From the monthly archives:

January 2009

Loan Modification Can Stop the Foreclosure Crisis

by Moe Bedard

If we can spend $700 billion to bail out the brokers on Wall Street, the very least we can do is allow working Americans who are willing to repay their debts as best they can, under court supervision, the dignity of staying in their homes. With one in 10 homeowners behind on their mortgages, and 10 million foreclosures expected over the next several years, the time for meaningful action is now.

Mr. Conyers, a Democrat from Michigan, is the chairman of the House Judiciary Committee.

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Fannie Mae Strikes Deal With NACA to Modify Mortgages

by Moe Bedard

NACA, the Neighborhood Assistance Corporation of America has reached an agreement with Fannie Mae to offer loan modifications and cts as an intermediary between borrowers and lenders.

The agreement was reached after NACA and Bruce Marks led approximately 100 consumer activists and homeowners in late October to Fannie Mae’s front steps. NACA’s tactics have proven to be highly effective and they wasted no time in staging a successful protest outside Fannie Mae headquarters in Washington D.C.

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3 Tips for Renegotiating Your Mortgage

by Moe Bedard

If you’re willing to make your loan payments, you’re already way ahead of the many borrowers who have walked away from their homes, says Moe Bedard, president of LoanSafe Solutions. The upshot? Banks have more incentive than ever to work with you. Plunging property values mean they’re recovering less now on foreclosures. Plus, many that received cash infusions from the U.S. Treasury are under pressure to show that they’re responding to the housing crisis. Take advantage.

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Hawaii lawmakers consider bill to slow down home foreclosures

by Moe Bedard

Hawai’i homeowners facing foreclosure would get a little more time, and perhaps more assistance, to help them avoid losing their property, under a bill introduced at the state Legislature.

The bill aims to help reduce Hawai’i foreclosure cases which soared last year and are expected to keep rising amid the economic downturn and softening real estate market, though the bill’s result may only be a delay of foreclosures by a month or two.

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Minnesota Attorney General Sues Two Loan Modification Companies

by Moe Bedard

Attorney General Lori Swanson today filed lawsuits against two so-called mortgage “foreclosure consultants” alleging that they targeted homeowners facing foreclosure with illegal up-front fees and empty promises to save their homes. The lawsuits are against IMC Financial Services, LLC (“IMC”) and American Financial Corp. d/b/a National Foreclosure Counseling Services (“NFC”), both with offices in Florida.

The [...]

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Ohio Attorney General Sues Two Loan Modification Firms

by Moe Bedard

Ohio Attorney General Richard Cordray has filed a lawsuit against two Cincinnati-based foreclosure rescue companies accused of failing to deliver on their promises to save consumers from foreclosure. The suit, filed in the Hamilton County Court of Common Pleas, charges Foreclosure Assistance USA, Inc. (FA USA) and American Foreclosure Professionals, Inc. (AFP) with several violations of Ohio consumer protection law.

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Pennsylvania Attorney General Reaches $150 Settlement With Countrywide

by Moe Bedard

Attorney General Tom Corbett today announced that the Attorney General’s Office has reached a more than $150 million settlement with Countrywide Financial Corporation to obtain mortgage relief and cash assistance for thousands of Pennsylvania residents with loans through Countrywide.

Corbett said his office has been investigating Countrywide for several months and the investigation has centered on the subprime mortgages that were sold through Countrywide.

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The Federal Reserve Implements Loan Modification Program

by Moe Bedard

The Federal Reserve’s Ben Bernake sent a letter to the Senate Banking Committee announcing a new loan modification program to help keep struggling homeowners in their homes. The program will be applied to whole owned mortgage assets that it aquired in the recent Fed assisted JPMorgan Chase’s purchase of Bear Stearns and support of insurance giant AIG.

The Bear Stearns portfolio is worth approximately $27 billion and it is not clear how much of the $27 billion is tied to residential mortgages. AIG assets include a $20 billion portfolio of mortgage backed securities (MBS) and a $27 billion portfolio that includes securities that are backed by mortgages.

