Sacramento:
05/29/09 Flamenco Rumba - Mediterranean - Salsa
Visit www.kaweh.com Admission $16
05/30/09 Arts in River Park Festival
www.arts-in-riverpark.org Admission FREE
05/30/09 Curtis Park Neighborhood Yard Sale
www.sierra2.org Admission FREE [Until you buy something ;P]
05/30/09 Art Ark Day: Art & Soul Community Festival
www.crockerartmuseum.org Admission FREE
05/31/09 MIDFEST 2009
www.midfestsacramento.com Admission FREE
Weekend looks to be high 80's low 90's Drink plenty of water and enjoy these sunny days
Thursday, May 28, 2009
UPDATE: FHA Decision Could Benefit Home Buyers, Builders
UPDATE: FHA Decision Could Benefit Home Buyers, Builders
The U.S. government gave ailing home builders a ray of hope, although it also raised concerns lending mistakes that fueled the housing boom - and bust - could be repeated.The Department of Housing and Urban Development's Federal Housing Administration is paving the way for first-time buyers to tap a federal tax credit of up to $8,000 for a downpayment. The announcement, made Tuesday before several thousand real-estate agents attending the National Association of Realtors' Real Estate Summit, could prove a game changer for the sluggish housing market for new and existing inventory.Coming up with money to put down remains a stubborn stumbling block for many eager buyers. But now, the FHA's approved lenders, HUD-approved nonprofits and state and local governmental entities could be permitted to monetize the tax credit that expires Dec. 1 through short-term bridge loans, according to Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development. Right now, buyers have to wait until they file their taxes to receive the credit.More information is expected shortly. HUD declined to comment further Wednesday."There are still lots of details that need to come out," Dan Klinger, president of K. Hovnanian American Mortgage, Hovnanian Enterprises' (HOV) mortgage subsidiary. "If it is what it appears to be, it's going to sell lots of homes."The National Association of Realtors, which has called for the change, could boost its previous estimate that the tax credit will spark at least 300,000 additional sales. The National Association of Home Builders, meanwhile, estimates an additional 160,000 new home sales - 101,000 of which would be first-time buyers who will receive the credit, Donovan said. Another 59,000 existing homeowners will be able to buy another home because a first time buyer purchased their home, he added."For HUD to remove (the downpayment) hurdle, it will open the gate," said NAHB President and Chief Executive Jerry Howard, adding the 160,000 number could double. "This is significant."To appeal to first-timers - considered key to recovery because they don't have an existing home to sell - several builders have begun building smaller and more affordable homes. This comes as interest rates hover near record lows and home prices have plunged.While Donovan labeled the idea "a real win for everyone," it is also drawing some comparisons to the no-money down programs the FHA has worked to shut down. Congress ended a program last year that allowed home sellers to fund downpayments to home buyers through nonprofit groups, and the FHA has blamed that program for an outsized share of loan defaults. Under that program, nonprofit groups would "gift" the 3% minimum downpayment to a home buyer, often funded by the seller of the home. Buyers would move into the home without paying any of their own money for the downpayment."Although it remains to be seen how the program is actually implemented, the plan resembles former seller-funded downpayment assistance programs," wrote housing analyst Ivy Zelman in a research note Wednesday. "We remain concerned that the lenient underwriting standards, low down-payment requirements and now the ability of FHA borrowers to purchase a home without putting any of their own equity into the purchase is creating a tremendous risk for the program and taxpayers in the future."The NAHB's Howard, who would like to see seller-funded DPA reformed, disagreed: "There's no room for even the perception of abuse in this program." Regardless, the FHA would follow patchwork attempts from several states, including New Jersey, Colorado, Tennessee and Kentucky.Some fund downpayments and/or closing costs - possibly getting buyers to the dotted line for nothing out-of-pocket - and offer interest-free bridge loans that essentially convert to piggyback mortgages. The states say they are carefully screening applicants to avoid prolonging or adding to the housing crisis.Missouri led the way earlier this year when it set aside $6 million to offer first-time buyers a loan for up to 6% of the purchase price, capped at $6,750, to cover the downpayment and closing costs. Should the loan - which comes from the agency's general funds - not be repaid, it amortizes monthly over a decade starting July 1, 2010.The Show-Me state welcomed the news."It definitely blessed what the state agencies have been doing, no doubt about that," said Greg Spurgeon, single-family homeownership administrator for the Missouri Housing Development Commission. "We had some lenders that were unwilling to participate in the program until FHA gave this official approval."-By Dawn Wotapka, Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com(Nick Timiraos contributed to this report.)
The U.S. government gave ailing home builders a ray of hope, although it also raised concerns lending mistakes that fueled the housing boom - and bust - could be repeated.The Department of Housing and Urban Development's Federal Housing Administration is paving the way for first-time buyers to tap a federal tax credit of up to $8,000 for a downpayment. The announcement, made Tuesday before several thousand real-estate agents attending the National Association of Realtors' Real Estate Summit, could prove a game changer for the sluggish housing market for new and existing inventory.Coming up with money to put down remains a stubborn stumbling block for many eager buyers. But now, the FHA's approved lenders, HUD-approved nonprofits and state and local governmental entities could be permitted to monetize the tax credit that expires Dec. 1 through short-term bridge loans, according to Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development. Right now, buyers have to wait until they file their taxes to receive the credit.More information is expected shortly. HUD declined to comment further Wednesday."There are still lots of details that need to come out," Dan Klinger, president of K. Hovnanian American Mortgage, Hovnanian Enterprises' (HOV) mortgage subsidiary. "If it is what it appears to be, it's going to sell lots of homes."The National Association of Realtors, which has called for the change, could boost its previous estimate that the tax credit will spark at least 300,000 additional sales. The National Association of Home Builders, meanwhile, estimates an additional 160,000 new home sales - 101,000 of which would be first-time buyers who will receive the credit, Donovan said. Another 59,000 existing homeowners will be able to buy another home because a first time buyer purchased their home, he added."For HUD to remove (the downpayment) hurdle, it will open the gate," said NAHB President and Chief Executive Jerry Howard, adding the 160,000 number could double. "This is significant."To appeal to first-timers - considered key to recovery because they don't have an existing home to sell - several builders have begun building smaller and more affordable homes. This comes as interest rates hover near record lows and home prices have plunged.While Donovan labeled the idea "a real win for everyone," it is also drawing some comparisons to the no-money down programs the FHA has worked to shut down. Congress ended a program last year that allowed home sellers to fund downpayments to home buyers through nonprofit groups, and the FHA has blamed that program for an outsized share of loan defaults. Under that program, nonprofit groups would "gift" the 3% minimum downpayment to a home buyer, often funded by the seller of the home. Buyers would move into the home without paying any of their own money for the downpayment."Although it remains to be seen how the program is actually implemented, the plan resembles former seller-funded downpayment assistance programs," wrote housing analyst Ivy Zelman in a research note Wednesday. "We remain concerned that the lenient underwriting standards, low down-payment requirements and now the ability of FHA borrowers to purchase a home without putting any of their own equity into the purchase is creating a tremendous risk for the program and taxpayers in the future."The NAHB's Howard, who would like to see seller-funded DPA reformed, disagreed: "There's no room for even the perception of abuse in this program." Regardless, the FHA would follow patchwork attempts from several states, including New Jersey, Colorado, Tennessee and Kentucky.Some fund downpayments and/or closing costs - possibly getting buyers to the dotted line for nothing out-of-pocket - and offer interest-free bridge loans that essentially convert to piggyback mortgages. The states say they are carefully screening applicants to avoid prolonging or adding to the housing crisis.Missouri led the way earlier this year when it set aside $6 million to offer first-time buyers a loan for up to 6% of the purchase price, capped at $6,750, to cover the downpayment and closing costs. Should the loan - which comes from the agency's general funds - not be repaid, it amortizes monthly over a decade starting July 1, 2010.The Show-Me state welcomed the news."It definitely blessed what the state agencies have been doing, no doubt about that," said Greg Spurgeon, single-family homeownership administrator for the Missouri Housing Development Commission. "We had some lenders that were unwilling to participate in the program until FHA gave this official approval."-By Dawn Wotapka, Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com(Nick Timiraos contributed to this report.)
