Bank of America Corp. is near a settlement to pay $8.5 billion to mortgage investors who claim the bank sold them fraudulent mortgage securities, The Wall Street Journal reports.
The mortgage securities in question, originally valued at $105 billion, contained home mortgages that faltered after the financial and housing crisis. Investors claim they were misled by the mortgage securities packages, arguing the securities were highly rated despite being full of loans that had borrowers with questionable credit.
The $8.5 billion payout would be the largest settlement by a financial services firm.
Wednesday, June 29, 2011
Saturday, June 25, 2011
How Long Is the Wait to Buy a House After Foreclosure?
Fannie Mae and Freddie Mac have a 3-year waiting period following a foreclosure, and a 2-year wait following a short sale, deed in lieu, or discharge or dismissal of bankruptcy. However, if you can justify that the circumstance for the foreclosure or bankruptcy occurred because of an illness or job loss, or other “extenuating circumstance”, that may help reduce the wait before you can buy a home again. But with no such extenuating circumstances, you may have to wait longer, even up to seven years following a foreclosure or four years after bankruptcy.
For loans insured by the Federal Housing Administration (FHA), borrowers with good credit afterwards also will, in general, have to wait 3 years after a foreclosure and 2 years after a bankruptcy is discharged.
Following a short sale, borrowers will have to wait 3 years to secure another FHA loan, however, there are plenty of exceptions. Borrowers will have to wait 3 years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.
“The key is to avoid the foreclosure,” Andrew Wilson, a spokesman for Fannie Mae. Nevertheless it smart thing to do is to contact a credit repair specialist and see if they can remove your short sale or foreclosure off your credit file. Creditors who report negative items on your file have to sollow specific procedures. With the overlaod, amount of foreclosures, short sales they have to deal with, they do not follow the procedures, so either a lawyer or credit specialists will be able to find out if the banks have not followed the procedures when filing foreclosure or a short sale against you, and if they have not followed the right step, a credit specialist will be able to take off your foreclosure or short sale.
Do not hesitate to contact us and we will let you know rapidly if you have recourse.
CALL 1-877-APPLYFREE
For loans insured by the Federal Housing Administration (FHA), borrowers with good credit afterwards also will, in general, have to wait 3 years after a foreclosure and 2 years after a bankruptcy is discharged.
Following a short sale, borrowers will have to wait 3 years to secure another FHA loan, however, there are plenty of exceptions. Borrowers will have to wait 3 years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.
“The key is to avoid the foreclosure,” Andrew Wilson, a spokesman for Fannie Mae. Nevertheless it smart thing to do is to contact a credit repair specialist and see if they can remove your short sale or foreclosure off your credit file. Creditors who report negative items on your file have to sollow specific procedures. With the overlaod, amount of foreclosures, short sales they have to deal with, they do not follow the procedures, so either a lawyer or credit specialists will be able to find out if the banks have not followed the procedures when filing foreclosure or a short sale against you, and if they have not followed the right step, a credit specialist will be able to take off your foreclosure or short sale.
Do not hesitate to contact us and we will let you know rapidly if you have recourse.
CALL 1-877-APPLYFREE
Monday, June 20, 2011
Beware Scam Cheats Borrowers out of Mortgage Payments
Warn your home owner clients to beware of a scam growing in many parts the country that tries to trick home owners out of a month or two of their mortgage payments.
The Chicago Tribune referred to it as the “handoff rip-off” scheme, in which scammers send letters to borrowers informing them that a new company has assumed the management of their loans and to start making mortgage payments to the new company.
Many home owners aren’t familiar with the rules when it comes to the transfer of mortgage-servicing so they follow the letter's directions in sending their payments to the new company and could possibly lose thousands in mortgage payments.
Inform your home owner clients of mortgage-servicing transfer rules so they won’t be duped. For example, the law requires a company that provides a mortgage on behalf of the loan’s owner to send a "goodbye" letter notifying them that at a specific date their payment should be sent to a new company. Then, a week or so later, the home owner is legally to receive a second letter from the new servicer that provides mortgage payment information (their principal, interest, and escrow). Both letters should include the home owner's loan number, the Tribune article explains.
When in doubt, contact your original servicer to find out if the letter received is legit or fraud.
The scheme "works for maybe two months" because that is usually how long it takes for borrowers to realize they've been tricked, says Becky Walzak, a loan-quality assurance expert. "But if the bad guys are any good, they've taken in thousands of payments from thousands of people. They cash them, and they move on to the next batch of borrowers."
