Helpful Resources if You’re Facing Foreclosure By Foreclosure Help SCC

By Sean Coffey, MPA, Program Manager of ForeclosureHelpSCC

As 2012 draws to a close, it’s worth taking a quick snap-shot of the past year.  Pete Carey wrote earlier this week in the San Jose Mercury News about the reduction in foreclosures during the month of November, and we hope that this trend continues.

We also want to highlight a few blog postings written for homeowners by the certified housing counselors who staff the ForeclosureHelpSCC program:

Time Sensitive issues for homeowners:

Independent Foreclosure Review:  The deadline for this program is December 31, 2012.  To learn more about this program (eligible homeowners could receive $500 to $125,000 plus lost equity), visit our earlier blog postings:

California Foreclosure Refund:  Also designed for homeowners who dealt with an improper foreclosure, but this program is limited to the big five banks.  The deadline for this program is January 18, 2013.  For more information, read our blog on it: California Foreclosure Refund Program, Part of the Attorney General Settlement

Keep Your Home California: Unemployment Assistance Program.  Aurora Olivares, one of the housing counselors who staffs the Foreclosure Help program, wrote an excellent overview of this program: “Unemployment Mortgage Assistance Program, Part of Keep Your Home California: How Does It Work?”  With recent estimates that 400,000 Californians could lose their unemployment benefits unless Congress extends them, it is particularly important for homeowners who are unemployed to get their applications in NOW while they are still receiving unemployment.  A homeowner WILL NOT qualify for Keep Your Home California Unemployment Assistance program unless they are receiving or are approved for unemployment benefits.

Mortgage Debt Forgiveness Act: This has not yet been extended, but we are hopeful that it will be tied into the current negotiations about the fiscal cliff.  For more information about why this is so important, visit: “Foreclosures in San Jose and Sunnyvale: Three Reasons Time is Not on Your Side”

General Resources for Homeowners from our blog this year (A big THANK YOU to the certified housing counselors from Asian Inc, Neighborhood Housing Services of Silicon Valley, Project Sentinel, and SurePath Financial Solutions for writing these posts).

1) Credit Repair, Credit Issues, Rebuilding Your Credit, Pulling Your Credit Report:

2) How to work with your bank when you are seeking a modification:

3. Advantages of Working with a certified housing counselor from a HUD-approved agency:

4) Renting after a foreclosure or short sale:   Help with rental assistance after a foreclosure – What’s out there?

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.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org. Nuestros consejeros aprobados por HUD puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

What is a Credit Report and Why is it Important to You?

Why is a credit report important?Editor’s note: If you haven’t applied for the Independent Foreclosure Review yet, there is still time, but the deadline is December 31, 2012.  For more information, visit our blog: Independent Foreclosure Review Deadline is December 31, 2012. Learn How to Apply Here.  Spanish: La fecha límite para La Revisión Independiente de la Ejecución Hipotecaria es el 31 de diciembre 2012. Aprender a aplicar aquí!  Or visit the website: www.independentforeclosurereview.com, or call the program: 1-888-952-9105

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

A credit report is more than a collection of financial information and statistics. A credit report displays and represents your financial picture.   A credit report is an accounting of how you have handled your past finances and debt and is a gauge of how you will continue to do so in the future. The credit report determines if you are credit worthy or may be a credit risk to those who offer credit (also known as creditors).  The credit report helps creditors decide who gets credit or who does not.

If you have been financially responsible in the past and have good credit, you probably don’t think twice about credit.  It is just there for you whenever needed.    However, if you have no credit or poor credit, managing your daily financial life may be difficult.

WHAT IS IN A CREDIT REPORT?

If you have never applied for personal credit, you probably don’t have a credit report history.  But, if you have applied for and used credit in the past, a basic credit report consists of your name, current and recent addresses, Social Security Number, date of birth and current and previous employers.  The report also displays each credit account registered in your name,  the date the account was opened, the credit limit on a credit card or loan, the payment terms, the balance owed, the monthly payment amount, and a record of your payment history (i.e., how many times you paid on time or were late).  This information is contained in your credit report even if you personally have not applied for credit but have agreed to be a co-signer or authorized user on someone else’s credit account.

TIP:   If you are a co-signer on a credit card or loan account, you are responsible for the debt if the other party fails to keep the monthly payments current.  If you are an authorized user, you are not responsible for the monthly payments or the balance due if the account is not kept current.  So, be VERY careful about agreeing to be a co-signer on an application for credit.