Florida Cook County Judge Sets Timing Limits to Foreclosure Judgements
Dorothy Kinnaird, the Presiding Judge of the Chancery Division of Cook County, has issued a general order that has a direct impact upon the timing of foreclosure judgments as well as orders approving sales.
Summary
Judge Dorothy Kinnaird, Presiding Judge for the Chancery Division of Cook County Illinois issued a general order that has a direct impact upon the timing of foreclosure judgments as well as orders approving sales. Judge Kinnaird's order is limited to Cook County foreclosure cases filed on or after January 1, 2009
Until the court has set and held a case management conference:
No foreclosure case will be permitted to proceed to judgment
No orders to approve sales will be entered in cases in which a judgment has already been found and a sale completed.
The only exception to this rule is if there is a finding of "good cause." The only example of good cause and the only example provided is where the property is vacant and abandoned.
Each foreclosure case will be assigned a case management date in the month of July or August, 2009. No conferences have been set so far.
The Order does not indicate what subjects or issues will be discussed at the conference.
No motions for entry of foreclosure judgment may be filed until the conference has been held. That does not preclude the possibility of an additional case management conference on the matter.
Under the Order, Lender's counsel carries the burden to notify defendants. This will result in a cost for the lender
Case filed prior to January 1, 2009 may proceed to judgment or order approving sale without the requirement for a case management conference being scheduled. However, the additional backlog will likely delay this process anyway.
Although the Order does not prohibit lenders from filing foreclosures or serving borrowers with the complaint and summons, the general impact of this Order is to stay the matter until a case management conference has been scheduled and held.
View rule: http://www.safeguardproperties.com/pub/pdf/20090408081753273_pp1-3.pdf
Summary
Judge Dorothy Kinnaird, Presiding Judge for the Chancery Division of Cook County Illinois issued a general order that has a direct impact upon the timing of foreclosure judgments as well as orders approving sales. Judge Kinnaird's order is limited to Cook County foreclosure cases filed on or after January 1, 2009
Until the court has set and held a case management conference:
No foreclosure case will be permitted to proceed to judgment
No orders to approve sales will be entered in cases in which a judgment has already been found and a sale completed.
The only exception to this rule is if there is a finding of "good cause." The only example of good cause and the only example provided is where the property is vacant and abandoned.
Each foreclosure case will be assigned a case management date in the month of July or August, 2009. No conferences have been set so far.
The Order does not indicate what subjects or issues will be discussed at the conference.
No motions for entry of foreclosure judgment may be filed until the conference has been held. That does not preclude the possibility of an additional case management conference on the matter.
Under the Order, Lender's counsel carries the burden to notify defendants. This will result in a cost for the lender
Case filed prior to January 1, 2009 may proceed to judgment or order approving sale without the requirement for a case management conference being scheduled. However, the additional backlog will likely delay this process anyway.
Although the Order does not prohibit lenders from filing foreclosures or serving borrowers with the complaint and summons, the general impact of this Order is to stay the matter until a case management conference has been scheduled and held.
View rule: http://www.safeguardproperties.com/pub/pdf/20090408081753273_pp1-3.pdf
CNN's Drew Griffin Foreclosure are not sold
CNN’s Drew Griffin on why millions of foreclosed homes nationwide are so badly damaged they may never be sold.
http://video.aol.com/video-detail/un-saleable-homes/253292954
http://video.aol.com/video-detail/un-saleable-homes/253292954
CNN Money discusses Unemployment Major Factor missed mortgage payment
http://money.cnn.com/2009/04/13/real_estate/foreclosure_unemployment.reut/index.htm
A recent report from CNN Money discusses a survey from the Boston Federal Reserve how unemployment is a major driver of missed mortgage payments.
Unemployment: Big factor in home defaultsReport indicates unemployment is a major driver of missed mortgage payments, and raises concerns that Presidential plan to modify loans may miss the mark.
NEW YORK (Reuters) -- Unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Boston Federal Reserve that raises questions about President Obama's plan to stem foreclosures by modifying loans.
Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.
Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.
Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.
"Foreclosure-prevention policy should focus on the most important source of defaults," the economists wrote in a study released on the Boston Fed's Web site late last week.
The findings challenge the thinking behind a White House plan announced in February that would give up to 9 million families the chance to refinance their mortgages. President Obama's administration has made loan modifications a central plank of its efforts to tackle the housing crisis.
"One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of 'unaffordable' mortgages," the economists wrote. But policies that focus on loan modification "face important hurdles in addressing the current foreclosure crisis," they wrote.
The economists suggest that the government could instead replace part of an individual homeowner's lost income from a job loss through loans and grants and help those whose predicament is more permanent become renters.
In addition, investors do not necessarily stand to gain if foreclosure is avoided, they said, and that could help explain the relatively small number of loan modifications to date. Estimates that total gains for investors from modifying rather than foreclosing can run to $180 billion may not take into account a number of key factors.
Investors can lose money when they modify mortgages for borrowers who would have repaid anyway. Borrowers with modified loans may default again later, especially if the reason they were driven to default remains, the economists said.
A recent report from CNN Money discusses a survey from the Boston Federal Reserve how unemployment is a major driver of missed mortgage payments.
Unemployment: Big factor in home defaultsReport indicates unemployment is a major driver of missed mortgage payments, and raises concerns that Presidential plan to modify loans may miss the mark.
NEW YORK (Reuters) -- Unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Boston Federal Reserve that raises questions about President Obama's plan to stem foreclosures by modifying loans.
Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.
Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.
Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.
"Foreclosure-prevention policy should focus on the most important source of defaults," the economists wrote in a study released on the Boston Fed's Web site late last week.
The findings challenge the thinking behind a White House plan announced in February that would give up to 9 million families the chance to refinance their mortgages. President Obama's administration has made loan modifications a central plank of its efforts to tackle the housing crisis.
"One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of 'unaffordable' mortgages," the economists wrote. But policies that focus on loan modification "face important hurdles in addressing the current foreclosure crisis," they wrote.