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U.S. House Approves Mortgage Bankruptcy Measure

by Moe Bedard

The House Panel passed a measure yesterday to allow bankruptcy courts to modify loans on primary residences for troubled borrowers.

The controversial legislation that has remained stagnate in Washington for more than a year seemed to be gain serious momentum as Obama took office and the Democrats gained more power on the Hill. The new mortgage bankruptcy rules being proposed would mean a huge victory for struggling homeowners who have had little to no protection when dealing with their lenders and mortgage servicers.

Loan modifications and mortgage “cram downs” AKA “principle reductions” would be eligible in bankruptcy court and allow judges to whack the values and mortgage balances on thousands and possible millions of homes.

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Michigan Sheriff Sends Foreclosure Letter To Gov.

by Moe Bedard

Evans wrote he would like to see a moratorium on home mortgage foreclosures for six months. He’s also asking the governor to set up a Blue Ribbon Commission to find ways to provide affordable mortgages.

Evans is a candidate for the mayor of Detroit. The election is Feb. 24.

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Massachusetts AG Martha Coakley voices support for anti-foreclosure bills

by Moe Bedard

Under the measure, owner-occupants with risky mortgage features such as interest-only loans or loans with short-term introductory interest rates or adjustable rate mortgages, would be offered a loan modification based on the home’s current value.

“Our legislation also provides a safe harbor for creditors who comply,” she said. “In other words, we can be the bad guy to get these loans modified in a way that makes sense for everybody.”

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Foreclosure Mediation Available in all 88 Counties in Ohio

by Moe Bedard

Developed in response to Ohio’s rising mortgage crisis by the Supreme Court’s Dispute Resolution Section, the first-of-its-kind model in the nation provided local courts with step-by-step directions to launch foreclosure mediation programs.

The model includes best practices, related documents, forms and other resources and is designed for courts to modify. Since not every foreclosure case can be resolved through mediation, the model assists courts in assessing information provided by both the homeowner and the lender to find a mutually acceptable agreement that is both commercially reasonable and sustainabl

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Fannie Mae cuts jobs in mortgage division as they add jobs to combat foreclosures

by Moe Bedard

Fannie Mae  is cutting hundreds of local jobs at its Washington headquarters as it adds workers to combat foreclosures.

Fannie said it’s cutting jobs in its communications, technology and single-family homes divisions and adding staff to its Dallas division where Fannie Mae operates their foreclosure prevention and loss mitigation efforts. The job reductions in Washington are [...]

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How To Get A Successful Loan Modification

by Moe Bedard

What should you do? The first step is to analyze your financial situation,

1. What percentage of your gross income (your income before tax deductions) is now devoted to housing costs, meaning mortgage principal, interest, taxes and insurance — PITI.
2. How much could you pay each month if PITI was limited to 38 percent of your gross income?
3. How much could you pay each month if PITI was limited to 31 percent of your gross income? This is an important question because the FDIC has been using a 31-percent benchmark when modifying loans made by IndyMac, the lender taken over by the FDIC in 2008. The 31-percent standard may well spread to other programs.

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Where it Matters Most: At the Core of the American Dream, the Dream of Homeownership

by Moe Bedard

“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.” – Abraham Lincoln, Sixteenth President of the United States of America

The most remarkable characteristic of Lincoln’s optimistic quote is not his faith in Country, God or even in the Office of The President to calm the storm of national crises. It is the people themselves that Lincoln has unquestioning faith in.

Whether America is now suffering from a great economic crisis is beyond question.

We should not look to government, to our leaders or even to our sitting President, then, in an effort to alleviate the current economic crisis. In following the spirit of Lincoln’s deep seated convictions, we should look to each other to repair our dire circumstances.

Millions of jobs have been lost since the beginning of 2008. For over a year credit has been scarce for the average American to acquire, even if it would save them from utter economic collapse. Perhaps trillions of dollars in toxic mortgages have flooded the international markets. Subsequently, home values across the nation have dropped precipitously.

