Scams can come in many shapes and sizes.  It could be the person who claims he can get you a loan modification, and then after you pay him, you never see him again.  It could be the investor who tells you to deed your property to him or a trust so he can find a buyer to flip the property to and cause you the greatest loss.

But, if you want to keep your property, you need to know no-one can guarantee a loan modification.  If they do, leave immediately because you are being scammed.  Lenders and their loan servicers are the only ones who can give you a loan modification.  Typically, all you need to do is contact your lender’s loss mitigation department or the U. S. Department of Housing and Urban Development, HUD at (800) 569-4287 and you can get a list of legitimate housing counseling agencies in your area.

While many people are able to get loan modifications on their own when they deal directly with their lender, many other seem to get nowhere.  Here at the Thorpe Law Firm, P.A., we typically see people who have tried to get a loan modification with no success.  The majority of cases we handle are for people who have not been able to get loan modifications on their own and a lawsuit has been filed against them and they are being foreclosed.  Through many years of experience, we have been able to help many people obtain loan modifications.  For others, we help them restructure their debts by filing a Chapter 13 bankruptcy.

Remember, the hiring of a lawyer is an important decision that should not be based solely upon advertisements.  Before you decide on a lawyer, you should check their qualifications and experience.  Also, you should check to see who is actually going to work on your case.

Technorati Tags: Foreclosure Scam, Loan Modification, Mortgage Foreclosure

The Helping Families Save Their Homes Act of 2009 (Pub. L. 111–22) provides a 90-day notice requirement and additional protections for tenants in foreclosed properties. Below you will find the major provisions outlined under Title VII, Protecting Tenants at Foreclosure Act of 2009.

- During the term of the lease, the tenant has a right to remain in the unit and cannot be evicted, except for actions that constitute good cause, such as failure to pay rent or damaging the property.

- If the lease ends in less than 90 days after the foreclosure sale, the new owner may not evict the tenant without giving the tenant at a minimum 90 days notice.

- At the end of the term of the lease, the new owner may terminate the tenancy if the new owner provides a 90-day notice.

- The new owner may terminate the tenancy if the owner will occupy the unit as a primary residence, and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice. This is the only exception to the rule that the tenant may not be evicted during the term of the lease.

It must be remembered that the tenant must not breach the lease.  In other words, the tenant must continue to pay the monthly rent payment and must keep the property in good repair as required by the lease .

The Tenant Protection Act was originally set to expire or “sunset” on December 31, 2012; Dodd-Frank changes that, and the Tenants Protection Act will now sunset on December 31, 2014.

Technorati Tags: Dodd Frank, Eviction, Foreclosure, Tenants

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You know that foreclosure defense attorney who is taking out mortgages on his clients’ homes?

Turns out he was twice sanctioned by the [Florida] Bar and they’re taking a look at this issue as we speak:

Peter Ticktin, whose license has been suspended by the Bar twice since 2009, told the Times that the second mortgage would take effect only if he succeeded in having the foreclosure dismissed and the homeowner’s loan reduced. He also said his firm never would foreclose on his own clients should they stop paying on their second mortgages.

Elizabeth Tarbert, the Bar’s ethics chief, declined to say whether the unusual payment arrangement detailed in the article violates bar rules governing conflicts of interest. Bar spokeswoman Francine Walker said only that the disciplinary body’s investigation centers on Ticktin’s quotes in the Times article.

Ticktin said he was not aware of the most recent Bar investigation but defended the practice, saying his research indicated regulations allow attorneys to secure fees using mortgages. The Bar already had examined his retainer agreement in Tampa’s judicial district, where he also has an office, and found nothing inappropriate, he said in a telephone interview.  “We believe it is ethical, appropriate and the only way some people will get representation,” he said.

Belief is a funny thing.

For example, I believe in unicorns, Bigfoot, and that Charlie Sheen just had an adverse reaction to over-the-counter flu medication.

Indeed, wasn’t it Oscar Wilde who said “I can believe anything provided it is incredible”?