The economists suggest that the government could instead replace part of an individual homeowner's lost income from a job loss through loans and grants and help those whose predicament is more permanent become renters.
In addition, investors do not necessarily stand to gain if foreclosure is avoided, they said, and that could help explain the relatively small number of loan modifications to date. Estimates that total gains for investors from modifying rather than foreclosing can run to $180 billion may not take into account a number of key factors.
Investors can lose money when they modify mortgages for borrowers who would have repaid anyway. Borrowers with modified loans may default again later, especially if the reason they were driven to default remains, the economists said.
Indiana Marion County Passed Local Rule on Foreclosure Cases
The Marion County Indiana Circuit and Superior courts (Indianapolis metropolitan area) passed a local rule, LR49-TR 85 Rule 231, effective in March 2009. The Rule requires that settlement conferences be held between the primary borrower and primary lender in all owner-occupied housing foreclosure cases.
Rule Summary
Foreclosure proceedings will be automatically stayed for 90 days, effective once the case is filed, except for proceeding with service, unless the conference is vacated for good cause.
Once service has been made and confirmed, the court will send out the settlement conference notice to the lender and borrower.
The borrower must respond to the court within 15 days of receipt of the notice to confirm they will be attending the conference. If the court does not receive the confirmation, the conference will be waived.
Both the lender and a representative of the lender who has settlement authority, as well as the borrower, may attend the conference in person or by phone.
The borrower must provide the lender's counsel with the borrower's financial information (7) seven days prior to the conference.
Lender's counsel must provide a written report on the conference results to the court within (5) five days of the conference. If no conference was held, lender's counsel must file a statement explaining the reasons that the conference was not held.
Upon notice, the lender needs to make a loan officer available by phone for each conference.
If the conference is not held within 90 days after service is confirmed, or if the borrower fails to appear for the conference, foreclosure may proceed
The immediate impact of this rule will be to delay foreclosure proceedings, unless the settlement conference is waived.
Rule Summary
Foreclosure proceedings will be automatically stayed for 90 days, effective once the case is filed, except for proceeding with service, unless the conference is vacated for good cause.
Once service has been made and confirmed, the court will send out the settlement conference notice to the lender and borrower.
The borrower must respond to the court within 15 days of receipt of the notice to confirm they will be attending the conference. If the court does not receive the confirmation, the conference will be waived.
Both the lender and a representative of the lender who has settlement authority, as well as the borrower, may attend the conference in person or by phone.
The borrower must provide the lender's counsel with the borrower's financial information (7) seven days prior to the conference.
Lender's counsel must provide a written report on the conference results to the court within (5) five days of the conference. If no conference was held, lender's counsel must file a statement explaining the reasons that the conference was not held.
Upon notice, the lender needs to make a loan officer available by phone for each conference.
If the conference is not held within 90 days after service is confirmed, or if the borrower fails to appear for the conference, foreclosure may proceed
The immediate impact of this rule will be to delay foreclosure proceedings, unless the settlement conference is waived.
Florida Mandatory Referral to Mediation
Judicial Orders (click here) require mandatory referral to mediation for residential mortgage foreclosures for owner-occupied residences in several Florida counties. The defendants must also be offered foreclosure counseling by HUD approved counselors
The orders apply to the Florida Circuit Courts in the counties of Escambia, Santa Rosa, Okaloosa, Walton [Order 2009-18]; Indian River, Martin, Okeechobee and St. Lucie [Order 2009-01]; and Orange [Orange County Order 2009-02]. At the time the foreclosure complaint is filed, plaintiff's counsel must complete and file "Form A", which contains information regarding the property, the owner, contact information for the Lender's loss mitigation department and a Notice of the Homeowner's Right to Mediation. If owner-occupied, plaintiff must file a copy of the mortgage note, mortgage and any PSA that may affect the plaintiff's ability to settle and resolve the foreclosure. Plaintiff's counsel must affirmatively certify whether the property is owner occupied and if so, plaintiff's counsel must certify the identity of the plaintiff or their representative with full settlement authority, and that counsel has personally spoken to the representative and confirmed they have full and complete settlement authority. If certified as owner-occupied, Form A must be electronically transmitted to the Collins Center within the prescribed time (5-10 days as applicable. The Orange County Order differs from the others in that it requires personal communication between Plaintiff's counsel and the Defendant Debtor to determine whether the Defendant is not interested in or is unable to engage in loss mitigation efforts. If so, the Plaintiff may file a prescribed Notice of Good Faith Communication and be excused from compliance with the Orange County Order Mediation civil procedure, fees and requirements are set forth in each Order. The Collins Center will send a list of HUD approved counseling agencies the defendants at the time mediation is scheduled. All named parties must attend the mediation in person or by representative with full settlement authority
The orders apply to the Florida Circuit Courts in the counties of Escambia, Santa Rosa, Okaloosa, Walton [Order 2009-18]; Indian River, Martin, Okeechobee and St. Lucie [Order 2009-01]; and Orange [Orange County Order 2009-02]. At the time the foreclosure complaint is filed, plaintiff's counsel must complete and file "Form A", which contains information regarding the property, the owner, contact information for the Lender's loss mitigation department and a Notice of the Homeowner's Right to Mediation. If owner-occupied, plaintiff must file a copy of the mortgage note, mortgage and any PSA that may affect the plaintiff's ability to settle and resolve the foreclosure. Plaintiff's counsel must affirmatively certify whether the property is owner occupied and if so, plaintiff's counsel must certify the identity of the plaintiff or their representative with full settlement authority, and that counsel has personally spoken to the representative and confirmed they have full and complete settlement authority. If certified as owner-occupied, Form A must be electronically transmitted to the Collins Center within the prescribed time (5-10 days as applicable. The Orange County Order differs from the others in that it requires personal communication between Plaintiff's counsel and the Defendant Debtor to determine whether the Defendant is not interested in or is unable to engage in loss mitigation efforts. If so, the Plaintiff may file a prescribed Notice of Good Faith Communication and be excused from compliance with the Orange County Order Mediation civil procedure, fees and requirements are set forth in each Order. The Collins Center will send a list of HUD approved counseling agencies the defendants at the time mediation is scheduled. All named parties must attend the mediation in person or by representative with full settlement authority
Jeffson County, Kentucky sets pilot Foreclosure Mediation Program
Effective March 30, 2009, the Jefferson County, Kentucky courts (which includes the City of Louisville) have initiated a pilot Foreclosure Mediation Program for owner occupied residential properties. This program will impact all servicers handling defaulted accounts in Jefferson County, and if the program is considered successful, it may be adopted by other Kentucky counties.
