Loan Modification

Option Arm Adjustable Rate Mortgage Resets in 2011 Predicted to Skyrocket

by julie on December 15, 2010

Mortgage Resets 2011

Option Arm mortgages, including what is commonly called “pick a pay” mortgages default rate are predicted to skyrocket in 2011. According to Credit Suisse, many Option Arm mortgages are to re-cast in 2011, rendering thousands of homeowners with significantly higher mortgage payments. In San Diego option arm mortgages were common between 2006 and 2007, many now will be facing unaffordable mortgages. Since most lenders are not acting to modify mortgages, and generally string homeowners along until the foreclosure happens, we are suggesting to take action now, before it re-sets or before you have to default.

Your options are:

Forensic Loan Audit (to gather evidence about your loan)
Short Sale in San Diego
Private Lawsuit (when the fraud is found, and 90% of all mortgages have major fraud in them)
Class Action Lawsuit

Take action before it’s too late. Call us at (760) 512-0438 or (619) 631-4546 to get started.

FBI Gets Involved in Investigating 14 Lenders for Mortgage Fraud

by julie on October 6, 2010

Mortgage Fraud Becoming Apparent – FBI Looking into Lender Fraud

According to a CNN report, the FBI is looking into potential mortgage fraud and has opened criminal investigation of 14 different lenders relating to the mortgage meltdown. Complaints of mortgage fraud has been filed, but the FBI would not identify the companies. The chief of the FBI economic crimes unit Neil Power, attributed the increase “… greed.” “On insider trading, we’re looking in some cases at whether executives were aware that the value of their holdings would be going down and the executives traded on that information,” “On accounting fraud, we’re looking at housing developers who may have reported cash reserve accounts to reflect falsely inflated values,” Powers told CNN.

Power and other senior officials said the number of suspicious activity reports they review for potential investigation skyrocketed from 3,000 in fiscal year 2003 to about 35,000 in 2006, to 48,000 in 2007 and up from there exceeding 60,000 in 2008 and more in 2009.

The FBI said it investigates only cases involving losses of $500,000 or more, and last year 56 percent of all cases had losses of more than $1 million.

In light of the recent JP Morgan Chase, Ally Bank, Bank of America and other lender scandals, lender fraud is becoming more apparent.

What went on behind the scenes, including selling the mortgages as mortgage back securities, splitting the mortgage from the Note, and other activity may result in class action and other litigious activities being filed across the nation by homeowners.

Short Sales Rising 34% – Foreclosures 43% of all California Home Sales

by julie on October 1, 2010

San Diego short sales are not going away.

According to a recent report between short sales and foreclosures in California – 43% of those sales fit in either the short sale or foreclosure category. Short sales rose 34% in August.

The number of distress homeowners is not going away, nor is this market, any time soon. With the recent fraud uncovered by the lender’s part, foreclosing illegally, forging documents, etc we will see a rise in forensic loan audits, class action lawsuits, and homeowners fighting back against the banks. When banks are not playing fair, forget the loan modification since you will still be in that same contract. Either get out of the contract with a short sale or fight back through a class action lawsuit or other remedy. For more information on fighting back call our Oceanside office today.

Nearly one in four home sales a foreclosure

Foreclosure sales down from the first quarter, new data from RealtyTrac
by Lucy Nicholson / REUTERS

A home for sale is seen in Santa Monica, Calif. Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, RealtyTrac said Thursday.Reuters

NEW YORK — Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, putting the market on pace to work through distressed properties in about three years, RealtyTrac said.

Banks stepped up foreclosures through the summer and will take over a record 1.2 million homes this year, up from around 1 million last year and about 100,000 in 2005 before the housing bust, according to a forecast from the real estate data company.

Foreclosed homes accounted for 24 percent of all second-quarter sales, at an average price discount of more than 26 percent compared with homes not in the foreclosure process.

“This is the kind of volume of activity that we need to see for the market to heal,” RealtyTrac senior vice president Rick Sharga said in an interview.

“Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there,” he said.

The share of foreclosure sales fell from the first quarter when nearly one in three sales was a foreclosed house sold at an average 27 percent discount, RealtyTrac said in the report released on Thursday.

“In a normal market you’re looking at foreclosure sales accounting for low single-digit percentages, probably less than 5 percent of all sales,” said Sharga. For the next few years, “it’s probably going to be somewhere between one-quarter and one-third of all sales.”

Overall housing sales likely will total 4 to 4.5 million a year during this time, he said.

It will take those years to resell homes lost by owners whose jobs or wages were cut or who took out high-risk, unaffordable mortgages. Banks will also need to sell homes from owners who walked away owing more on their mortgage than the house was worth.

Tax credit expires. Julie blogs at
www.JulieFontaine.com as well.

Unemployment at 9.6 percent, and average home prices that are about 28 percent below 2006 peaks, are keeping the U.S. housing market from staging much of a recovery.

A burst of spring sales to buyers seeking up to $8,000 in tax credits has been followed by a sales plunge after the incentive ended on April 30.

Distressed homes, or ones in foreclosure or short sales, rose to 34 percent of all existing houses sold in August from 32 percent in July and 31 percent a year ago, the National Association of Realtors said last week.

Sales volume rose overall in the second quarter, still boosted by the tax credit.