A credit report also lists each time you have applied for credit – these are known as ‘inquiries.’  By viewing the ‘inquiries’, creditors can determine if you have applied for too much credit or have been recently approved for additional credit. If the number of applications or approvals is too high, creditors may deny you if it appears you are trying to acquire too much credit too quickly.

TIP:  This can happen to new homeowners or young adults when they want to decorate a new home or apartment.  If you apply for and are denied credit, this may have a negative impact on your credit report and credit score.

WHAT IS NOT IN A CREDIT REPORT?

Information NOT contained in a credit report consists of checking and saving account balances, bankruptcies that are more than 10 years old, charged-off debts or debts placed for collection that are more than seven years old, gender, ethnicity, religion, political affiliation, medical history or criminal records.  Judgments generally remain on a credit report for 7 years from the date filed, whether the debt was paid or not.  If paid, the judgment entry changes from UNSATISFIED to SATISFIED but still remains for the required length of time.  Unpaid tax liens remain indefinitely.

NO CREDIT?  WHAT SHOULD YOU DO?

In the everyday world of credit, there are two types of credit cards and loans – Secured and Unsecured.

SECURED CREDIT CARD If you have poor credit or no credit and know you will have a need, you may want to apply for a secured credit card.   A secured credit card is an account in which you deposit your own money (generally a minimum amount) to be used for future credit transactions.   A secured credit card gives you the ability to use the money (up to a certain amount) as a credit card – i.e. charge movie tickets or order a pizza – until you can apply for a less restrictive unsecured credit card.  Most secured credit cards do not allow the total amount of money deposited into the account to be consumed by charge transactions.

The creditor retains a portion of the money as a ‘cushion’ to cover unexpected events, such as non-payment.  If your charges exceed the allowed amount, there can be substantial fees and penalties applied.  If you don’t keep the account in good standing, the creditor can deny future credit transactions you attempt to do.  Not a happy thought if you want to treat a friend to lunch and your card is denied!  In some cases, if the past due amount becomes too high; the account may be closed or suspended.  The account will continue to accrue interest charges, fees and may even be subject to collection action.  Most secured credit cards also carry annual expense fees.

TIP:   Secured credit cards physically look the same as unsecured credit cards.  There is no way of telling that your card is a secured card.  After a period of time if you have established a positive payment history and adhered to the secured credit card terms, you may apply for an unsecured credit card or loan.  There is no specific time period to do this.  Just be cautious about applying for too many cards.

SECURED CREDIT LOAN: This type of loan is used for high dollar purchases that cannot be paid in full each month – i.e. the purchase of a car or house.  This type of loan is for a specific dollar amount and time period.  If the loan payments are not kept current, the owner of the loan can repossess or take back the item – i.e. the car.  In this case, the car is security for the debt.   Generally without exception, a mortgage loan is secured by the property.  If the mortgage payments are not made, the mortgage holder will take the property in a foreclosure sale.

UNSECURED CREDIT CARD:   An unsecured credit card is a line of credit that is available to you with no restrictions (up to the credit limit), as long as the account is in good standing.   For example, if you charge the purchase of clothing on your unsecured credit card and you don’t pay the full or minimum amount by the Due Date,  the creditor will not repossess or take back the clothes.  However, the account could still be assessed fees and penalties and may be closed or suspended if the matter is not resolved.  Any past due payments will be recorded on your credit report.

UNSECURED CREDIT LOAN:    This type of loan can be for any amount and time period, but is generally not a standard product offered by creditors for large loan amounts.   Creditors want their loans secured by an item of value if there is a default on the account.  The best use of this loan type would be for personal loans among family members or friends where, if payments are not made, no property is attached to the loan and therefore there is no repossession.

TIP:  For most secure and unsecured credit card accounts, it is recommended that the full amount charged be paid in full each month to avoid interest charges and to assist in building a good credit history.  Keeping  any loan in good standing is a good idea.

HOW TO GET A COPY OF YOUR CREDIT REPORT?

On November 22, 2003, through the Fair and Accurate Transaction (FACT) Act, consumers were given the right to obtain a free copy of their credit report every 12 months from each of the 3 major credit bureaus.  These credit bureaus collect and analyze credit transactions for their clients (AKA creditors) i.e., banks, credit unions, and retail establishments for example.    The 3 major bureaus are:  Experian (www.experian.com, 1-888-397-3742), TransUnion (www.transunion.com, 1-800-916-8800), and Equifax (www.equifax.com, 1-800-685-1111).