Presently, the program only involves new foreclosure actions filed before four of the judges within Jefferson County. However, the Jefferson County Master Commissioner's office anticipates rolling this program out to all divisions of the Court by June or July of this year.Jefferson County's program is considered to be an "opt-in program". In other words, debtors must affirmatively request mediation. This program is anticipated to run parallel to the standard foreclosure process. The request for Mediation is not intended to stall the entry of judgment in the foreclosure, but will delay or stop the actual foreclosure sale if servicers fail to participate in the mediation process.This program uses a state grant to fund social service outreach organizations' efforts to contact borrowers. Retained organizations, working through the Kentucky Housing Corporation, will attempt up to three personal contacts at the residence in order to notify borrowers of the program. If contact is made with the borrowers, these housing counselors will work with the borrowers to complete a request for mediation and a financial package to be provided to their mortgage servicer.Completed packages will be forwarded to the attorney for the servicer, and a hearing will be set at least two weeks from the date the package is delivered to the attorney. The servicer's attorney will be required to forward the completed package to their client to review for possible loss mitigation options.The mediation hearings will be conducted every Thursday morning before the Master Commissioner. Counsel for the servicer will be required to be present, and a representative of the servicer, with true settlement authority, must be available by telephone. In addition, the debtor and the housing counselor must be present, along with a pro-bono attorney to represent the debtor.If the servicer participates in this process, then the foreclosure sale may occur if no settlement can be reached. The Court will encourage servicers to mitigate loans in a way that permits borrowers to stay in their homes, or to allow the borrower time to arrange alternative housing and exit the property in a "more graceful" manner.Our firm is encouraging all servicers to cooperate to the fullest extent in this program. If servicers provide staff to adequately review financials prior to the mediation conference, and give their counsel direct access to dedicated loss mitigation employees with true settlement authority, this program should allow servicers and borrowers to reach settlements in many cases that will benefit all parties concerned.Proactive involvement in this process should increase cure rates, successful loan modifications, forbearance plans, and Deeds-in-Lieu of Foreclosure. In many cases, active participation in this program may drastically reduce loss severity on defaulted accounts, shorten timelines to complete the foreclosure process, and may eliminate the need to manage a larger pool of REO properties in Jefferson County.Servicers who fail to cooperate to the fullest extent with this program, or who are perceived by the Court as being uncooperative, will undoubtedly find prosecution of their cases in Jefferson County to be more difficult, and will likely suffer from substantial timeline delays and possible adverse publicity in the community.The Court has expressed a willingness to work with law firms and servicers to ensure that the financial package that is completed includes all information and documentation that may be necessary to consider a loss mitigation proposal. The Master Commissioner office has asked us to forward them any specific information or documentation requirements that servicers might have. Servicers will be required to accept and review the financial package in the format the Court sets forth. As a result, we are encouraging all servicers to forward us copies of their required financial packages, so that we may provide them to the Court and request that they include the necessary information in the Court package.
If you would like a copy of the court order or if you have any questions regarding this topic, they can be addressed to Richard Nielson at rnielson@nsattorneys.com, or you may contact Rich directly at (859) 655-8010
Presently, the program only involves new foreclosure actions filed before four of the judges within Jefferson County. However, the Jefferson County Master Commissioner's office anticipates rolling this program out to all divisions of the Court by June or July of this year.Jefferson County's program is considered to be an "opt-in program". In other words, debtors must affirmatively request mediation. This program is anticipated to run parallel to the standard foreclosure process. The request for Mediation is not intended to stall the entry of judgment in the foreclosure, but will delay or stop the actual foreclosure sale if servicers fail to participate in the mediation process.This program uses a state grant to fund social service outreach organizations' efforts to contact borrowers. Retained organizations, working through the Kentucky Housing Corporation, will attempt up to three personal contacts at the residence in order to notify borrowers of the program. If contact is made with the borrowers, these housing counselors will work with the borrowers to complete a request for mediation and a financial package to be provided to their mortgage servicer.Completed packages will be forwarded to the attorney for the servicer, and a hearing will be set at least two weeks from the date the package is delivered to the attorney. The servicer's attorney will be required to forward the completed package to their client to review for possible loss mitigation options.The mediation hearings will be conducted every Thursday morning before the Master Commissioner. Counsel for the servicer will be required to be present, and a representative of the servicer, with true settlement authority, must be available by telephone. In addition, the debtor and the housing counselor must be present, along with a pro-bono attorney to represent the debtor.If the servicer participates in this process, then the foreclosure sale may occur if no settlement can be reached. The Court will encourage servicers to mitigate loans in a way that permits borrowers to stay in their homes, or to allow the borrower time to arrange alternative housing and exit the property in a "more graceful" manner.Our firm is encouraging all servicers to cooperate to the fullest extent in this program. If servicers provide staff to adequately review financials prior to the mediation conference, and give their counsel direct access to dedicated loss mitigation employees with true settlement authority, this program should allow servicers and borrowers to reach settlements in many cases that will benefit all parties concerned.Proactive involvement in this process should increase cure rates, successful loan modifications, forbearance plans, and Deeds-in-Lieu of Foreclosure. In many cases, active participation in this program may drastically reduce loss severity on defaulted accounts, shorten timelines to complete the foreclosure process, and may eliminate the need to manage a larger pool of REO properties in Jefferson County.Servicers who fail to cooperate to the fullest extent with this program, or who are perceived by the Court as being uncooperative, will undoubtedly find prosecution of their cases in Jefferson County to be more difficult, and will likely suffer from substantial timeline delays and possible adverse publicity in the community.The Court has expressed a willingness to work with law firms and servicers to ensure that the financial package that is completed includes all information and documentation that may be necessary to consider a loss mitigation proposal. The Master Commissioner office has asked us to forward them any specific information or documentation requirements that servicers might have. Servicers will be required to accept and review the financial package in the format the Court sets forth. As a result, we are encouraging all servicers to forward us copies of their required financial packages, so that we may provide them to the Court and request that they include the necessary information in the Court package.
If you would like a copy of the court order or if you have any questions regarding this topic, they can be addressed to Richard Nielson at rnielson@nsattorneys.com, or you may contact Rich directly at (859) 655-8010
Iowa sets new laws on foreclosure notices
On April 9th, Governor Chet Culver signed SF 364 titled, "an Act relating to civil actions including certain limitations on actions, judgments, and executions and including actions relating to the foreclosure of real estate mortgages, and providing effective date and applicability provisions".
Additional information is provided in the following article from the Quad-City Times.
Iowa Senate votes to help people facing foreclosure
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DES MOINES — The Iowa Senate voted Tuesday to provide more leeway for a growing number of Iowans facing foreclosure because they are behind in making their mortgage payments.
Senate File 364, which passed on a 50-0 vote, is designed to improve the opportunity for mortgage holders to work with their lenders to stave off civil default judgments.
“This is a major issue facing Iowans,” said Sen. Rob Hogg, D-Cedar Rapids. “This bill will help us address the foreclosure crisis and provide additional protections for the homeowner whose property is being foreclosed.”
The number of Iowa properties subject to civil mortgage foreclosure action has nearly doubled from 5,507 in 2002 to nearly 11,000 last year, according to the preliminary estimates.
The bill requires mediation notices “prior to commencing an action” on a residence — a provision that is effective through July 1, 2011. The legislation allows for a 60-day delay in foreclosure sales, and it also provides that lenders may rescind foreclosure action to negotiate a voluntary workout.
Hogg said the proposed change should help reduce unnecessary cost to parties involved in foreclosure proceedings. The bill also should help communities by reducing bureaucratic red tape that stops foreclosed property from being resold or returned to productive use, he said.
