Category Archives: foreclosure process

San Diego Housing Market Heating Up

Posted on April 24, 2012 by admin

The U.S. Weather Bureau calls the city’s weather the “closest thing to perfect in America.” San Diego rates as America’s eighth largest city and one of the safest places in the nation. With an area that encompasses 372-square miles, the city extends across varied terrain inland and along the coast; San Diego, California has proximity to mountains and the desert. More than 1,307,200 people reside in the city, according to the 2010 census. The San Diego urban population exceeds 3.95 million people. The deep waters of the San Diego coastline serve as the homeport for the Navy’s Pacific Fleet. About 53 ships operate out of the port. Around 25,000 sailors, soldiers, and civilians reside in the San Diego community. The San Diego Economy San Diego functions as the economic center for the San Diego metropolitan region. Besides military-related employment, with about five percent of all jobs related to Department of Defense (DOD) activities, more than 15,000 businesses in San Diego County depend primarily on DOD business. The seaport also attracts major shipyards and submarine facilities. The city also has a vibrant tourism, manufacturing, commerce and international trade. The unemployment rate in San Diego hovers around 9.3 percent in February, compared to the unemployment rates recorded for the state – 11.4 percent and U.S. – 8.7 percent, during the same period. The San Diego area has a median income of $75,900. San Diego Mediterranean-like climate allow its residents and visitors to enjoy events, festivals and outdoor activities in balmy weather year round. San Diego’s natural attributes makes it a center for all sorts of outdoor activities, including cycling, running, walking, kayaking, surfing, beach volleyball. The San Diego housing market has a unique quality in that the prices of similar homes can differ significantly within the proximity of just a few miles. Since the San Diego real estate market peaked in November 2005, homes prices have fallen 40.6 percent. The rate of declined has slowed, with homes losing only 5.3 percent over the last year. Historic low interest rates, low home prices and renewed confidence about the economy have finally translated into increased home sales. Source: NY Times.com Through March 2012, the San Diego area completed 3,237 homes sales—the highest sales total since 2006. The figure represents a 19.5 percent increase over February and a six percent rise on a yearly basis. Zillow.com calculates a median home price of $300,000 for the period January 12 – March 12, 2012, based on 3,521 home sales. The same number of residential sale transactions over the same period a year ago. Alto Research reports the average number of days on the market for at 134 days, as of April 15, 2012. In June 2004, more than 6,925 home sale transactions took place in San Diego. Currently, California has the second highest foreclosure rate in the nation foreclosures . Between 2008 and 2010, the state had 1 million foreclosure homes. The pattern of foreclosures tends to mimic other housing markets around the nation. Overall foreclosures activities have declined based on a year-to-year comparison. However, foreclosure filings have trended up in recent months. According to ReatyTrac, San Diego County has 17,910 homes at some point along the foreclosure process. A study, by the University of Southern California Lusk Center for Real Estate, reports San Diego county rents increased 4.3 percent in 2011. Demand for rentals, created  by  the  mass number of families who lost homes to foreclosure and the potential homebuyers who prefer to remain renters, will push rental prices up an additional 3.4 percent, in 2012 and 5.32 percent in 2013. Continue reading →

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Know Your Rights to Sue Mortgage Lenders for Unlawful Behavior