To obtain a copy of your credit report or reports, you can contact the credit bureaus directly, visit their websites, or use the website:  www.annualcreditreport.com .  This website provides access to each credit bureau report.  A consumer can apply online for a single report or for all 3 reports at the same time.  There are companies who will help you track the contact and accuracy of your credit report for a fee.

TIP:  It is recommended that a consumer stagger their credit report requests every 4 months between each bureau.  In most cases, the same credit information is on each bureau’s report, but sometimes in a slightly different format.  By staggering the reports, a consumer can track activity over the time period as well as the contact of each report.

TIP:  Each time YOU look at your own credit report, there is no ‘inquiry’ activity recorded. However, each time you apply for credit through a third party, there is an ‘inquiry’ recorded.  So, if you apply for too much credit, the next third party you apply to will see the ‘inquiry’ activity and possibly may deny the application for credit due to excessive applications.  Also, there is a chance that the volume of applications may affect your FICO score.  BE CREDIT SMART!

WHAT IS A FICO CREDIT SCORE AND WHY IS IT IMPORTANT TO YOU?

Attached to each report is a credit score known as a FICO (Fair Issac Corporation) score.  The FICO score can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.  Your goal is to have the highest number possible based on your use of credit and the history contained in your credit report.  Each one of the credit bureaus has their own FICO score criteria.  A FICO score may differ between the 3 credit bureaus because not all creditors submit to each bureau.

A FICO score is a combination of many credit associated items.  Based on the type of credit, a FICO score is made up of the following percentages:

  • 35% for history;
  • 15% for length of credit;
  • 10% for newly acquired credit;
  • 10% for types of credit; and
  • 30% for amount of debt owned on credit cards and loans.   A few examples of what can lower a FICO score are:  late payments, too high of credit used against credit limit, past due payments, too many credit cards, judgments, collections, or too many applications for credit.

It is possible to obtain your FICO score by contacting each credit bureau for their process or at the www.annualcreditreportcom website, but there is a fee.  However, if you pay a credit reporting and tracking agency, you may be able to obtain the FICO score free of charge.

If you discover errors within your credit report, you should contact the providing bureau directly.  If they don’t correct the errors, you can contact the Consumer Financial Protection Bureau (CFPB) at 1-855-411-2372 or TTY/TDD 1-855-729-2372 and/or file a complaint with the CFPB at  http://www.consumerfinance.gov/blog/headline-now-accepting-credit-reporting-complaints/ ; or send a letter to Consumer Financial Protection Bureau, P. O. Box 4503, Iowa City, Iowa 52244.

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.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org. Nuestros consejeros aprobados por HUD puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio: www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

5 Programas importante para los propietarios de California

Programs to help with foreclosure

Para los duenos de vivienda en el estado de California que están preocupados de su hipoteca, hay 5 programas que debe conocer.

1. Acuerdo del Fiscal General (Attorney General Settlement)
Visita: Sitio del Fiscal General que vigila el cumplimiento: www.californiamonitor.org. Email: CAMonitor@doj.ca.gov.
Visita: www.nationalmortgagesettlement.com
Expiración: La expiración del reembolso de la ejecución hipotecaria es 18 de enero 2013

El acuerdo con Chase, Ally / GMAC, Bank of America, Citibank y Wells Fargo incluye 3 partes:

A)
$ 3 billones en refinanciamiento para los propietarios de viviendas que tienen una propiedad que vale menos del balance que se debe en la casa

B) $ 17 billones en modificaciones de hipoteca, reducciones principales, y las ventas cortas

C) $ 1.5 billones en reembolsos de exclusión para las personas que perdieron sus viviendas inapropiadamente entre 1 de enero de 2008 y el 31 de diciembre 2012 .  Para el programa de reembolso para la ejecución hipotecaria, puede recibir un formulario de solicitud por correo (se enviaron por correo a principios de este mes). Si usted no recibe una carta antes del 31 de octubre de 2012, o si usted tiene una dirección diferente ahora, póngase en contacto con el Administrador del Acuerdo Nacional (National Settlement Administrator ) al1-866-430-8358 o enviar un correo electrónico con su dirección postal actual para administrator@nationalmortgagesettlement.com . Una vez que reciba la carta en el correo, usted tendrá que completar el formulario y enviarlo por correo, o también se puede llenar en línea (pero necesitará el número de reclamo de la carta que recibió, así que no lo vaya a descartar). Más instrucciones: https://nationalmortgagesettlementclaim.com/. Para las otras dos partes de la solución (modificaciones de refinanciación y préstamos), usted puede contactar a su prestamista directamente para preguntar sobre su elegibilidad y preguntar sobre cuando el banco  a implementar estas opciones. Es un proceso de 3 años, y tendrá que ser paciente.