In separate action, the Senate voted 50-0 to establish licensing requirements for mortgage loan originators to ensure the lending industry is operating without unfair, deceptive or fraudulent practices.
“Senate File 355 toughens state laws governing mortgage bankers and brokers to fight shady operators who helped cause the national mortgage mess,” said Sen. Swati Dandekar, D-Marion, the bill’s floor manager.
Entire Bill: http://coolice.legis.state.ia.us/Cool-ICE/default.asp?Category=billinfo&Service=Billbook&menu=false&hbill=SF364
Additional information is provided in the following article from the Quad-City Times.
Iowa Senate votes to help people facing foreclosure
-->
DES MOINES — The Iowa Senate voted Tuesday to provide more leeway for a growing number of Iowans facing foreclosure because they are behind in making their mortgage payments.
Senate File 364, which passed on a 50-0 vote, is designed to improve the opportunity for mortgage holders to work with their lenders to stave off civil default judgments.
“This is a major issue facing Iowans,” said Sen. Rob Hogg, D-Cedar Rapids. “This bill will help us address the foreclosure crisis and provide additional protections for the homeowner whose property is being foreclosed.”
The number of Iowa properties subject to civil mortgage foreclosure action has nearly doubled from 5,507 in 2002 to nearly 11,000 last year, according to the preliminary estimates.
The bill requires mediation notices “prior to commencing an action” on a residence — a provision that is effective through July 1, 2011. The legislation allows for a 60-day delay in foreclosure sales, and it also provides that lenders may rescind foreclosure action to negotiate a voluntary workout.
Hogg said the proposed change should help reduce unnecessary cost to parties involved in foreclosure proceedings. The bill also should help communities by reducing bureaucratic red tape that stops foreclosed property from being resold or returned to productive use, he said.
In separate action, the Senate voted 50-0 to establish licensing requirements for mortgage loan originators to ensure the lending industry is operating without unfair, deceptive or fraudulent practices.
“Senate File 355 toughens state laws governing mortgage bankers and brokers to fight shady operators who helped cause the national mortgage mess,” said Sen. Swati Dandekar, D-Marion, the bill’s floor manager.
Entire Bill: http://coolice.legis.state.ia.us/Cool-ICE/default.asp?Category=billinfo&Service=Billbook&menu=false&hbill=SF364
Illinois SB 2513 New Requirement on lenders & Servicers
Illinois SB 2513The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers.
SB 2513 applies to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence.
SB 2513:
If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice."
The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days under certain circumstances.
The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers. The new requirements are effective immediately. Therefore, the new requirements must be adhered to beginning on April 6, 2009.
Applicable to Loans Secured by Borrower's Principal Residence OnlyThe law will apply to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence. The law will apply only once per loan (i.e. if the law is complied with for a previous default, there is no requirement to comply with the law on any subsequent defaults).
Required Thirty Day "Grace Period Notice" If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice." This Notice must be sent as a separate letter than any default or breach letter, but can be sent at the same time as those other letters. A foreclosure cannot be filed once the law goes into effect unless this Notice has been sent. We advise sending the "Grace Period Notice" in a separate envelope than the breach or demand letter.
The Notice must be formatted in a specific way: headed in 14-point type, entitled "GRACE PERIOD NOTICE" and including the date it was sent. The Notice must further state the following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."
No other language should be included in the body of the Notice, but it must also include the following information:
The consumer hotline number of the Illinois Department of Financial and Professional Regulation: 800-532-8785;
The web address of the Illinois Department of Financial and Professional Regulation: http//www.idfpr.com
A phone number for contacting the mortgagee;
A fax number for the mortgagee; and
The mailing address of the mortgagee.
The Notice must be sent via first class U.S. Mail and addressed to the borrower at the property address securing the loan.
Possible Second Thirty-Day Grace Period The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days. If at any time during the above described thirty day original grace period, an approved counseling agency provides written notice to the mortgagee that the borrower is seeking counseling services, no foreclosure action may be initiated for thirty days after the date of the counseling agency notice. An approved counseling agency is defined as one that has been approved by the U.S. Department of Housing and Urban Development.
During this thirty-day period, it is expected that the mortgagee and counseling agency will work towards agreeing to a "sustainable loan workout plan." A "sustainable loan workout plan" may include, but is not limited to, the following:
Temporary suspension of payments;
Lengthened loan term;
A lowered or frozen interest rate;
A principal write down;
A repayment plan to pay the existing loan in full;
Deferred payments; or
Refinancing into a new affordable loan.
Effect of the Law Once the mortgagee sets up procedures to comply with this law, we do not expect it to result in substantial delays. If the "Grace Period Notice" is sent contemporaneously with the breach or default letter, the new thirty day grace period will be merged into an existing grace period that most mortgagees already have established with the breach letters.
However, since the law goes into effect immediately upon signing and since no new foreclosures can be filed without first complying with the required "Grace Period Notice," an expected thirty day delay will occur. This delay could be extended to a total of up to sixty days if the mortgagee receives notice that the borrower is working with an approved counseling agency.
Therefore, we urge you to begin sending the "Grade Period Notice" on each and every account that a breach or demand letter is sent to a borrower. Further, the "Grade Period Notice" should be mailed immediately on all accounts that have been referred for foreclosure so that there is no further delay beyond the thirty days required by the statute. These two steps will greatly minimize any further delays.
If you have any questions on this information, please contact Mr. Michael S. Bablo, Esq.
Michael is an associate in the Real Estate Default Group of the Chicago office focused on foreclosure services for Weltman, Weinberg & Reis Co., L.P.A. He can be reached at (312) 253-0617 or via e-mail at mbablo@weltman.com.
See Bill Entirety http://www.ilga.gov/legislation/95/SB/PDF/09500SB2513enr.pdf
SB 2513 applies to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence.
SB 2513:
If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice."
The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days under certain circumstances.
The Governor of Illinois has officially signed Bill 2513 into law, which provides new requirements on lenders and servicers. The new requirements are effective immediately. Therefore, the new requirements must be adhered to beginning on April 6, 2009.
Applicable to Loans Secured by Borrower's Principal Residence OnlyThe law will apply to all loans secured by residential real property, except for those loans that the borrower has previously filed bankruptcy or which the property is not the borrower's principal residence. The law will apply only once per loan (i.e. if the law is complied with for a previous default, there is no requirement to comply with the law on any subsequent defaults).
Required Thirty Day "Grace Period Notice" If a residential real property loan falls into default by more than thirty days, the mortgagee must send a "Grace Period Notice." This Notice must be sent as a separate letter than any default or breach letter, but can be sent at the same time as those other letters. A foreclosure cannot be filed once the law goes into effect unless this Notice has been sent. We advise sending the "Grace Period Notice" in a separate envelope than the breach or demand letter.
The Notice must be formatted in a specific way: headed in 14-point type, entitled "GRACE PERIOD NOTICE" and including the date it was sent. The Notice must further state the following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."