A great majority of recent homebuyers are straddled with mortgage debts that exceed the values of their homes. These problems are made worse by the fact that over the last decade, exotic home loans like interest only, short term adjustable mortgages and negative amortization loans have been made to a vast number of American Consumers.

The resulting problem is so immense economists and legislators can barely conceptualize how to manage it.

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FTC Obtains $28 Million From Bear Stearns and EMC

by Moe Bedard

The Federal Trade Commission today announced that the agency returned almost $28 million to consumers this week as a result of a settlement with The Bear Stearns Companies, LLC and EMC Mortgage Corporation. Using the defendants’ records, about 86,000 consumers who had mortgage loans serviced by EMC have been mailed redress checks.

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Countrywide Agrees To Modify Predatory Loans For Tennesseans

by Moe Bedard

The lawsuit said Countrywide misled customers by offering low “teaser” rates or no closing costs to induce borrowers into loans they couldn’t afford and without disclosing the risk, leading to rising delinquencies and foreclosures.

“(Countrywide’s) practices also have caused a decrease in home values and deterioration of neighborhoods throughout the country and including Tennessee,” the lawsuit [...]

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Loan Modification Companies: Saviors Or Scams?

by Moe Bedard

I got an interesting email today asking about “loan modification companies.”
These have sprung up like crabgrass in the midst of the foreclosure crisis, many of them run by former subprime mortgage brokers or real estate brokers who don’t have much work these days.
One Google [GOOG  Loading...      ()   ] search, and they pop up instantly with [...]

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Attention Washington: Do Your Jobs and Stop the Banks BULLSHIT!!!!

by Moe Bedard

In a revealing example of what she says the average homeowner faces, a California Congresswoman spent more than two hours on the phone trying, without success, to find someone at the Bank of America who could help a struggling constituent modify his mortgage payments. ABC News Nightline cameras were rolling as Congresswoman Maxine Waters (D-CA) [...]

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Predatory Lending by Mortgage Brokers Magnify the Foreclosure Crisis

by Moe Bedard

Many of these OC brokers operated for years in the wide open and most recently (from 2005-2007), selling nothing but negative amortization mortgages (AKA Pay Option ARM or Pick a Pay) throughout the Golden State to borrowers that should have never, ever been placed in that loan.

$20-30,000 commission checks for a loan in 2004-2005 were as common as foreclosures are today….

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Countrywide Lawyers Say Loan Modification Ads Are Mere Commercial Puffery

by Moe Bedard

In marketing, advertising and testimony before Congress, Countrywide Home Loans has said repeatedly that it is working hard to modify the mortgages of financially strapped borrowers caught up in the subprime meltdown. But in a New Hampshire court, attorneys for the lending giant are singing a different tune, describing such assurances as “mere commercial puffery.”

“It’s breathtaking,” attorney Mary Frances Stewart of Concord, N.H., said of Countrywide’s response to the lawsuit she and co-counsel Krista Atwater filed in Merrimack County Superior Court. In its response, “Countrywide is saying, ‘We don’t have any obligation or even necessarily the intention of actually modifying these loans,’ and yet they’re representing that they do.”

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Real Estate Appraisers Face Big Changes

by Moe Bedard

Following claims that appraisers rubber-stamped inflated home prices, new rules are coming that will attempt to make them more independent
The appraisal industry has justifiably come under fire for its role in the great housing bust. Property appraisals, required by lenders before a loan is made, are supposed to provide an independent assessment of the home’s [...]

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REAL ESTATE: HOMEOWNERS HAVE COMPANY

by Moe Bedard

Vacant land owners make up the bulk of commercial property defaults in Las Vegas, said Travis Nelson, assistant vice president of commercial sales at Nevada Title Co.

“There’s no income from the land. It’s hard to carry. You have a lot of higher-interest loans from private sources and hard money lenders,” Nelson said.