The Chicago Tribune referred to it as the “handoff rip-off” scheme, in which scammers send letters to borrowers informing them that a new company has assumed the management of their loans and to start making mortgage payments to the new company.
Many home owners aren’t familiar with the rules when it comes to the transfer of mortgage-servicing so they follow the letter's directions in sending their payments to the new company and could possibly lose thousands in mortgage payments.
Inform your home owner clients of mortgage-servicing transfer rules so they won’t be duped. For example, the law requires a company that provides a mortgage on behalf of the loan’s owner to send a "goodbye" letter notifying them that at a specific date their payment should be sent to a new company. Then, a week or so later, the home owner is legally to receive a second letter from the new servicer that provides mortgage payment information (their principal, interest, and escrow). Both letters should include the home owner's loan number, the Tribune article explains.
When in doubt, contact your original servicer to find out if the letter received is legit or fraud.
The scheme "works for maybe two months" because that is usually how long it takes for borrowers to realize they've been tricked, says Becky Walzak, a loan-quality assurance expert. "But if the bad guys are any good, they've taken in thousands of payments from thousands of people. They cash them, and they move on to the next batch of borrowers."
Monday, June 13, 2011
Joke: The Helicopter Ride
Bob and his wife Sandy went to the state fair every year,
And every year Bob would say,
'Edna, I'd like to ride in that helicopter'
Sandy always replied,
'I know Bob, but that helicopter ride is fifty bucks,
And fifty bucks is fifty bucks'
One year Bob and Sandy went to the fair,
and Bob said,
'Sandy, I'm 65 years old.
If I don't ride that helicopter, I might never get another chance'
To this, Sandy replied,
"Bob that helicopter ride is fifty bucks, and fifty bucks is fifty bucks'
The pilot overheard the couple and said,
'Folks I'll make you a deal. I'll take the both of you for a ride.
If you can stay quiet for the entire ride
and don't say a word I won't charge you a penny!
But if you say one word it's fifty dollars.'
Bob and Sandy agreed and up they went.
The pilot did all kinds of fancy maneuvers, but not a word was heard..
He did his daredevil tricks over and over again,
But still not a word...
When they landed, the pilot turned to Bob and said,
'By golly, I did everything I could to get you to yell out, but you didn't.
I'm impressed!'
Bob replied,
'Well, to tell you the truth,
I almost said something when Sandy fell out,
But you know,
"Fifty bucks is fifty bucks!'
And every year Bob would say,
'Edna, I'd like to ride in that helicopter'
Sandy always replied,
'I know Bob, but that helicopter ride is fifty bucks,
And fifty bucks is fifty bucks'
One year Bob and Sandy went to the fair,
and Bob said,
'Sandy, I'm 65 years old.
If I don't ride that helicopter, I might never get another chance'
To this, Sandy replied,
"Bob that helicopter ride is fifty bucks, and fifty bucks is fifty bucks'
The pilot overheard the couple and said,
'Folks I'll make you a deal. I'll take the both of you for a ride.
If you can stay quiet for the entire ride
and don't say a word I won't charge you a penny!
But if you say one word it's fifty dollars.'
Bob and Sandy agreed and up they went.
The pilot did all kinds of fancy maneuvers, but not a word was heard..
He did his daredevil tricks over and over again,
But still not a word...
When they landed, the pilot turned to Bob and said,
'By golly, I did everything I could to get you to yell out, but you didn't.
I'm impressed!'
Bob replied,
'Well, to tell you the truth,
I almost said something when Sandy fell out,
But you know,
"Fifty bucks is fifty bucks!'
Friday, June 10, 2011
Joke of The Week
Recently a rather high profile politician from a large western State who was foreign born misunderstood his wife when he said to her that their housekeeper wanted a raise". His wife, also nationally known in her own right said: "Screw her". It appears that there was some sort of misunderstanding as to what she meant by that.
Beware Short Sale Scams
Banks and distressed home sellers stand to lose more than $375 million this year from a short sale scam that has sellers and banks agreeing to sell homes at very undervalued prices, according to a new study by CoreLogic.
In discovering the short sale fraud scam, CoreLogic analyzed over 400,000 nationwide short-sale transactions in the last two years.
Here’s how the scam often works: Borrowers who are underwater or in financial distress are contacted, often by investors and sales people, then persuaded to sell the property in a short sale and at a low price. Then the banks accept the lowball offer, and the investors resell the house to legitimate buyers at a higher price and for a hefty profit.