No other language should be included in the body of the Notice, but it must also include the following information:
The consumer hotline number of the Illinois Department of Financial and Professional Regulation: 800-532-8785;
The web address of the Illinois Department of Financial and Professional Regulation: http//www.idfpr.com
A phone number for contacting the mortgagee;
A fax number for the mortgagee; and
The mailing address of the mortgagee.
The Notice must be sent via first class U.S. Mail and addressed to the borrower at the property address securing the loan.
Possible Second Thirty-Day Grace Period The law further imposes a second grace period that could extend the original grace period by up to an additional thirty days. If at any time during the above described thirty day original grace period, an approved counseling agency provides written notice to the mortgagee that the borrower is seeking counseling services, no foreclosure action may be initiated for thirty days after the date of the counseling agency notice. An approved counseling agency is defined as one that has been approved by the U.S. Department of Housing and Urban Development.
During this thirty-day period, it is expected that the mortgagee and counseling agency will work towards agreeing to a "sustainable loan workout plan." A "sustainable loan workout plan" may include, but is not limited to, the following:
Temporary suspension of payments;
Lengthened loan term;
A lowered or frozen interest rate;
A principal write down;
A repayment plan to pay the existing loan in full;
Deferred payments; or
Refinancing into a new affordable loan.
Effect of the Law Once the mortgagee sets up procedures to comply with this law, we do not expect it to result in substantial delays. If the "Grace Period Notice" is sent contemporaneously with the breach or default letter, the new thirty day grace period will be merged into an existing grace period that most mortgagees already have established with the breach letters.
However, since the law goes into effect immediately upon signing and since no new foreclosures can be filed without first complying with the required "Grace Period Notice," an expected thirty day delay will occur. This delay could be extended to a total of up to sixty days if the mortgagee receives notice that the borrower is working with an approved counseling agency.
Therefore, we urge you to begin sending the "Grade Period Notice" on each and every account that a breach or demand letter is sent to a borrower. Further, the "Grade Period Notice" should be mailed immediately on all accounts that have been referred for foreclosure so that there is no further delay beyond the thirty days required by the statute. These two steps will greatly minimize any further delays.
If you have any questions on this information, please contact Mr. Michael S. Bablo, Esq.
Michael is an associate in the Real Estate Default Group of the Chicago office focused on foreclosure services for Weltman, Weinberg & Reis Co., L.P.A. He can be reached at (312) 253-0617 or via e-mail at mbablo@weltman.com.
See Bill Entirety http://www.ilga.gov/legislation/95/SB/PDF/09500SB2513enr.pdf
Imported Chinese Drywall may have harmful materials EPA discusses
http://www.chinesedrywall.com/uploads/EPA_Analysis.pdf
The U.S. Environmental Protection Agency (EPA) confirmed Chinese drywall testing found that samples of wallboard imported from China between 2004 and 2008, contains certain potentially harmful chemicals that are not found in drywall manufactured in the United States.
To view the full EPA Analysis, please click on the following link:EPA Analysis As discussed below, the Senate Committee on Commerce, Science, and Transportation convened a subcommittee hearing on Health and Product Safety Issues Associated with Imported Drywall on Thursday, May 21, 2009.
To view a webcast of the Hearing, please click on the following link:Health and Product Safety Issues Associated with Imported Drywall
A request for $2 million in emergency funding failed to move forward in the U.S. Senate, however the Consumer Product Safety Commission and other federal agencies will continue investigating the potential effects of imported drywall.
The U.S. Environmental Protection Agency (EPA) confirmed Chinese drywall testing found that samples of wallboard imported from China between 2004 and 2008, contains certain potentially harmful chemicals that are not found in drywall manufactured in the United States.
To view the full EPA Analysis, please click on the following link:EPA Analysis As discussed below, the Senate Committee on Commerce, Science, and Transportation convened a subcommittee hearing on Health and Product Safety Issues Associated with Imported Drywall on Thursday, May 21, 2009.
To view a webcast of the Hearing, please click on the following link:Health and Product Safety Issues Associated with Imported Drywall
A request for $2 million in emergency funding failed to move forward in the U.S. Senate, however the Consumer Product Safety Commission and other federal agencies will continue investigating the potential effects of imported drywall.
Fannie Mae Upate on HAMP program and misc info
FHLMC Bulletin 2009-13
Wednesday, 27 May 2009
Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Bulletin 2009-13. With this Single-Family Advisory e-mail and today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-13, we are announcing multiple servicing updates, including:
Updates to Requirements for the Home Affordable Modification Program (HAMP)
Enhancements to Electronic Default Reporting (EDR) for all Mortgages that Have an Alternative to Foreclosure Being Pursued
Revisions to Servicer Performance Profile Default Management Weighting
Changes to Tier One Premium Awards
Revisions to Servicing Requirements
Information on Recent Treasury Announcements
Updates to Requirements for the Home Affordable Modification ProgramWith today’s Guide Bulletin, we are:
Requiring Servicers to solicit borrowers who are 31 days or more delinquent on or after July 1, 2009, by no later than the 50th day of delinquency; also providing additional guidance on borrower solicitation by phone or electronic means.
Permitting the collection of certain borrower loss mitigation information and documents electronically.
Providing additional guidance on the collection of Government Monitoring Data using the revised HAMP Hardship Affidavit that was posted on April 21, 2009.
Revising the requirements for reporting and remitting a payoff of a mortgage with a partial principal forbearance and revising the required monthly Spreadsheet for Reporting Mortgages with a Partial Principal Forbearance template.
Beginning June 1, 2009, Servicers may report a number of new EDR default action codes and a new default reason code that will become mandatory reporting as of October 1, 2009. Enhancements to Electronic Default Reporting for All Mortgages that Have an Alternative to Foreclosure Being PursuedWe are introducing new EDR default action codes in order for Servicers to provide us with information on mortgages they are pursuing an alternative to foreclosure. Some of the new EDR default action codes are specific to HAMP, while others apply to all mortgages, including current mortgages, for which the Servicer is pursuing an alternative to foreclosure. We are also adding the new default reason code “HMP” so Servicers can identify which loans that are in a Home Affordable Modification Trial Period. This new default reason code must be reported in conjunction with the “09-Forbearance” default action code. Servicers are required to use these new EDR codes beginning October 1, 2009. Guide Exhibit 82, Electronic Default Reporting Transmission Code List, has been updated to reflect these new codes and an updated version of the EDR Quick Reference Guide will be posted on the Learning Center by May 31, 2009.Revisions to Servicer Performance Profile Default Management WeightingUnprecedented market conditions and a crucial new role for Servicers in helping at-risk and delinquent borrowers through the Making Home Affordable program require changes to the Servicer Performance Profile. To maintain the Profile as a meaningful, accurate measurement and guide to continual improvement of servicing performance, we are adjusting the weighting of the Default Management metrics with your July 1, 2009, performance. The revised Default Management metrics will focus more on your loss mitigation, inventory management, and data integrity performance and less on collections management performance. Servicers will continue to be rated on the same Servicer Performance Profile weighting under Investor Reporting and Remitting.As the market continues to adjust this year, we will continue to evaluate the Servicer Performance Profile. If we find that the program warrants additional revisions, we’ll communicate those changes to you.Changes to Tier One Premium AwardsIn light of the current market conditions, with this Single-Family Advisory e-mail, we are discontinuing some of the incentives that correspond to the Tier One Premium Awards for all Servicers’ 2009 performance.