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Remember, the hiring of a lawyer is an important decision that should not be based solely upon advertisements.  Before you decide on a lawyer, you should check their qualifications and experience.  Also, you should check to see who is actually going to work on your case.

Technorati Tags: Florida Bar, Foreclosures, Lawyer

A law firm given a F grade last year by the Better Business Bureau of Central Florida for a claimed pattern of unresolved client complaints is firing back.

The KEL law firm has filed a federal lawsuit in Orlando against the local BBB and related defendants, contending that its business has been damaged by a biased review, reports the Orlando Sentinel.

The firm, which handles a high volume of foreclosure defense and loan modification matters, says the client complaints on which the BBB focused represent only a tiny fraction of its 25,000 cases. “Many of the complaints forwarded to the BBB were baseless in nature and only lodged as an attempt by clients to harass KEL for situations in which the clients had unreasonable expectations,” the suit contends.

It seeks compensatory, special and punitive damages for business defamation or disparagement and false advertising, contending that the F grade resulted from a biased review in contravention of the BBB’s claimed policy in its promotional material.

The article doesn’t include any comment from the defendants. However, Joseph W. Little, an emeritus law professor at the University of Florida, said the BBB review is likely to be viewed as opinion, rather than a false statement for which defamation damages can be awarded, unless the law firm can show the defendant acted with reckless negligence.

“The BBB has [a] common-law right to express fair comment and honest opinion based on true facts,” he told the newspaper. “If it does that, then it is protected speech and opinion, even though it is not the opinion the law firm would want them to have.”

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Remember, the hiring of a lawyer is an important decision that should not be based solely upon advertisements.  Before you decide on a lawyer, you should check their qualifications and experience.  Also, you should check to see who is actually going to work on your case.

Technorati Tags: Foreclosure, Foreclosure Defense Attorneys, Loan Modification, Tampa Attorneys

An eligible homeowner:

• Must be a Florida resident;
• Must occupy property as primary residence (the property cannot be vacant, abandoned or rented);
• Borrower/co-borrower must be unemployed or underemployed through no fault of his/her own, which makes the first mortgage unaffordable;
• Must have documented total household income at or below 140% of the area median income (AMI), adjusted for household size;
• Must have an active checking/savings account that can be debited by the ACH method of funds transfer;
• May not have unencumbered assets of $5,000 or more, or three times the current monthly mortgage payment (whichever is greater);
• Cannot have a bankruptcy that has not been discharged or dismissed; and
• Cannot have been convicted of a mortgage-related felony in the last 10 years.

The current mortgage:

• Must be serviced by a participating lender, who agrees to accept payments on behalf of the homeowner;
• Must not be more than 180 days past due at the time of application;
• Must have been originated on or before January 1, 2009; and
• Must have an existing principal balance of less than $400,000.

This list is not all inclusive; other information and documents will be required prior to determining eligibility for HHF financial assistance. For a complete list of all requirements please go to: https://www.flhardesthithelp.org

The Unemployment Mortgage Assistance Program (UMAP) now provides up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to six months or until the homeowner can resume making mortgage payments. In addition, homeowners in the UMAP must pay 25 percent of their monthly income toward their monthly mortgage payment with a minimum payment of $70 per month.

The Mortgage Loan Reinstatement Payment Program (MLRP) now provides up to $6,000 to bring the homeowner’s past-due first mortgage current if the homeowner can show the ability to resume making mortgage payments on their own.

UMAP and MLRP program funds are in the form of a zero percent, deferred-payment loan, and the loan can be forgiven over a five-year period at a rate of 20 percent each year.

Technorati Tags: Florida Foreclosures, Florida Hardest Hit Fund, Tampa Foreclosure Defense

Investors want to lift the “shroud of secrecy” over the proposed $8.5 billion settlement of Bank of America Corp’s mortgage-backed securities liability in the coming weeks, a lawyer said on Wednesday.