65% of short sales resold within 6 months that net profits of 40% or higher were flagged “suspicious,” which means there is a high likelihood that the lender accepted a low ball offer, according to the CoreLogic study. These transactions often go undetected by banks.
In discovering the short sale fraud scam, CoreLogic analyzed over 400,000 nationwide short-sale transactions in the last two years.
Here’s how the scam often works: Borrowers who are underwater or in financial distress are contacted, often by investors and sales people, then persuaded to sell the property in a short sale and at a low price. Then the banks accept the lowball offer, and the investors resell the house to legitimate buyers at a higher price and for a hefty profit.
65% of short sales resold within 6 months that net profits of 40% or higher were flagged “suspicious,” which means there is a high likelihood that the lender accepted a low ball offer, according to the CoreLogic study. These transactions often go undetected by banks.
Lower Priced Home Values Hit The Hardest
Lower priced homes have been harder hit than higher priced homes in this housing market, according to a study by Harvard University’s Joint Center for Housing Studies.
High-priced homes have lost 38% of their value since values peaked in 2006. Lower priced homes, on the other hand, have dropped 63% since peaking in 2007.
Why such a difference? It’s because lower priced homes appreciated much more before reaching their peak and therefore had further to drop than higher priced homes.
For example, in San Francisco, lower end homes nearly tripled in price before peaking. High-end homes, meanwhile, did not even double before reaching its peak. McCue attributes this partially to lenders making more loans available to lower income households during the housing peak days, which increased demand and prices.
Foreclosures have also plagued low-income areas, more so than higher income areas, according to the study. Foreclosures in low-income neighborhoods are more than double that of high-income neighborhoods, according to the Joint Center for Housing Studies.
High-priced homes have lost 38% of their value since values peaked in 2006. Lower priced homes, on the other hand, have dropped 63% since peaking in 2007.
Why such a difference? It’s because lower priced homes appreciated much more before reaching their peak and therefore had further to drop than higher priced homes.
For example, in San Francisco, lower end homes nearly tripled in price before peaking. High-end homes, meanwhile, did not even double before reaching its peak. McCue attributes this partially to lenders making more loans available to lower income households during the housing peak days, which increased demand and prices.
Foreclosures have also plagued low-income areas, more so than higher income areas, according to the study. Foreclosures in low-income neighborhoods are more than double that of high-income neighborhoods, according to the Joint Center for Housing Studies.
Fannie Revamps Rules on Delinquent Loans
Fannie Mae announced this week new rules that will require mortgage servicers to act more quickly and consistently in helping troubled home owners avoid foreclosure.
Fannie told servicers they must strive to build a “strong customer service relationship,” better understand why the borrower is missing payments, and educate them on ways to prevent foreclosure.
"We want home owners to be able to understand their options when facing foreclosure, and we want servicers to reach home owners early in the process, communicate frequently and clearly, and help home owners avoid foreclosure," says Jeff Hayward, senior vice president of Fannie Mae’s national servicing organization.
Also among the revamped guidelines, Fannie told servicers they will be required to contact home owners verbally and in writing within 120 days after a loan first becomes delinquent. They will need to try to complete a loan modification or other option that keeps the borrower in their home or helps the borrower avoid the foreclosure process.
If foreclosure is unavoidable, servicers will need to follow a clear timeline and must begin the foreclosure process once a loan has been delinquent for more than 120 days. Servicers also must make it clear when a property in the foreclosure process will be sold.
Fannie told servicers they must strive to build a “strong customer service relationship,” better understand why the borrower is missing payments, and educate them on ways to prevent foreclosure.
"We want home owners to be able to understand their options when facing foreclosure, and we want servicers to reach home owners early in the process, communicate frequently and clearly, and help home owners avoid foreclosure," says Jeff Hayward, senior vice president of Fannie Mae’s national servicing organization.
Also among the revamped guidelines, Fannie told servicers they will be required to contact home owners verbally and in writing within 120 days after a loan first becomes delinquent. They will need to try to complete a loan modification or other option that keeps the borrower in their home or helps the borrower avoid the foreclosure process.
If foreclosure is unavoidable, servicers will need to follow a clear timeline and must begin the foreclosure process once a loan has been delinquent for more than 120 days. Servicers also must make it clear when a property in the foreclosure process will be sold.
3 Seller Tips to Stay Ahead of Your Competition
Pricing a home competitively from the beginning is important. "Your largest number of showings will occur in the first two to three weeks. The (multiple listing service) systems and the Internet tend to drive the majority of showings. That’s why real estate experts stress that it’s important sellers get a competitive, realistic price from the beginning.