Effective immediately, we are no longer offering monetary performance incentives for Tier One Platinum, Tier One Gold, and Hall of Fame Servicers. In addition, both Tier One Platinum and Tier One Gold’s technology compensation will not be offered in 2009.
We will, however, continue to provide Tier One Platinum Servicers with a $10,000 non-monetary wavier to use toward EarlyIndicator® renewal fees or to acquire the tool and a $1,000 non-monetary waiver to use toward Freddie Mac training and events. Tier One Gold Servicers will also continue to receive a $500 non-monetary waiver to use toward Freddie Mac training classes and events. All Tier One waivers for transfer of servicing and database change fees will remain in effect.
We will not provide public promotion of the Tier One Premium Awards for 2008 and 2009 performance. We will, however, continue to notify you of your Tier One and Hall of Fame status through your servicing representative.
Our robust Workout Incentive Program, which is available to Servicers regardless of their Tier rating, remains available to help offset the costs of pursuing alternatives to foreclosure. Servicers will continue to receive monetary incentives, depending on the type of successful workout, in accordance to the Guide.
As we are with the Servicer Performance Profile, we will continue to evaluate the Tier One Premium Awards throughout the year. If the program requires updates, we’ll communicate those changes to you. Revisions to Servicing RequirementsWith today’s Guide Bulletin, we are also:
Updating the Loss Mitigation Transmittal Worksheet to include data elements specific to HAMP and incorporating it into the Guide as new Form 1128, which is now an interactive Microsoft® Excel spreadsheet.
Updating Guide Chapter B65 to reflect that a HAMP-eligible borrower must first be considered under Guide Chapter C65. Servicers must implement the requirements for HAMP and also directs them to consider borrowers who are in a 0 to 30 day delinquency status to first be considered for a Freddie Mac Relief Refinance MortgageSM under Guide Chapter 24. If the borrower is not eligible for a modification under HAMP, the Servicer must then consider the borrower for other alternative to foreclosure options outlined in Guide Chapter B65.
Announcing new, standardized form subordination agreements, which were developed by Freddie Mac and Fannie Mae in coordination with the American Land Title Association. These standard form agreements are designed for lenders and Servicers to use to resubordinate subordinate liens when working with borrowers on modifications or refinances, including loan modifications under HAMP and Freddie Mac Relief Refinance Mortgages. The new agreements will be available on our Uniform Instruments Web page by June 1. Information on Recent Treasury AnnouncementsThe U.S. Department of the Treasury recently announced that they are expanding HAMP to include requirements on the use of short sales and deeds-in-lieu of foreclosure in the event a borrower cannot complete the modification process. They also announced a second lien program to help struggling borrowers lower their monthly payments on their second mortgage. We are currently working through the policy and operational guidelines, and we will communicate any necessary changes to our requirements in a future Guide Bulletin.
Wednesday, 27 May 2009
Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Bulletin 2009-13. With this Single-Family Advisory e-mail and today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-13, we are announcing multiple servicing updates, including:
Updates to Requirements for the Home Affordable Modification Program (HAMP)
Enhancements to Electronic Default Reporting (EDR) for all Mortgages that Have an Alternative to Foreclosure Being Pursued
Revisions to Servicer Performance Profile Default Management Weighting
Changes to Tier One Premium Awards
Revisions to Servicing Requirements
Information on Recent Treasury Announcements
Updates to Requirements for the Home Affordable Modification ProgramWith today’s Guide Bulletin, we are:
Requiring Servicers to solicit borrowers who are 31 days or more delinquent on or after July 1, 2009, by no later than the 50th day of delinquency; also providing additional guidance on borrower solicitation by phone or electronic means.
Permitting the collection of certain borrower loss mitigation information and documents electronically.
Providing additional guidance on the collection of Government Monitoring Data using the revised HAMP Hardship Affidavit that was posted on April 21, 2009.
Revising the requirements for reporting and remitting a payoff of a mortgage with a partial principal forbearance and revising the required monthly Spreadsheet for Reporting Mortgages with a Partial Principal Forbearance template.
Beginning June 1, 2009, Servicers may report a number of new EDR default action codes and a new default reason code that will become mandatory reporting as of October 1, 2009. Enhancements to Electronic Default Reporting for All Mortgages that Have an Alternative to Foreclosure Being PursuedWe are introducing new EDR default action codes in order for Servicers to provide us with information on mortgages they are pursuing an alternative to foreclosure. Some of the new EDR default action codes are specific to HAMP, while others apply to all mortgages, including current mortgages, for which the Servicer is pursuing an alternative to foreclosure. We are also adding the new default reason code “HMP” so Servicers can identify which loans that are in a Home Affordable Modification Trial Period. This new default reason code must be reported in conjunction with the “09-Forbearance” default action code. Servicers are required to use these new EDR codes beginning October 1, 2009. Guide Exhibit 82, Electronic Default Reporting Transmission Code List, has been updated to reflect these new codes and an updated version of the EDR Quick Reference Guide will be posted on the Learning Center by May 31, 2009.Revisions to Servicer Performance Profile Default Management WeightingUnprecedented market conditions and a crucial new role for Servicers in helping at-risk and delinquent borrowers through the Making Home Affordable program require changes to the Servicer Performance Profile. To maintain the Profile as a meaningful, accurate measurement and guide to continual improvement of servicing performance, we are adjusting the weighting of the Default Management metrics with your July 1, 2009, performance. The revised Default Management metrics will focus more on your loss mitigation, inventory management, and data integrity performance and less on collections management performance. Servicers will continue to be rated on the same Servicer Performance Profile weighting under Investor Reporting and Remitting.As the market continues to adjust this year, we will continue to evaluate the Servicer Performance Profile. If we find that the program warrants additional revisions, we’ll communicate those changes to you.Changes to Tier One Premium AwardsIn light of the current market conditions, with this Single-Family Advisory e-mail, we are discontinuing some of the incentives that correspond to the Tier One Premium Awards for all Servicers’ 2009 performance.
Effective immediately, we are no longer offering monetary performance incentives for Tier One Platinum, Tier One Gold, and Hall of Fame Servicers. In addition, both Tier One Platinum and Tier One Gold’s technology compensation will not be offered in 2009.
We will, however, continue to provide Tier One Platinum Servicers with a $10,000 non-monetary wavier to use toward EarlyIndicator® renewal fees or to acquire the tool and a $1,000 non-monetary waiver to use toward Freddie Mac training and events. Tier One Gold Servicers will also continue to receive a $500 non-monetary waiver to use toward Freddie Mac training classes and events. All Tier One waivers for transfer of servicing and database change fees will remain in effect.
We will not provide public promotion of the Tier One Premium Awards for 2008 and 2009 performance. We will, however, continue to notify you of your Tier One and Hall of Fame status through your servicing representative.