Posted on February 26, 2012 by admin

If you were a victim of unethical or unlawful behavior by servicing mortgage lenders, you may be wondering about your rights in terms of seeking restitution. Fortunately, even with the National Mortgage Settlement , there are a variety of options available to homeowners who experienced violations of foreclosure or lending laws.  Some of these options are even available to people who have already had their homes foreclosed on. Mortgage Help Numerous settlements have occurred in recent years that require mortgage lenders to make restitution to those they wronged.  These settlements benefit those who are currently struggling with their mortgages; who are underwater in terms of their mortgage (meaning they own more than the house is worth), or who have been the victims of unethical or unlawful treatment by their lenders. Homeowners who are still in their homes have many options to take advantage of in order to fix the situation and hopefully remain in their homes, including refinancing under favorable terms and sometimes having a portion of the principle balance forgiven The Hope for Homeowners program outlines a number of these options for refinancing and remaining in the home. Those looking to sue mortgage lenders who have already experienced a foreclosure on their property, however, have more limited remedies available to them. Government Aid for Wrongful Foreclosure A recent settlement between the government and five servicing lenders including Ally Financial, Bank of America, Citibank, JP Morgan Chase and Wells Fargo is unique in that it provides recourse to homeowners who have lost their homes as a result of wrongful or abusive foreclosure practices.   Under the rules of the settlement, individuals whose lenders violated foreclosure and lending laws could receive restitution including lost equity and interest. Independent Foreclosure Review is also available under an order by The Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency. Independent foreclosure review is available to anyone whose loan is serviced by a participating lender, including Bank of America, Chase, Citibank, Countrywide and numerous others.  The loan must have been in foreclosure between January 1, 2009 and December 31, 2010 and must have been a mortgage loan for your primary home to be eligible for review.  If it is determined that there were deficiencies in the foreclosure process, you may be entitled to financial compensation or other appropriate remedy. Independent Foreclosure Review.com provides a full list of banks participating. Other Recourse If you were the victim of a wrongful foreclosure action and are not able or willing to take advantage of government aid, there are other options available to you as well. First, an individual lawsuit is an option. Acceptance of funds from either of the aforementioned settlements does not prohibit you from pursuing a lawsuit against the servicing lender that performed a wrongful foreclosure action. Some reasons for pursuing such a lawsuit may include: The servicing lender did not provide enough (or any) time for loan modification paperwork to be completed and approved. Documents for loans were not properly reviewed or notarized Falsification of affidavits during foreclosure proceedings Missed deadlines for loan modification processing Seeking out a lawyer who has a strong background in and a good working knowledge of mortgages, banks, and foreclosure paperwork is crucial. Not only will your lawyer need to understand the financial language of your paperwork, but he will also need to be aware of any other lawsuits currently, or previously, charged against your lender in order to bring the best possible case against the bank that serviced your loan and foreclosed on your home. Additionally, a good lawyer with a strong networking system will also be able to help find others who are having, or have had, similar issues to those that you have had with your lender. This will add credibility to your case and possibly allow for initiation of a class action lawsuit. A class action lawsuit will bring more visibility to the case; the more people involved, the better your lawyer’s chances of winning a case against your servicing lender. While a lawsuit can be a useful tactic to achieve the restitution you deserve for the fraud or wrongful treatment by your servicing lender, lawsuits take time. Pursuing a lawsuit for restitution may be helpful only if you do not receive reasonable results from the other two aforementioned settlements, as it may take years to obtain compensation in court. Continue reading →

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Understanding Principal Reduction for Underwater Mortgages

Posted on January 3, 2012 by admin

Part of the American dream is to be a homeowner.  As housing sales and prices have slumped over the last few years, many homeowners found they owed more on their homes than the house was actually worth, in other words, their mortgage was underwater.  Having an underwater mortgage greatly complicates selling or refinancing a house to take advantage of lower interest rates.  In many cases, homeowners with underwater mortgages have simply mailed the keys back to the mortgage lender and walked away and allowed the house to be foreclosed.  This seems like the easiest option, but it can result in a 200 to 300 point reduction on their FICO score .  With that big of a hit there is little chance they will be able to finance anything in the near future. Since the start of the housing crisis, Congress has been working on a way to help those who face an imminent foreclosure with programs like the Principal Reduction Alternative of the Making Home Affordable program.  Even if a homeowner finds they are underwater with their mortgage, as long as they are still making payments, they have options.  The Principal Reduction Alternative will allow the person to work closely with their bank to eliminate the negative equity by reducing a mortgage to the amount of the appraised value of the house.  This program is not for everybody as there are strict eligibility requirements a person must meet before they can be considered. One benefit of the PRA program is obviously to the homeowner.  The bank writes off some of the principal on the loan in hopes that the homeowner will stick around and keep making their payments.  This is why even one missing document can cause the homeowner to start completely over in the application process .  Banks do not want to take a hit, but they would rather write off part of the loan, than go through the expense and hassle of taking the property through foreclosure.  While there are a great number of good aspects to the program, many people, such as James R. Hagerty from the Wall Street Journal feel the program could actually end up causing more foreclosures than it will prevent. Another benefit of the PRA program is to the lenders.  Banks are not in the real estate business.  By taking foreclosing on a property, banks end up are forced to sell an empty house in a slow housing market while paying all the maintenance and upkeep costs until it can be sold.  Banks can financial incentives to help a homeowner stay in their house through principal reduction.  In many cases, the write-off from a principal reduction is smaller than the total expense of the foreclosure process. Through the PRA program, or an FHA short refinance , or one of the many other options available through MakingHomeAffordable.gov , people have options.  These programs give those who feel their home is no longer affordable options other than foreclosure for dealing with an underwater mortgage. Continue reading →