Consider sweetening the deal. Sellers may be able to lure more buyers by offering some extra incentives, whether that’s leaving some upplinces, dryer, washing machine, flat screen TV, paying closing costs, buying down the rate, home warranty etc. The better your offer, the quicker you can sell.
Make sure the home is show-ready and in move-in condition. In smaller homes, for example, clutter can mean the difference between cozy and cramped, experts say. Be sure the sellers keep homes clean and clear of clutter, particularly kitchen and bathroom countertops that tend to accumulate personal items that can hamper showing the home’s features. Also make sure that you have curb appeal, if not buyers won't be interested in looking inside your home, if they drive by and your exterior is not appealing.
However, make sure sellers don’t go to the other extreme and clear away too much.
"Don't neutralize it so that it's sterile," says Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., adding that small mementos and photos help make a house feel like a home.
Real estate experts also stress the importance of sellers’ getting a home in move-in condition--such as fixing all repairs and replacements--before it is even listed.
"From a presentation standpoint, you want them to feel it's turnkey -- ready to go," says Mark Ramsey, broker with the Ramsey Group/Keller Williams Realty in Charlotte, N.C. "Because your competition is doing that. In this market, it's not just a price war but a beauty contest at the same time."
Consider sweetening the deal. Sellers may be able to lure more buyers by offering some extra incentives, whether that’s leaving some upplinces, dryer, washing machine, flat screen TV, paying closing costs, buying down the rate, home warranty etc. The better your offer, the quicker you can sell.
Make sure the home is show-ready and in move-in condition. In smaller homes, for example, clutter can mean the difference between cozy and cramped, experts say. Be sure the sellers keep homes clean and clear of clutter, particularly kitchen and bathroom countertops that tend to accumulate personal items that can hamper showing the home’s features. Also make sure that you have curb appeal, if not buyers won't be interested in looking inside your home, if they drive by and your exterior is not appealing.
However, make sure sellers don’t go to the other extreme and clear away too much.
"Don't neutralize it so that it's sterile," says Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., adding that small mementos and photos help make a house feel like a home.
Real estate experts also stress the importance of sellers’ getting a home in move-in condition--such as fixing all repairs and replacements--before it is even listed.
"From a presentation standpoint, you want them to feel it's turnkey -- ready to go," says Mark Ramsey, broker with the Ramsey Group/Keller Williams Realty in Charlotte, N.C. "Because your competition is doing that. In this market, it's not just a price war but a beauty contest at the same time."
Friday, June 3, 2011
Does Your Lender Own Your Mortgage?
Delinquent home owners are finding a wild-card in saving their home from foreclosure. In court, more home owners are successfully arguing that their mortgage companies can’t prove they own the loan and don’t have the right to foreclose on them.
The Wall Street Journal reports: “In some cases, borrowers are showing courts that banks failed to properly assign ownership of mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say that lenders backdated or fabricated documents to fix those errors.”
In a few cases, home owners have even had their foreclosures reversed as courts blame lenders’ sloppy paperwork.
Source: “Banks Hit Hurdle to Foreclosures,” The Wall Street Journal (June 1, 2011)
The Wall Street Journal reports: “In some cases, borrowers are showing courts that banks failed to properly assign ownership of mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say that lenders backdated or fabricated documents to fix those errors.”
In a few cases, home owners have even had their foreclosures reversed as courts blame lenders’ sloppy paperwork.
Source: “Banks Hit Hurdle to Foreclosures,” The Wall Street Journal (June 1, 2011)
Thursday, June 2, 2011
Tiger still highest-paid athlete
The top 10:
1. Tiger Woods, $75 Million
2. Kobe Bryant, $53 Million
3. LeBron James, $48 Million
4. Roger Federer, $47 Million
5. Phil Mickelson, $46.5 Million
6. David Beckham, $40 Million
7. Cristiano Ronaldo, $38 Million
8. Alex Rodriguez, $35 Million
9. Michael Schumacher, $34 Million
10. Lionel Messi, $32.3 Million
•See more athletes
Full list: The world’s highest-paid athletes
1. Tiger Woods, $75 Million
2. Kobe Bryant, $53 Million
3. LeBron James, $48 Million
4. Roger Federer, $47 Million
5. Phil Mickelson, $46.5 Million
6. David Beckham, $40 Million
7. Cristiano Ronaldo, $38 Million
8. Alex Rodriguez, $35 Million
9. Michael Schumacher, $34 Million
10. Lionel Messi, $32.3 Million
•See more athletes
Full list: The world’s highest-paid athletes
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