2. Bill de los Derechos de Propietarios (Homeowner’s Bill of Rights)
Visita: www.oag.ca.gov/hbor
Esta nueva ley restringe la doble vía ejecuciones hipotecarias, donde una ejecución hipotecaria ocurre al mismo tiempo que la solicitud de modificación está pendiente. Esta ley también garantiza a los propietarios un único punto de contacto con su prestamista, así como otras protecciones.  El Proyecto de Ley de los Derechos Propietarios entra en vigor el 1 de enero de 2013.

3. Revisión Independiente ejecución de una hipoteca (Independent Foreclosure Review)
Visita: www.independentforeclosurereview.com
Llame al: 1-888-952-9105
Fecha límite: 31 de diciembre 2012
La Revisión Independiente Ejecución de una hipoteca es un acuerdo entre las autoridades federales y 14 bancos e incluye una investigación sobre los modos que  procesaron las modificaciones y las ejecuciones hipotecarias en 2009 y 2010. Si un dueño de casa (casa principal) estaba en algún tipo de “acción de ejecución hipotecaria” con uno de los 14 bancos / administradores entre las fechas  del 1 de enero, 2009 a diciembre 31,  2010, y siente que fue indebidamente procesada, favor de completar la aplicación.  Si las revisiones encontrar el procesamiento indebido, un propietario podría recibir una compensación de entre $1,000 a $125, 000. Una acción de ejecución hipotecaria no significa necesariamente que la casa fue vendida, el propietario podría seguir viviendo en el hogar.

4. Conserva Tu Casa California (Keep Your Home California)
Visita: www.conservatucasacalifornia.org y www.keepyourhomecalifornia.org
Llame al: 1-888-954-5337
California recibió casi $2 mil millones en fondos para ayudar a los propietarios de California elegibles evitar ejecuciones hipotecarias evitables. El programa Keep Your Home California se compone de 4 opciones que ayudan a los propietarios de ingresos bajos y moderados conservar sus hogares si han sufrido una dificultad financiera, como el desempleo,  enfermedad, o están en riesgo de incumplimiento debido a una economía dificultades, junto con una disminución severa en el valor de su casa.

5. Haciendo Tu Casa Asequible (Making Home Affordable HAMP and HARP programs)
Visita: www.makinghomeaffordable.gov (Spanish)  or www.makinghomeaffordable.gov (English)   Llame al: 888-995-4673
Propietarios de hogar pueden reducir sus pagos mensuales de la hipoteca y modificar sus préstamos a más bajas tasas estables de hoy. Para los propietarios para los que la propiedad de vivienda ya no es asequible o deseable, el programa puede proporcionar una salida que evite una ejecución hipotecaria.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293 a 6000, o visite nuestro sitio: www.foreclosurehelpscc.org. Nuestros consejeros aprobados por HUD puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293 a 6000, o visite nuestro sitio: www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

October 20th Foreclosure Prevention Resource Fair Agenda

The ForeclosureHelpSCC Consortium is sponsoring a FREE foreclosure prevention resource fair on October 20th at Overfelt High School.  Housing counselors from HUD-approved agencies will be on-site to meet with homeowners on a first-come, first served basis from 9:00am to 2:15pm.  For more information, call (408) 293-6000, or visit our event webpage.  In addition to housing counseling, homeowners can attend and hear practical advice on a variety of topics related to housing.  The event is free and open to the public.

Agenda for Foreclosure Fair

9:30AM  Facing Foreclosure? What Steps Should you Take and Keep Your Home California

10:15AM Legal Issues You Need to Know About

11:15AM Presentation about the ForeclosureHelpSCC Program

11:45AM Roundtable With Representatives from Bank of America, Chase, Citibank, Wells Fargo

12:30PM Bankruptcy and Tax Issues You Need to Know About:

1:30PM Renters Rights and Renting after a Foreclosure or Short Sale

2:30PM Buying Again: What Do You Need to Know and Do Now to Become a Homeowner Again

Day Concludes

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

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