Posted in Foreclosure, foreclosure process, interest rates, Loans and lending, Mortgage, mortgage help, Mortgage Rates, Principal Reduction | Tagged , , , , , | Leave a comment

Challenging Your Foreclosure Process

Posted on December 30, 2011 by admin

Many people who are facing foreclosure simply resign themselves to losing their home.  Sometimes, however, foreclosure is not inevitable.  You have other options, including a short sale where you sell the home for less than you owe.  You also have the option of challenging the foreclosure or in raising defenses to it.  Challenging foreclosure is the best option when you do not believe that your bank has a legitimate right to foreclosure.  Challenging your foreclosure can also buy you some extra time to explore alternatives to foreclosure. How to Challenge Foreclosure Banks can, and do, make mistakes both in bringing wrongful foreclosures and in the process of issuing loans.  If your bank is acting improperly or has done something wrong, you have several different options to explore to challenge your foreclosure.  For example, defenses you can raise include: Unconscionability: While people generally have the right to enter into any contract that they wish to enter into and will be bound by that contract once they sign it, there are some public policy exceptions to this general rule.  One contract comes in the form of unconscionable adhesion contracts. Adhesion contracts are those where you either have to sign or walk away from the entire transaction, and where you have no negotiating power.  A mortgage contract typically qualifies.  However, proving unconscionability is a tough standard and you have to prove that the bank acted so badly when you signed your mortgage loan that it “shocks the conscious” of the judge who is hearing your case.  A loan that is simply unfair isn’t going to cut it here- something extreme must have happened.  For instance, a bank preying on the elderly or disabled and pressuring them to agree to loans they cannot understand might be an example of unconscionability. Foreclosure proceedings weren’t properly followed: Banks cannot just take your home; they must either use a judicial foreclosure process or a non-judicial foreclosure process.  If the mortgage lender did not follow the steps required in your state, then the court can order the current foreclosure action stopped.  While the lender could simply start over at the beginning and follow proper procedure next time, this defense will buy you time to explore foreclosure alternatives (or, simply, more time in the home before you have to leave). Show the note: The bank or mortgage lender has to prove you actually owe the money that they claim you owe.  This means they have to produce original mortgage paperwork.  If you demand that they prove you owe the debt, they have to stop foreclosure until they can meet this demand.  Often, it takes time for paperwork to be located, especially if your loan has been sold to a different lender than the lender who originated the loan.  If the paperwork is never located, the foreclosure cannot go forward (this is rare, but it happens).  Even when the paperwork is ultimately found, the foreclosure process will still be slowed down. Prove you are serving your country : The Service members Civil Relief Act (SCRA) allows a postponement of foreclosure for up to nine months if you are an active duty service member who is serving your country at the time when the lender wishes to foreclosure.  All foreclosure actions against active duty service members also must take the form of judicial foreclosures, even in states where non-judicial foreclosure is permitted. Depending on your circumstances, any of these defenses can put a halt to the foreclosure process – in some cases, permanently.  You will have to challenge your foreclosure in front of a judge, and you’ll have to raise your defenses within the time limit for responding to the foreclosure action, so be sure to do your research or seek help from an attorney to ensure you protect your rights to challenge foreclosure. Continue reading →

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The Perils of Deficiency Judgments After Foreclosure

