News, Research & Insights for American Homeowners, Patriots & Constitutional Conservatives
Oh my.
Good thing “Julia” was a working mom or else we’d probably have to pay for her antidepressants too. Second look at the blue social model? My gut reaction: Of course stay-at-home moms are stressed, they live in poorer households than women who work do. This result is simply an artifact of worrying about money, not [...]
Just in time for New Year's resolutions on 1) reading more, 2) paring back your own debt, and 3) learning more about consumer bankruptcy to help you do your job (if you are a lawyer, judge, or academic, media, etc), the book, Broke: How Debt Bankrupts the Middle Class was released from Stanford University Press.
The book makes extensive use of the 2007 Consumer Bankruptcy Project data, providing statistics, analysis, and commentary on consumer bankruptcy and debt topics. I edited the volume, and chapter contributors are many Credit Slips regulars or guest bloggers--Jacob Hacker, Bob Lawless, Kevin Leicht, Angela Littwin, Deborah Thorne, and Elizabeth Warren--along with other top scholars.
In the next few weeks, the chapter authors will blog here at Credit Slips about the research featured in the book, but to whet your appetite, I've included a table of contents for the book after the break. The book is accessible to lay readers but its scholarly focus provides plenty of data to educate and surprise even bankruptcy experts. Working on the book, I certainly learned a great deal about timely and important topics such as how pro se debtors (those without attorneys) fare in bankruptcy, where families go after they lose their homes to foreclosure, how bankruptcy affects couple's marriages, and the ways that bankrupt households differ in their financial straits from other households of concern such as those with low assets or late payments on debt. Of course I'm biased but I think the book provides the most comprehensive overview of the consumer bankruptcy system since the enactment of the 2005 bankruptcy amendments.
The best part about working on the Broke book was engaging in conversation and debate with this group of top-notch scholars, who bring different perspectives and disciplinary training (economics, housing, law, political science, psychology, and sociology) to the study of consumer debt. I hope you enjoy hearing more about Broke in the coming weeks, and on behalf of all authors, we welcome your comments and feedback.I would also like to take this occasion to again thank the Obermann Center for Advanced Studies at the University of Iowa for funding a gathering of scholars to work on the book chapters, and to thank the principal investigators of the 2007 Consumer Bankruptcy Project for allowing use of the data in the book (see Appendix of this paper for a full description of the Project and a list of principal investigators).
"Debates are not my strong suit."
That question comes to us from Byron York, but it’s probably being asked around many a breakfast table this morning among Republican households. Last night’s debate performance was another disappointment — not as bad as Rick Perry’s previous debate, but clearly inadequate in comparison to the others on the stage. If you don’t trust my [...]
"Debates are not my strong suit."
That question comes to us from Byron York, but it’s probably being asked around many a breakfast table this morning among Republican households. Last night’s debate performance was another disappointment — not as bad as Rick Perry’s previous debate, but clearly inadequate in comparison to the others on the stage. If you don’t trust my [...]
It looks like the Obama Administration is about to endorse some version of the Hubbard-Mayer plan of letting everyone (or at least everyone with an agency mortgage) refinance at today's low rates, regardless of whether they are delinquent or underwater. (Gotta love how the administration picks up a 3-year old Republican plan with obvious deficiencies and acts like it's fresh meat.) I fail to see how such a plan will accomplish much.
The ability to refinance depends heavily on whether a homeowner is current and has equity. Consider, then, the impact on the 4 categories of homeowners under this rubric:
(1) Borrowers who are current and have equity. Refinancing is always possibly for anyone who is current and has sufficient equity in their home. That's a lot of existing borrowers for whom a new refi program does nothing.
(2) Borrowers who are current but lack equity. There is also a large pool of borrowers who are current, but have insufficient equity or negative equity for a refinancing. A new refi program probably doesn't do much for them either. It doesn't take very much equity to do a FHA refinancing, but putting that aside, the Home Affordable Refinancing Program (HARP) allows for negative equity refinancings. There haven't been a lot of them, however, and I think that bodes poorly for any new program. The closing costs for refinancings can be a major obstacle for households without a lot of extra cash sitting around and with uncertainty as to whether they'll stay in an underwater house long enough for the lower rates to make the refinancing worthwhile.
(3) Borrowers who are delinquent, but have equity. These borrowers can already get out of the house via a sale. In any case, most of these borrowers are seriously delinquent, not just 1 or 2 months delinquent. Lower monthly mortgage payments aren't going to do a thing to change their delinquency or the pending foreclosure.
