California you were given the phone number for HUD (HUD stands for The U.S. Department of Housing and Urban Development), a requirement under California law. (This requirement was included in Senate Bill 1137 which was passed in 2008 and is set to expire in January 2013).

If you called that number, you were likely referred to a local HUD approved agency where you can receive free housing counseling services. Many folks wonder about what the benefits may be to working with a housing counseling agency.

Here are my top 5 reasons to work with a housing counselor at a HUD-approved agency:

  1. Honest Advice: A housing counselor will help you by assessing your situation. We will talk to you about the good and the bad with an unbiased opinion, but we bring the background knowledge of the best practices and we uphold the national Industry Standards for Homeownership Education and Counseling. In addition, we have worked with many homeowners, banks, and servicers, and this experience means we know how to keep the process moving forward, and we know the programs that may help your situation.
  2. Explanation of bank letters: A certified housing counselor can help you dissect the terminology used in the correspondence issued by your lender and in the paperwork of the loan modification process. While a bank or servicer may say your loan is “going into foreclosure,” we can help you understand what the actual timeline is for foreclosure and how to look out for important things like a Notice of Default. Understanding letters from your bank or servicer can be especially beneficial for non-English speaking homeowners.
  3. Your Budget: A counselor will work with you to review your budget. Counselors can provide budget counseling and calculate your housing ratios so you understand your ability to afford your mortgage and explain how these same ratios could impact your eligibility for assistance. For example, a counselor can review your income vs. your housing expenses and explain to you how that will impact your eligibility for a program like Making Home Affordable.
  4. Communication with your Bank or Servicer: Have you submitted paperwork to your bank or servicer multiple times, or called your designated representative but were not able to speak to them? While these types of issues can’t be completely eliminated, a certified counselor may have a reliable contact with your lender or have an efficient method of submitting your documents which can help smooth out some of the bumps along the way during the lender’s review.
  5. Resources: We provide you with resources. Did your lender tell you if you were eligible for the Keep Your Home California program? (English Website for Keep Your Home California, Spanish Website for Conserva Tu Casa California) Were you advised if you are a good candidate for a reverse mortgage? Did your lender tell you about an up and coming program your county may be working on to aid homeowners in distress or where you could go to get the much needed repairs to your home? Odds are you were not told about some of the resources that are right in your own back yard. We are local, just like you and we know what programs are truly out there to help the community we live in.

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

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

Refinance vs. Modification: What are the differences?

By Yvonne Castillo, Housing Counselor at SurePath Financial Solutions, one of the members of ForeclosureHelpSCC

With the housing crisis all around us in San Jose, Sunnyvale, and other cities in Santa Clara County, we hear some buzz words over and over, words such as foreclosure, modification, refinance and short sale. As a HUD-approved housing counseling agency, we often hear questions about the differences between modification and refinance, and which one is the best one to choose. The information below explains some of the main differences between these two options.

REFINANCE
What is a refinance?  A refinance is a new loan that you take out to pay off your old loan. A traditional refinance will require you to have equity on the property (up to 20%) to request a new loan.

Reasons why people refinance:  There are many reasons you may want to refinance your existing mortgage. For example, you may do it to lower your payments or interest rate. Or, to consolidate your 1st and 2nd mortgages, to extend or shorten the length of your mortgage, to change lenders, or to add or remove someone from your existing mortgage.

What happens when you refinance?  It is similar to the process of when you received your original mortgage. Because this is a new loan, you will receive a new loan number and your new loan may have different terms than your old loan.

Before you contact a lender to consider refinancing you should order your credit reports from Experian, Equifax and TransUnion (consider using Annual Credit Report to get an idea of the information included in your credit report). Generally speaking, the higher the credit rating you have, the better an interest rate you can qualify for, and the more money you will save. You will also need to show sufficient income to afford the new payments as well as your household expenses.

Unemployment and temporary disability benefits are considered temporary forms of income. Therefore, they are not acceptable forms of income when refinancing. You should also be current on your mortgage, car and credit card payments for approximately the past twelve months when considering refinancing as an option to remain in your home.

What costs are involved in a refinance? When refinancing there can be origination, processing and closing costs. Some lenders may waive some of these fees by including them into the loan balance. Check with your lender about any up-front or financed cost involved.