Our robust Workout Incentive Program, which is available to Servicers regardless of their Tier rating, remains available to help offset the costs of pursuing alternatives to foreclosure. Servicers will continue to receive monetary incentives, depending on the type of successful workout, in accordance to the Guide.
As we are with the Servicer Performance Profile, we will continue to evaluate the Tier One Premium Awards throughout the year. If the program requires updates, we’ll communicate those changes to you. Revisions to Servicing RequirementsWith today’s Guide Bulletin, we are also:
Updating the Loss Mitigation Transmittal Worksheet to include data elements specific to HAMP and incorporating it into the Guide as new Form 1128, which is now an interactive Microsoft® Excel spreadsheet.
Updating Guide Chapter B65 to reflect that a HAMP-eligible borrower must first be considered under Guide Chapter C65. Servicers must implement the requirements for HAMP and also directs them to consider borrowers who are in a 0 to 30 day delinquency status to first be considered for a Freddie Mac Relief Refinance MortgageSM under Guide Chapter 24. If the borrower is not eligible for a modification under HAMP, the Servicer must then consider the borrower for other alternative to foreclosure options outlined in Guide Chapter B65.
Announcing new, standardized form subordination agreements, which were developed by Freddie Mac and Fannie Mae in coordination with the American Land Title Association. These standard form agreements are designed for lenders and Servicers to use to resubordinate subordinate liens when working with borrowers on modifications or refinances, including loan modifications under HAMP and Freddie Mac Relief Refinance Mortgages. The new agreements will be available on our Uniform Instruments Web page by June 1. Information on Recent Treasury AnnouncementsThe U.S. Department of the Treasury recently announced that they are expanding HAMP to include requirements on the use of short sales and deeds-in-lieu of foreclosure in the event a borrower cannot complete the modification process. They also announced a second lien program to help struggling borrowers lower their monthly payments on their second mortgage. We are currently working through the policy and operational guidelines, and we will communicate any necessary changes to our requirements in a future Guide Bulletin.
Wednesday, May 6, 2009
Final Score: $8,000 for Homebuyers
Les Christie, CNNMoney.com staff writer
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm receptionThe housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm receptionThe housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
Monday, May 4, 2009
Wachovia asks REALTORS to help with Short Sales
Distressed homeowners with Wachovia, formerly World Savings, as a lender are seeing a glimmer of home when it comes to saving their homes from foreclosure.
Unlike other banks, Wachovia has short sale managers in the field to talk to distressed homeowners and help them explore options before going to foreclosure. The process is simple and straight forward for the homeowner.
The Wachovia Short Sale manager meets with the homeowner to determine that there is truly a hardship. The seller may be asked to provide a financial statement as well as other information such as tax returns. The Short Sale Manager assess the situation, orders a Brokers Professional Opinion, and then is able to approve the hardship in just a matter of days. Of course if there is a chance that the seller may qualify for a loan modification, that is also an option.
This does several things for the distressed homeowner:
It gives them piece of mind knowing that they are dealing with their lender directly and not some third party collection team;
It gives them faith in their Realtor, and the industry, by seeing the two entities work together to provide help and assistance;
It stops the foreclosure process and takes away the burden and the embarrassment of a foreclosure;
It expedites the short sale process into a period of weeks, as opposed to months, allowing the homeowner to move on with their lives;
It allows the homeowner to reestablish credit faster than if they had to go to through the foreclosure process.
This also helps Wachovia:
Wachovia's short sale managers are a great public relations team for Wachovia to the industry, and to distressed homeowners;
It ultimately saves Wachovia time and money by properly pricing the home and determining the hardship from the start - as opposed to the extended process, which results in a greater loss, especially in a declining market.
Wachovia should be applauded for their efforts and held up as an example for other financial institutions. Working together only helps the distressed homeowner and our industry.
Currently have a World Savings, Wachovia, Golden West, Home Loan and your property is upside down. You would like to List your property than please contact me today.
Unlike other banks, Wachovia has short sale managers in the field to talk to distressed homeowners and help them explore options before going to foreclosure. The process is simple and straight forward for the homeowner.
The Wachovia Short Sale manager meets with the homeowner to determine that there is truly a hardship. The seller may be asked to provide a financial statement as well as other information such as tax returns. The Short Sale Manager assess the situation, orders a Brokers Professional Opinion, and then is able to approve the hardship in just a matter of days. Of course if there is a chance that the seller may qualify for a loan modification, that is also an option.
This does several things for the distressed homeowner:
It gives them piece of mind knowing that they are dealing with their lender directly and not some third party collection team;
It gives them faith in their Realtor, and the industry, by seeing the two entities work together to provide help and assistance;
It stops the foreclosure process and takes away the burden and the embarrassment of a foreclosure;
It expedites the short sale process into a period of weeks, as opposed to months, allowing the homeowner to move on with their lives;
It allows the homeowner to reestablish credit faster than if they had to go to through the foreclosure process.
This also helps Wachovia:
Wachovia's short sale managers are a great public relations team for Wachovia to the industry, and to distressed homeowners;
It ultimately saves Wachovia time and money by properly pricing the home and determining the hardship from the start - as opposed to the extended process, which results in a greater loss, especially in a declining market.
Wachovia should be applauded for their efforts and held up as an example for other financial institutions. Working together only helps the distressed homeowner and our industry.
Currently have a World Savings, Wachovia, Golden West, Home Loan and your property is upside down. You would like to List your property than please contact me today.
Friday, May 1, 2009
Sacramento Road Closures UPDATED TODAY
Click here to see if your effected by the current road closures in Sacramento, CA. http://www.msa.saccounty.net/Roads/default.asp
Multiple Locations (See Details for Street Names)
April 13 to June 227:30 AM to 4:30 PM
Lane ClosureThere will be multlple lane closures keeping at least one lane open in each direction at all times. Streets affected are: Dudley Blvd from Howard Street to Freedom Park; Watt Avenue to Price Avenue on James Street; Watt Avenue to Luce Avenue on Palm Avenue; Watt Avenue to Luce Avenue on Peacekeeper; Dudley Blvd./ James Way Intersection; Arnold Way from James Street to Howard Street; Dudley Blvd/Peacekeeper Way Intersection; Dudley Blvd/Palm Street Intersection. REASON FOR CLOSURES: ADA Ramp replacement, paving and Slurry seal. DISTRICT:1
For more road construction projects in your area or road clsures please click on the link above.
Multiple Locations (See Details for Street Names)
April 13 to June 227:30 AM to 4:30 PM
Lane ClosureThere will be multlple lane closures keeping at least one lane open in each direction at all times. Streets affected are: Dudley Blvd from Howard Street to Freedom Park; Watt Avenue to Price Avenue on James Street; Watt Avenue to Luce Avenue on Palm Avenue; Watt Avenue to Luce Avenue on Peacekeeper; Dudley Blvd./ James Way Intersection; Arnold Way from James Street to Howard Street; Dudley Blvd/Peacekeeper Way Intersection; Dudley Blvd/Palm Street Intersection. REASON FOR CLOSURES: ADA Ramp replacement, paving and Slurry seal. DISTRICT:1
For more road construction projects in your area or road clsures please click on the link above.
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