Posted on November 23, 2011 by admin

Many homeowners believe that foreclosure, while unpleasant, will at least end their debt problems related to their mortgage.  Unfortunately, foreclosure is not necessarily the end of your obligations to your mortgage lender.  In several states throughout the United States, you could actually end up having to pay even more money to the lender after your home is taken.  This can occur in states that permit deficiency judgments. What is a Deficiency Judgment? A deficiency judgment can occur when a mortgage lender is not able to fully recover all that you owe by selling your home.  For instance, if you had a $100,000 balance remaining on your mortgage and the lender incurred $4,000 in costs and fees during the foreclosure process, you would owe a total of $104,000.  However, if property values fell and if you did not put a big down payment (or any down payment) on your home, the mortgage lender may have been able to sell your home for only $90,000.  In that case, you would owe an extra $14,000 that the lender lost out on. When deficiency judgments are permitted, the lender would be able to file a separate court action against you in order to collect that last $14,000.  The lender would have to prove the deficiency in the amount that they recovered from the foreclosure and, if successful, the court could order you to pay the $14,000.  If you did not do so, the lender could then take further action to get the court to put a lien on any properties you still owned, or even to garnish your wages so that money would be taken out of your paycheck each week to repay what you owe. States that Allow Deficiency Judgments While deficiency judgments can be a significant financial hindrance, they are not permitted in all states or in all situations. Deficiency judgments are permitted in the District of Columbia and Puerto Rico and the following 37 states,: Alabama (AL) Arkansas (AR) Colorado (CO) Delaware (DE) Florida (FL) Georgia (GA) Hawaii (HI) Illinois (IL) Iowa (IA) Indiana (IN) Kansas (KS) Kentucky (KY) Louisiana (LA) Maine (ME) Maryland (MD) Massachusetts (MA) Michigan (MI) Montana (MT) Mississippi (MS) Missouri (MO) Ohio (OH) Nebraska (NE) Nevada (NV) New Hampshire (NH) New Jersey (NJ) New Mexico (NM) New York (NY) Oklahoma (OK) Pennsylvania (PA) Rhode Island (RI) South Carolina (SC) Tennessee (TN) Vermont (VT) Virginia (VA) West Virginia (WV) Wisconsin (WI) Wyoming (WY) Some states allow for deficiency judgments only in certain situations, such as if a lender pursues a judicial foreclosure, so it is important to understand exactly what your state’s rules are. Avoiding a Deficiency Judgment For a long time, deficiency judgments were relatively rare, even in states where they were permitted.  Typically lenders declined to spend the additional time and money to bring the court action in order to try to collect.  Since most people who were foreclosed on did not have the assets to pay the judgment, the lender would have to spend still more time in court to collect. However, with the wave of foreclosures and the recent financial crisis, more and more lenders have started to pursue deficiency judgments to try to recoup some of their losses.  Consequently, you should try to take steps to avoid a deficiency judgment. The best, and really the only, way in which to avoid a deficiency judgment is to avoid foreclosure.  When keeping your home is not possible or desirable, you should consider other alternatives such as deed in lieu of foreclosure or short sale in order to avoid a deficiency judgment.  Simply make sure that when you are negotiating your short sale or deed in lieu agreement that the agreement contains a promise from a lender that no deficiency judgment will be sought. Continue reading →

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Judicial vs. Non-Judicial Foreclosure