Dan Reilly, a Colorado lawyer representing American International Group Inc, told a New York federal judge that some investors want negotiations and documents over the deal to be made available to parties who have an interest.

“We want to come back to you and ask you to find it’s not confidential,” Reilly told U.S. District Court Judge William Pauley in Manhattan at a hearing for the judge to set a Nov. 17 date to start evidence gathering and schedule arguments.

Reilly said that Bank of New York Mellon Corp, the trustee for hundreds of pools of mortgage-backed securities covered in the agreement, had asked the judge to withold substantive rulings until an appeal is heard.

“A shroud of secrecy is being pushed back by asking you not to rule on anything,” he said.

Bank of New York Mellon says that the months-long negotiations that led to the proposed agreement were not secret as some investors contend. They include Walnut Place, which removed the case from state court to federal court, seeking to have it supervised under federal class action law.

Representatives of Bank of New York Mellon, Bank of America and Gibbs & Bruns for 22 institutional investors who are part of the deal, all declined to comment on Thursday.

The settlement would resolve uncertainty for Bank of America over potential liabilities tied to pools of soured loans sold to investors by Countrywide Financial Corp, the mortgage lender it bought in 2008.

Countrywide was the largest U.S. mortgage lender before being taken over by BofA, a disastrous purchase analysts say has effectively cost more than $30 billion after accounting for lawsuits and writedowns.

A number of investors have objected to the proposed settlement, which Bank of New York Mellon Corp presented to a state judge in June for approval.

On Oct. 19, Pauley ruled the case belonged in federal court. Bank of New York Mellon is seeking to appeal that decision.

The cases are re: The Bank of New York Mellon, New York State Supreme Court, New York County, No. 651786/2011; and The Bank of New York Mellon et al v. Walnut Place LLC et al, U.S. District Court, Southern District of New York, No. 11-05988.

(Reporting by Karen Freifeld; Additional reporting by Grant McCool).

Technorati Tags: Mortgage Backed Securities, Bank of America, Investors

Technorati Tags: Bank of America, Investors, Mortgage Backed Securities

The Obama administration’s efforts to fix the housing crisis may have fallen well short of helping millions of distressed mortgage holders, but they have led to seven-figure paydays for some top executives at troubled mortgage giants Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure. The executives got the bonuses about two years after the federally backed mortgage giants received nearly $170 billion in taxpayer bailouts – and despite pledges by FHFA, the office tasked with keeping them solvent, that it would adjust the level of CEO-level pay after critics slammed huge compensation packages paid out to former Fannie Mae CEO Franklin Raines and others.

Securities and Exchange Commission documents show that Ed Haldeman, who announced last week that he is stepping down as Freddie Mac’s CEO, received a base salary of $900,000 last year yet took home an additional $2.3 million in bonus pay. Records show other Fannie and Freddie executives got similar Wall Street-style compensation packages; Fannie Mae CEO Michael Williams, for example, got $2.37 million in performance bonuses.

Including Haldeman, the top five officers at Freddie banked a combined $6.46 million in performance pay alone last year, though a second bonus installment for 2010 has yet to be reported to the SEC, according to agency records. Williams and others at Fannie pocketed $6.33 million in incentives for what SEC records describe as meeting the primary goal of providing “liquidity, stability and affordability” to the national market.

“Freddie Mac has done a considerable amount on behalf of the American taxpayers to support the housing finance market since entering into conservatorship,” Freddie spokesman Michael Cosgrove, told POLITICO on Monday. “We’re providing mortgage funding and continuous liquidity to the market. Together with Fannie Mae, we’ve funded the large majority of the nation’s residential loans. We’re insisting on responsible lending.”

A Fannie Mae spokesman said it is currently in a “quiet period” in advance of its third-quarter earnings report and declined to comment.

Most analysts believe the financial implosion of 2008 was fueled in part by Fannie Mae and Freddie Mac’s zeal in promoting homeownership and their backing of risky loans. And critics say that the mortgage giants’ deep backlog of repossessed homes, and their struggle through government conservatorship, is a staggering weight on a weak economy and puts even more downward pressure on home values.

