Truth in Foreclosure

Eleven state Attorneys General Write FHFA

The attorneys general from eleven states wrote a letter to the Acting Director of the FHFA to urge him to allow Freddie Mac and Fannie Mae to incorporate principal writedowns into their foreclosure-avoidance models.  Congress has also been pressuring the FHFA to allow them.

And Edward DeMarco, the Acting Director, has agreed; with the stipulation that Congress must first change the laws the govern FHFA, which is unlikely to happen especially in an election year.

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You probably haven’t heard much about the “Produce the Note” campaign since 2009 or so.  Well, it just made the news again this week as a Minnesota lawyer was sanctioned (and fined $50,000) by a judge for filing what he deemed as a “frivolous” lawsuit in an effort to get GMAC to prove they actually held a client’s note.

According to DSNews.com,

U.S. District Court Judge Patrick J. Schiltz has ordered William B. Butler of Butler Liberty Law, LLC to personally pay $50,000 to the court and pay an additional undetermined amount of legal costs incurred by counsel for MERS and its co-defendants.
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The Office of the Comptroller of the Currency and the Board of the Federal Reserve have initiated reviews on up to 250,000 foreclosures and foreclosure actions that happened in 2009 and 2010. The deadline to apply for an Independent Foreclosure Review is December 31, 2012.
According to DS News:

Independent foreclosure reviews are being instigated in two ways: (more…)

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Press release from The Federal Reserve Website

The Federal Reserve Board released action plans for supervised financial institutions to correct deficiencies in residential mortgage loan servicing and foreclosure processing. It also released engagement letters between supervised financial institutions and independent consultants retained by the firms to review foreclosures that were in process in 2009 and 2010.

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The Federal Reserve Board is overseeing a mandatory review of the foreclosure process that many of the nation’s biggest servicers put homeowners through over the last few years. They want to make sure homeowners were not financially harmed by the process itself. Of course there is normal financial harm that comes from a foreclosure, but many people were financially harmed by processes that took too long and systems that were not set up to handle the volume of foreclosures they had in process. And if they find you’ve been harmed, you could be financially compensated.
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Regardless of what you think about the Federal Reserve Board and what they’ve done for the country’s finances recently, they have mandated that many of the country’s largest mortgage servicers submit to reviews of their foreclosure processes. When this program initially started, it was scheduled to end at the end of April 2012 but has since been extended to December 31, 2012.

If you had a mortgage loan on your primary residence and believe you were financially harmed during the mortgage foreclosure process by any of the four servicers in 2009 or 2010, you can request an independent review and potentially receive compensation. Several servicers are required to make the independent reviews available to borrowers as part of their compliance with the April 2011 enforcement actions.

Eligibility for Review

Borrowers are eligible for an independent foreclosure review if they meet the following criteria:

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Once you receive the foreclosure sale notice, panic often sets in. You think you’re going to lose your home no matter what and the sheriff’s coming soon to put your family out on the street. These 10 strategies can help you delay the sale. Delaying the sale could get you the time you need to finish negotiating with the bank or let you plan a graceful move out of your home rather than an expedited one.

Note: The strategies below may work in certain circumstances. Make sure to run them by a lawyer before you implement them because some may actually make your situation or negotiating position worse if you use them. This is due to state laws or your specific situation. Remember…this IS NOT legal advice. It is legal information. Only licensed attorneys can provide legal advice.

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From a May 5, 2010 JP Morgan Chase Press Release

Chase plans multi-day, foreclosure-prevention events in eight markets to help struggling homeowners:

• Chase builds on success of one-on-one help for 3,200 customers in Florida
  
• Events complement 51 Chase Homeownership Centers

Building on its success in helping Florida homeowners, Chase today announced that it will host multi-day Homeowner Assistance Events exclusively for struggling Chase homeowners in eight major U.S. markets this year.

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If you’re severely underwater on your mortgage, it’s likely you’ve considered stopping your mortgage payments and letting the bank foreclose on you.  If so, you’re not alone by any stretch of the imagination.

My wife and I were in a similar position when we decided to stop paying the payments on an investment property we owned.  It was an excruciating decision considering we have ALWAYS paid our bills on time no matter what.  And now we we consciously choosing to not pay one of the most important bills we had.

So I understand what you’re going through…it’s a tough decision.  But I discovered a program today that (more…)

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Even after you lose your home at a foreclosure sale, you still have a couple ways you can get it back even after it has sold! And you have a few legal rights to be aware of as well.

Buy it Back

Your first option is to buy your house back from whoever bought it at auction. This is more likely to happen if it was your lender that bought the home back, but is possible even if it was someone else. You’ll probably need 3rd party financing (which may be difficult or impossible to get). Sometimes, your lender will refinance your purchase, though, so you should at least ask the question if you have the income to support the payments.

Right of Redemption

Some states also have a “statutory right of redemption” after a foreclosure sale. This is a period where you (as the previous homeowner) can repurchase the home by paying the total purchase price plus interest and any allowable costs to the person that bought your home at the sale Filing a bankruptcy can give you even more time to take advantage of your redemptions rights, but this varies from state to state. We recommend talking to a bankruptcy attorney if you have questions.

Military Service Has It’s Perks

Active duty military personnel have additional, specific rights regarding redemption periods and other foreclosure and credit-related issues. You should research the Soldiers and Sailors Civil Relief Act if you are or were in the military or called to active duty.

Legal Avenues

Under certain circumstances, a court can set aside the sale of your home. If your lender didn’t follow the correct procedures during the foreclosure process, including properly notifying you, you may be able to get the court to set the sale aside, which will make it so the sale never legally happened. If you think you may have a case like this, we recommend discussing your situation with a lawyer experienced in these matters. If you don’t know of a local lawyer like this, please check out the National Association of Consumer Advocates (http://www.naca.net).

Don’t Leave Your Equity Behind

Finally, if there was equity in your home after it was sold, you may be legally entitled to it. You should expect your lender to deduct appropriate fees for servicing your account and processing the closing of your loan, but go over every fee very carefully to make sure they make sense. Some lenders have been known to tack on fees simply to eat up all the equity so they don’t have to pay a homeowner what they’re owed. The process to obtain these funds varies from state to state. If you’re in this situation, we recommend talking to the clerk of the county court. Ask them what the process is. If they don’t know, contact your lender’s legal department or a local lawyer familiar with foreclosure law.

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