Posted on November 20, 2011 by admin

When you are facing foreclosure, one of the first things you should do is to determine whether your state is a judicial foreclosure state or a non-judicial foreclosure state.  This distinction will make a significant difference in how the foreclosure process works and in what to expect as the lender takes action against you. Judicial Foreclosure States Most states offer both judicial foreclosure and non-judicial foreclosure as an option, with a few limited exceptions.  When a state does not offer both options, it usually allows for judicial foreclosures only while a few other states permit non-judicial foreclosures as their only option. The states where judicial foreclosure is the only available choice for lenders include: Connecticut Delaware Florida Illinois Indiana Kansas Kentucky Louisiana Maine Maryland Massachusetts Nebraska New Jersey New Mexico New York North Dakota Ohio Pennsylvania South Carolina Tennessee Utah Vermont The states where non-judicial foreclosure is the only available option for lenders include: Michigan New Hampshire Tennessee West Virginia In all other states, lenders may use either judicial or non-judicial foreclosure, depending on your mortgage agreement. The “Power of Sale” Clause and Non-Judicial Foreclosure When a lender has a choice between a judicial foreclosure and a non-judicial foreclosure, that choice normally has to be made before a situation arises where a foreclosure is actually taking place.  The choice is made when the mortgage is originated.  The reason this is the case is that a non-judicial foreclosure is based on a clause in your mortgage document called a “power of sale” clause. The power of sale clause gives the lender the right to foreclose based on non-payment, even without going to court to get an order of foreclosure from a judge. Understanding the Difference Between Judicial and Non-Judicial Foreclosure While both a judicial and non-judicial foreclosure result in the loss of the home, the process is different. In a judicial foreclosure, you typically receive a notice of suit pending (les pendens) once you are in default on the mortgage.  You’ll be given time to answer the complaint and raise defenses, and the lender will need to prove that you owe the mortgage and are in default.  The foreclosure will not occur until a judge reviews the relevant information and enters a judgment against you. In a non-judicial foreclosure, the court action is eliminated.  Each state has specific notice requirements in place that must be met before a non-judicial foreclosure can occur.  For instance, the lender may be required to notify you, post notices in the paper for six consecutive weeks before the property is auctioned off, post a notice on the property, and hold the auction on the courthouse steps on a specific day of the month. Each of the states offering non-judicial foreclosure as an option to lenders have slightly different requirements.  It is important both to read your mortgage documents and to learn your state laws in order to have a full understanding of how the foreclosure process will work. Continue reading →

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Deed in Lieu of Foreclosure – An Alternative to Foreclosure

Posted on November 17, 2011 by admin

Deed in Lieu of Foreclosure A deed in lieu of foreclosure is a foreclosure alternative wherein you agree to relinquish your home and all rights to it in exchange for your mortgage lender agreeing to absolve you of all liability for the outstanding mortgage payments.  In other words, you give up the house and your mortgage balance is forgiven.  Deed in lieu of foreclosure can be a better option for homeowners than an actual foreclosure for many reasons, and it is also advantageous to the lender as well. Benefits of Deed in Lieu of Foreclosure One of the biggest benefits of deed in lieu of foreclosure is also the most obvious benefit: the home is not foreclosed on.  This means that the bank does not need to spend money on legal expenses, posting notice of the foreclosure, or other costs associated with foreclosing on a house.  A homeowner also does not have to deal with published notices of his homes foreclosure in the newspaper or posted at the home, all of which can be a traumatic and sometimes embarrassing process. Other benefits of a deed in lieu of foreclosure include: The opportunity to avoid a deficiency judgment .  Homeowners may become liable in certain cases for any outstanding balance due on the mortgage that the bank is not able to recover by selling the home.  This occurs when a bank seeks a “deficiency judgment” and the court orders the homeowner to pay this money even though the home is gone.  With a deed in lieu of foreclosure, the homeowner can negotiate to get the lender to agree not to pursue a deficiency judgment. Less damage to your credit.   While both foreclosure and deed in lieu of foreclosure are going to show up on your credit report and they are going to bring down your credit score, a deed in lieu of foreclosure is generally viewed as less damaging because you at least took action to deal with your problem. You do not have to find a buyer for the home, as you would in a short sale.   Sometimes, when the real estate market is especially bad, it can be impossible even to find a buyer for a short sale of a home.  A deed in lieu of foreclosure absolves the homeowner of that responsibility. There may also be other benefits, depending on your lender and what programs are in place.  For instance, the FHA created a program called ‘Cash for Keys’ where up to $2000 in compensation may be paid to homeowners who turn over their keys in a deed in lieu of foreclosure arrangement. Meeting the Requirements In order to qualify for a deed in lieu of foreclosure, you must meet certain requirements that vary from lender to lender.  Typically, you will need to be behind on your payments and unable to make your payments.  Often, it is also a requirement that the home must have been on the market for at least 90 days before the deed in lieu of foreclosure option is available.  Finally, HUD stipulates that a deed in lieu of foreclosure transaction must be completed within 90 days from the process was initiated. For more information on how to meet the requirements of deed in lieu of foreclosure or of how a deed in lieu of foreclosure can help you, you should speak with your lender. Continue reading →

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