A total 248,534 properties in some stage of foreclosure — default, scheduled auction or REO — was sold to third parties, up about 5 percent from the first quarter though down 20 percent from the second quarter 2009, according to RealtyTrac.

“Ironically, the higher the percentage of homes that are sold that are distressed properties, and the bigger the number, the quicker we’ll get through this housing downturn,” said Sharga.

Banks sold more than 151,000 homes they owned, up 3 percent from the first quarter but down 28 percent from a year ago. These REOs were 15 percent of total home sales, down from 19 percent in the first quarter and about 29 percent a year ago.

Nevada, Arizona, California, among the biggest boom-and-bust states, had the highest share of foreclosure sales from April to June. About 56 percent of all Nevada sales, 47 percent in Arizona and 43 percent in California were foreclosed homes.

JP Morgan Chase Caught in Fraud Suspends 56 Thousand Foreclosure Cases

by julie on September 30, 2010

The State Attorney Generals are now starting to take notice of some of the lender fraud and servicer fraud by JP Mortgan Chase and GMAC, both who have been caught forging signatures, forging foreclosure documents, and forclosing as the servicer rather than the note holder (illegal!).

For that reason we are not encouring EVERYONE to have an in depth loan audit done, including a forensic loan audit and a securitization loan audit. The sercuritization audit is especially revealing, since it traces how your loan may have been put in a mortgage backed security and sold off out in wall street even after the pool was closed. All kinds of fraud is coming out of the woodwork.

The homeowner has several choices after completing the forensic loan audit, including in San Diego. One would be to stay in the fraudulent contract and just negotiate a loan modification. But if someone ripped you off do you still want to do business with them? We wouldn’t. You could also use this do to do a Short Sale, and in San Diego this paperwork can be used to facilitate the terms and conditions of the sale, but you will still lose the house and everything you invested in it. Lastly you can fight for your rights. One program that we are aware of includes a Class Action Lawsuit, another would be in assisting you to sue your lender.

Fraud is fraud. If you found fraud in your loan it is worth using against the lender. After all it is shown they will stoop to any level to get your house – including forging documents and forging signatures -sometimes even yours!

J.P. Morgan Chase freezes 56,000 foreclosures
By Ariana Eunjung Cha | September 29, 2010
Washington Post

J.P. Morgan Chase issued a freeze on 56,000 foreclosures on Wednesday, acknowledging that some employees may have signed off on documents submitted in support of them without proper review.

Chase spokesman Tom Kelly said the company has requested that the courts not enter judgments in pending matters until the company has had time to re-examine the filings “to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required.”

“While Chase does not expect find any factual problems and that customers have been harmed, but if we do find any cases we will take appropriate action,” Kelly said.

In May, a Chase employee named Beth Ann Cottrell said in a sworn deposition that she and her team signed off on up to 18,000 foreclosure affidavits and other documents a month without reviewing them thoroughly.

Another mortgage company, Ally Financial–the nation’s fifth largest lender–on Sept. 20 halted evictions and resale of repossessed homes in 23 states. Jeffrey Stephan, a document processor for the company, admitted that he had signed off on 10,000 pieces of foreclosure paperwork a month without reading them.

State attorneys in at least nine states have announced investigations into the matter.

Going Direct with Bank for Modification – 22% of Mortgages Default – San Diego

by Fred on September 28, 2010

Mortgage modifications in San Diego and nationwide under the government’s HAMP or Home Affordable Modification Program have resulting in about 11% of the modifications falling two months behind in their payments in San Diego and elsewhere, according to a banking regulators’ report issued in September. Lender-direct modifications result in more than 22% of San Diego loans redefaulted. The difference between the HAMP and non-HAMP modification known: HAMP modifications reduce a borrowers’ monthly payment by an average of $608, while bank modifications lower it only by $307, including in San Diego. “There is a correlation between sustainability of payment and the reduction in the payment,” said Joe Evers, deputy comptroller at the Office of the Comptroller of the Currency, which put out the report along with the Office of Thrift Supervision.

Under HAMP, eligible borrowers can have their monthly payments lowered to 31% of their pre-tax income as long as its more profitable for the bank to modify the loan than to foreclose. Make note of this – while you may qualify if the bank/investor can make more money now by foreclosing, then it won’t matter if you qualify or not – they will just foreclose. The federal government pays servicers an incentive to participate in the program, but these incentives may not be enough. Also, proprietary bank modifications are outpacing HAMP adjustments by more than 2-to-1. Many troubled homeowners are falling out of the government program and 44.5% of them are receiving bank modifications. Housing counselors have been wary of direct bank modifications, mainly because there is not a lot of information about them. They caution homeowners to make sure they understand the terms of the adjustment. A Chase spokesman said HAMP is always the first program the bank considers for troubled borrowers “because it lowers the payment more than most other programs.” If they don’t qualify for HAMP, they are reviewed for a proprietary modification.

One small new condition that most banks are adding to the remodified mortgage/contract is that the homeowner will agree to waive all rights to legal remedies after the loan modification is signed. What does that mean? It means that if the bank has defrauded you in any way such as charging you illegal fees at closing which will cost you thousands of dollars extra over the life of the loan, you have just given up your legal rights to to rectify that fraud. Homeowner beware!!!

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