What if I do not have equity in my property? If your property is worth less than what you owe and your loan is owned by Fannie Mae or Freddie Mac, you may want to learn more about the Home Affordable Refinance Program, also known as HARP. This is one of the federal programs to assist homeowners to refinance their loans even if they don’t meet the equity criteria. You can learn more about the program on the Making Home Affordable website.

MODIFICATION
What is a loan modification? It is a temporary or permanent change of the terms of the current mortgage agreement that is usually requested to make the mortgage payments more affordable.

What is the main reason why people request a loan modification? The main reason to consider a loan modification is to have more affordable mortgage payments and remain in your home, especially if you do not qualify to refinance your mortgage. You have to be experiencing a financial hardship which has made it difficult to make your current mortgage payments or missed one or more of your mortgage payments. It’s important to note that banks and servicers do not consider it a financial hardship if your only reason to modify your loan is because you owe more on your mortgage balance than the home is currently worth (also known as being “upside down”).

What terms can be changed in a modification? When receiving a loan modification you will keep your current loan number but some of the terms on your mortgage will be modified. This could include lowering your interest rate, or modifying an adjustable rate mortgage (where the interest rate varies) to a fixed rate mortgage where your mortgage payments and rate will remain fixed for the life of the loan. In some modifications, the interest rate is lowered for a few years (for example, a modification under HAMP can go as low as two percent), and then gradually increases over the course of a few years.

Will my payments be lower with a loan modification? For many households the loan modification has allowed them to reduce their mortgage payments and bring their loan current. However, it is important to note that if your current loan is an interest only loan, then changing it to a fully amortizing loan (where you are paying interest and principal) could result in an increase of your mortgage payment. However, banks and servicers can address this issue by lowering the interest rate, or lengthening the life of the loan (for example from 30 to 40 years).

In some limited cases, a loan modification may reduce or defer the balance owed. The homeowner may have a wish list of how they want their bank or servicer to modify their loan, but ultimately it is up to the bank or servicer (and sometimes the investor(s) who own the mortgage) whether or not they will modify the loan, and if so, how the terms will be adjusted.

Are there costs involved with a loan modification? Generally, there is no origination, processing and closing costs included when doing a loan modification. However some lenders will charge a small loan modification fee that is added to the balance of your loan and disclosed in the loan modification documents.

What information will be reviewed in a loan modification? Your bank or servicer will require a complete financial disclosure to evaluate the possibility of granting a loan modification. Information regarding your household income and expenses, amount of debt, proof of income, reason of the financial hardship, debt to income ratio etc, will be required to evaluate your modification request. If you have stopped making your mortgage payments, your bank or servicer will review if the non-payment is a result of the financial hardship. The bank will also want to see that there is a sustainable action plan going forward that will allow you to have sufficient income to continue paying your modified mortgage.

If you are a homeowner living in San Jose or Sunnyvale and want to know if either of these options will be applicable to your case 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. HUD approved counselors are available to provide free counseling sessions that will help you review your finances and evaluate the options for you.

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

Unemployment Mortgage Assistance Program, Part of Keep Your Home California: How Does It Work?

By Aurora Olivares, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC

Have you heard of the Keep Your Home California program? (KYHC) Are you unsure how the program works to help struggling homeowners avoid preventable foreclosures? A few homeowners I’ve worked with here in the Bay Area are good examples of how Keep Your Home California works.

Are you like Michelle?

I recently was contacted by a woman who was laid off two months ago. She received a flyer from her local EDD office about the Keep Your Home California program. Michelle had used up her savings and was concerned about her ability to pay her mortgage while unemployed. I met with her the following day to go over the Unemployment Mortgage Assistance (UMA) program. Michelle met all the requirements in order to apply for the Unemployment Mortgage Assistance program and her application was submitted the same day.

Michelle kept in contact with the Keep Your Home California team and provided all documents needed for the eligibility review. Michelle’s review went smoothly and she was approved for the UMA program. Michelle was approved to have KYHC make her payments for up to up to 9 months while she looked to secure new employment and had KYHC administer her first mortgage installment before her payment was due, helping her preserve her credit.

Here are some quick facts about the Keep Your Home California program:

Your lender/servicer must participate in the program in order to qualify for the Keep Your Home California funds. Each lender/servicer can participate in as little as one or in all four of the Keep Your Home California programs.