“Fannie and Freddie executives are being paid millions to manage losses,” Rep. Patrick McHenry (R-N.C.), a longtime critic of the administration’s programs to rescue the housing market, told POLITICO. “By these same standards, I should be the starting forward for the Lakers. It’s completely absurd.”

“It is outrageous that senior executives at Fannie and Freddie are receiving multimillion-dollar compensation packages when they now rely on funding from U.S. taxpayers, many of whom face foreclosure or whose homes are underwater,” Rep. Elijah Cummings of Maryland, who has led House Democrats in efforts to ease Fannie and Freddie’s restrictions on restructuring loans or lowering payments for mortgage holders who owe more than their homes are worth, wrote in an email.

Compensation at Fannie and Freddie is, in fact, 40 percent below pre-government takeover levels, according to the FHFA, though those pay packages before conservatorship involved stock awards, while the current payments are exclusively cash. But compensation at both corporations, in particular Fannie Mae, has been a contentious issue since long before the 2008 financial meltdown, thanks to executives like Daniel Mudd, who earned $12.2 million in base pay and bonuses while heading Fannie, and Richard Syron, Freddie’s CEO, who pocketed $19.8 million in total compensation the year before the organization went into conservatorship.

Technorati Tags: Fannie Mae, Freddie Mac, Executive Compensation

If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.

Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
• Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.

Technorati Tags: Cancellation of debt, Foreclosure crisis, IRS

While that may sound easy enough, many problems can arise.  First, there are still people out there who treat gross income as a number they can just create out of thin air because they are self-employed and keep terrible business records to avoid income taxes.  For those people, their gross income is whatever it needs to be so they can get what they want.  But, since bank lending practices have tightened up because of the economic crisis we are facing, playing fast and loose with accounting principles does not work.  So, for self-employed people, get your records in order so a lender can easily determine your gross income.  Remember, the bank representative you will be talking to is not an accountant and if you make it to difficult to understand, you may get denied.

Second, after you have figured out what a reasonable payment is, you then need to figure out if there is any why your loan can be modified to that figure.  The first thing a lender will do if the loan is in default is to add the arrears to the principle balance.  As an example, if a person has missed 6 monthly payments and their payment is $1,500.00 per month, the arrears will be $9,000.00 plus late charges, drive-by inspections, BPO’s, and attorney fees, if any.  So in our example it would not be unrealistic to assume the total arrears may be $10,000.00.  If the principle balance at the time of the default was $150,000.00, when you add in the arrears the new principle balance will be $160,000.00.  If you have access to a loan amortization calculator, you will find a loan of $160,000.00 amortized at 2% interest for 30 years will result in a principle and interest payment of $591.39.  With HAMP loan modifications the escrows must be paid to the lender.  So, if the property taxes in our example are $1,500.00 a year and the hazard insurance is $1,500.00 a year, the escrow is $3,000.00 a year which is divided by 12 months resulting in $250.00 per month.  So, the monthly mortgage payment in our example would be $841.39.

In our examples the person could afford a payment of $806.00, and the loan was modified to a payment of $841.39.  Since the monthly payment is more than what we determined to be a reasonable payment for the person, they may get declined for a HAMP loan modification unless something else is done.  We will discuss that later.

Technorati Tags: HAMP, Loan Modification, TARP

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Technorati Tags: HAMP, Loan Modification, TARP

So, regardless of what a Realtor may tell you, when doing a short sale, read all of the documents your lender sends to the title/closing agent to make sure they are forgiving the remaining balance of the loan.  If the letter is blank, they have not.  Also, remember that the Mortgage Debt Relief Act of 2007 helps a person with their primary residence only.  It does not help with investment properties, or with deficiencies.

Technorati Tags: Deficiency Judgement, Foreclosure, Mortgage

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Technorati Tags: Deficiency Judgement, Foreclosure, Mortgage