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Rich Dad Aint So Rich No More: The Great Real Estate Do Over

by Moe Bedard

The next three years in “all” sectors of real estate will make the Great Depression look more like a mild case of postpartum depression and massive defaults in every real estate sector send much of our Rich Dad’s to the foreclosure auction block.

Many people who were once real estate rich, are now actually poorer than many people who didnt speculate or buy real estate in the last 5 years. I know because I see and talk to these people almost every day.

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Congress takes up foreclosure relief plans

by Moe Bedard

Now, as Congress prepares to authorize the second $350 billion in spending for the program, Democratic leaders are pressing for changes that would expand beyond the banking industry, which has been the primary beneficiary of the program.

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American Modification Agency Sued for $100 Million

by Moe Bedard

American Modification Agency (AMA), a massive Rhode Island loan modification firm looks like there are in hot legal water right now and I am not surprised one bit. I knew the day of reckoning would come for this East Coast loan modification chop shop.

What were my first clues? A the time they had a website with nothing really on it. No real information and the BIG CLUE, no address for the firm. Obviously, companies that do not put their address on their websites do this because they do not want to be found and when you are in business and you do not want to be found, it is usually because your are scamming people. Right?

This compnay, AMA, still does not list an address for the firm. Here is their contact page. They don’t even list a phone number!!!! WTF! A company that does not list an address and not even a phone number is as scary as it gets!!!!

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Chase to Offer $1.1 Trillion in Loan Modifications

by Moe Bedard

Great news for Chase borrowers! You now have the most loan modification friendly lender in the country.

Chase announced Friday that they plan to modify a whopping $1.1 trillion in loans it services that tied up in securitizations (AKA Mortgage Backed Securities or Investor Owned Loans). They also plan to include mortgages in its portfolio .

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Fannie Mae Gets Foreclosures and Rentals Right

by Moe Bedard

“Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing,” said Michael Williams, chief operating officer of Fannie Mae. “This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates.

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Why Loan Modifications Often Don’t Work

by Moe Bedard

Despite modifications, many homeowners are still underwater.

Borrowers who owe more on their homes than they are worth have little incentive to stay there, even if their payments are lower. “I’m a big advocate for principal reduction because when people are underwater by hundreds of thousands of dollars, they walk away,” says Moe Bedard, the founder of LoanSafe Solutions, a Corona, Calif.-based company that works with attorneys specializing in loan modifications.

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Home loan modification – online support resources

by Moe Bedard

There are online resources available where you can discuss mortgage difficulties. The anonymity of the web coupled with the sense of not being alone can be a late-night security blanket while you are in the midst of resolving your financial issues.

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Cram Down Nation: Do Lenders Fear Obama?

by Moe Bedard

Obama Bankruptcy quotes from July 2008:

Families, he said, who “are being preyed upon by predatory lenders. If you’re protecting America, America should be protecting you from unfair bankruptcy laws.”

He said he would create a “fast-track bankruptcy practice” for military families, which would ease restrictions against declaring bankruptcy, eliminate “unnecessary” paperwork and “let them keep a greater share of the value of their home.”

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FACTBOX: Obama’s new priorities for financial rescue fund

by Moe Bedard

A link to some of the new initiatives and reforms to the Troubled Asset Relief Program favored by the Obama team that have backing from Rep. Barney Frank, the chairman of the House of Representatives Financial Services Committee.

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The Federal Reserves Kohn on the Troubled Asset Relief Program “TARP”

by Moe Bedard

Kohl, before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C. Jan. 13. 2009.

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Wider Role Urged for Housing Choice

by Moe Bedard

As waves of foreclosures increased over the last year and broader economic distress has spread, the housing department has taken a notably low-profile role, overshadowed not only by the Treasury Department but also the Federal Deposit Insurance Corporation.

One predecessor, Alphonse Jackson, resigned under pressure after boasting that he awarded contracts on the basis of political favoritism. (He later claimed to be joking.) The current secretary, Steve Preston, has a background in financial services with little experience in housing policy.