Is my bank or servicer participating in Keep Your Home California?
Check this list: Servicers Participating in Your Home California

There are 4 award programs:

  • UMA-Unemployment Mortgage Assistance Program: Is designed to assist unemployed homeowners who are receiving EDD benefits.
  • MRAP-Mortgage Reinstatement Assistance Program: This program can help by reinstating past due payments.
  • PRP-Principal Reduction Program: Homeowners who owe more than their property is worth, may be eligible for a principle reduction.
  • TAP-Transitional Assistance Program: Provides a payment of up to $5,000 to help homeowners, who cannot retain their home transition into new housing.

The Keep Your Home California program applies to primary mortgages in first position only. Second mortgages or home equity lines of credit are not eligible for Keep Your Home California programs. The property must be owner occupied and located in the state of California. The loan balance on the first mortgage is below $729,750. The homeowner(s) cannot be in bankruptcy while applying for Keep Your Home California Program.

Will you be the next success story?
To find out more about these four programs, or to set up an appointment with a housing counselor who can discuss these programs with you, contact ForeclosureHelpSCC by calling us at (408) 293-6000. You can also email us at help@foreclosurehelpscc.org or visit our website: www.foreclosurehelpscc.org.

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

Keep Your Home California: How Does It Work?

By Aurora Olivares, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC

Have you heard of the Keep Your Home California program? Are you unsure how the program works to help struggling homeowners avoid preventable foreclosures? A few homeowners I’ve worked with here in the Bay Area are good examples of how Keep Your Home California works.

Meet Ron.

Earlier this year I received a call from Ron. He had medical issues that prevented him from working full time. He drew from his 401K to pay medical bills while he recuperated. During this time, Ron fell behind on his mortgage payments. Ron regained his health and was back to his old self with a steady income but was unable to catch up on the $10,000 in delinquent mortgage payments from when he was ill and fell behind on his mortgage. After struggling to reach an agreement with his mortgage company, he heard about the Keep Your Home California program and called to set up a counseling appointment.

I met with Ron and after learning more about his situation, I determined that he was an ideal candidate for the Mortgage Reinstatement Assistance Program (MRAP). Ron lived in the property with the past due payments, he was not in bankruptcy, had a loan balance under $729,750 and had an affordable payment after overcoming his medical hardship.

I worked with Ron to submit an application for the Mortgage Reinstatement Assistance Program through Keep Your Home California. After submitting the necessary paperwork, meeting investor guidelines, and working closely with the Keep Your Home California processing team, Ron was funded $10,000 to bring his mortgage current. Through this program, Ron was able to remain in his home.

In our next post, I’ll discuss a homeowner who successfully used the Unemployment Mortgage Assistance Program, which is also part of Keep Your Home California. In the meantime, I’m including program information below.

Here are some quick facts about the program:
Your lender/servicer must participate in the program in order to qualify for the Keep Your Home California funds. Each lender/servicer can participate in as little as one or in all four of the Keep Your Home California programs.

Is my bank or servicer participating in Keep Your Home California?
Check this list: Servicers Participating in Your Home California

There are 4 award programs:

  • UMA-Unemployment Mortgage Assistance Program: Is designed to assist unemployed homeowners who are receiving EDD benefits.
  • MRAP-Mortgage Reinstatement Assistance Program: This program can help by reinstating past due payments.
  • PRP-Principal Reduction Program: Homeowners who owe more than their property is worth, may be eligible for a principle reduction.
  • TAP-Transitional Assistance Program: Provides a payment of up to $5,000 to help homeowners, who cannot retain their home transition into new housing.

The Keep Your Home California program applies to primary mortgages in first position only. Second mortgages or home equity lines of credit are not eligible for Keep Your Home California programs. The property must be owner occupied and located in the state of California. The loan balance on the first mortgage is below $729,750. The homeowner(s) cannot be in bankruptcy while applying for Keep Your Home California Program.

Will you be the next success story?
To find out more about these four programs, or to set up an appointment with a housing counselor who can discuss these programs with you, contact ForeclosureHelpSCC by calling us at (408) 293-6000. You can also email us at help@foreclosurehelpscc.org or visit our website: www.foreclosurehelpscc.org.

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

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

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.

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.