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Mortgage Bankruptcy: Can Bankruptcy Save Your Home?

by Moe Bedard

I have been writing about mortgage bankruptcy for quite sometime and the how it would benefit struggling homeowners. So, I thought I would condense some of bankruptcy basics for you to study and get educated on the subject.

Please remember that Citi is the only lender that has agreed to cooperate with the new bankruptcy deal and it is with conditions. The bankruptcy bill has not been passed and conditions must be met to qulaify.

In a statement, Citigroup said it would support Durbin’s legislation provided that it applied only to mortgages in effect before passage of the act. To be eligible, borrowers would have to contact their lenders and try to work things out before filing for bankruptcy.

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Foreclosure Scam Alert: The Land Patent Fraud

by Moe Bedard

Prosecutors said Smith and the others sold “land patents” to homeowners facing foreclosure and told them that the patents would make them a sovereign nation that would be protected from the banks. He said the banks would own the homes but not the land underneath them, and essentially, the homes would not be foreclosed on because they would be worthless to the banks without the land, said prosecutor Eric Ludwig.

At least 17 people fell for the scheme, prosecutors said, and lost tens of thousands of dollars.

The District Attorney’s Office is still investigating.

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Coakley and Kenner:Guidance for homeowners: Modifying your mortgage

by Moe Bedard

Massachusetts continues to experience a dramatic surge in foreclosures, often due to deceitful and predatory lending practices. Many foreclosures have resulted from loan practices and products that were destined to fail because lenders failed to reasonably assess the borrower’s ability to repay before lending money.

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Sheila Bair Likely to Remain at the FDIC

by Moe Bedard

Sheila Bair should have nothing but the absolute respect from the consumers on Main Street for whom she protects. However, ask the banks for which she regulates and the colleagues that she often disagrees with and you may get another answer.

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Congress Forges Mortgage Bankruptcy Deal With Citi

by Moe Bedard

U.S. Senator Dick Durbin (D-IL), with Congressman John Conyers (D-MI), Senator Chris Dodd (D-CT), Chuck Schumer (D-NY) and Congressman Brad Miller (D-NC) announced that an agreement was reached with Citigroup today, on legislation that will allow homeowners at risk of foreclosure to alter the terms of their mortgages in bankruptcy.

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Beware of Mortgage & Foreclosure Scams

by Moe Bedard

Are you having trouble making your home mortgage payments? Are you facing foreclosure on your home? Get all the facts before you pay someone to help you work out your mortgage problems.

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Moe’s 2009 Predictions Become Reality

by Moe Bedard

It looks like some of my mortgage and housing predictions for 2009 that I posted on January 1st are starting to become reality.

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Countrywide Loan Modification Mania

by Moe Bedard

Last week, Monday, Tuesday and today was just insane with the amount of loan modification approvals that I witnessed coming in from Countrywide Home Loans. Homeowners that have been waiting for months, now were offered sweetheart deals.

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Tough ‘09 Is Seen for Commercial Real Estate

by Moe Bedard

This year will be among the worst for the U.S. commercial real estate industry, as unemployment leads to a drop of as much as 30 percent in rents in some places and more office towers from Washington to Chicago and Los Angeles sit empty, according to several research reports from large commercial real estate service companies.

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Housing Push for Hispanics Spawns Wave of Foreclosures

by Moe Bedard

Mortgage brokers became a key portion of the lending pipeline. Phi Nguygn, a former broker, worked at two suburban Washington-area firms that employed hundreds of loan originators, most of them Latino. Countrywide and other subprime lenders sent account representatives to brokerage offices frequently, he says. Countrywide didn’t respond to calls requesting comment.

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The NY Fed Purchases $500 Billion in Mortgage Backed Securities

by Moe Bedard

The New York Federal Reserve announced today that it is purchasing $500 billion in mortgage backed securities in order to support the U.S. housing market.

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