(4) Borrowers who are delinquent and lack equity. As with delinquent borrowers who have equity, most of these borrowers are seriously delinquent, not just 1 or 2 months delinquent. Lower monthly mortgage payments aren't going to do a thing to change their delinquency or the pending foreclosure.
So in the end, it's really not clear who this would help. It ignores that there's already been lots of refinancing at low rates since 2008--it's not clear how much more refinancing some new initiative will possibly produce, much less how many foreclosures it will prevent. The refi idea seems to do nothing on either negative equity or unemployment. Any program that fails to address those just isn't serious. I get that the administration has a MacGyver problem given that it can't move anything in Congress, but that necessitates much more creativity, financially and legally, not rewarming old ideas. My prediction: this ends up accomplishing about as much as FHAShortRefi or Hope4Homeowners.
We need a TARP for Main Street. This isn't it.
I recently heard that phrase and it motivated me to remind you that we are all leaders. Leaders teach those who notice them as examples or in their roles as rule-makers. In this foreclosure and economic crisis, we all have a pretty good sense of right and wrong. 20 million households have been robbed of their wealth, their lifestyle, and even their homes. Their children have gone through this looking to their parents to protect them from the ravages of greed and grief, stress and domestic unrest, and the feeling that they are hopelessly at the mercy of a cruel world.
I don’t know how all this will end up. But I know how I think it should end. This should end with people being restored, as much as humanly possible, to the position they were before these greedy schemes were hatched. AND our children should see that we stand up for our rights with a clear sense of right and wrong, and to fight with every ounce of our being to do the right thing and make the right things happen.
I believe the lesson for our children in all this is not the concept of win or lose because it doesn’t always work out that being right is enough. The lesson our children should learn is that we love them and we cherish them. It should be that that when THEY are parents in a sometimes cruel turn of events, they should fight for their rights and the protection of their families. The children should know that we can act powerfully even against enormous odds and that we can be trusted to do everything in our power to deliver on the inherent promises we made as parents to our children.In that process it will be revealed that we are far more empowered than we thought and we will emanate a spirit of achievement and accomplishment.
If the light of day is shown upon the misdeeds of others who acted out of selfishness and greed, and it becomes generally accepted that part of the plan was to use a confused court system that relied upon antiquated rules useless in the face of the modern era of financial “innovation,” then so much the better. If it doesn’t happen, or it doesn’t happen in the time period necessary to prevent disruption of our lives, our legacy of right and wrong, standing up to those who misuse their power intentionally or unintentionally will be sustained.
The only way you can make a difference is doing your part. Using any strategy that makes sense to you after consulting with your advisers, you should be taking steps to recover power and wealth stolen from you. Collectively, we will have gains and losses. In the end, we will have fought the right battle, paving the way for our children to act with certainty, conviction and honor.
What We Know (and Don’t Want to Know) About Housing Today, June 16, 2010, 34 minutes ago | noreply@blogger.com (Charles Hugh Smith) The housing market is doomed in the U.S., and the causal factors are all well-known. But we don’t want to know, because that knowledge would re-order the American culture and economy.
Yesterday I suggested that what we don’t want to know is as important as what we know/don’t know. We know housing values are artificially and unsustainably high, but we don’t want to know this.
About two-thirds of U.S. households own a house (75 million); 51 million have a mortgage and 24 million own homes free and clear (no mortgage). Most of the other 36 million households are moderate/low income and have limited or no access to credit and limited or no assets.
Who benefits from a housing market propped up by massive government subsidies? The homebuilders, lenders and real estate industries, of course, but the 75 million “stakeholders” in the housing market also want to believe the market is “fairly priced” and bound to recover its bubble-era heights.
Why? As I reported in Housing and the Collapse of Upward Mobility (April 16, 2010), the stupendous equity extraction of the bubble years left U.S. homeowners with little equity in their homes. The bursting of the housing bubble thus effectively destroyed most of the middle-class wealth held in housing:
If we look up all the gory details in theFed Flow of Funds, we find that household real estate fell from $23 trillion in 2006 to $16.5 trillion at the end of 2009. That is a decline of $6.5 trillion, more than half the total $11 trillion lost in the credit/housing bust.
Home mortgages have fallen a negligible amount, from $10.48 trillion in 2007 to $10.26 trillion at the end of 2009. As of the end of 2009, total equity in household real estate was a paltry $6.24 trillion of which about $5.25 trillion was held in free-and-clear homes (32% of all household real estate, i.e. 32% of $16.5 trillion).
That leaves about $1 trillion–a mere 1.85% of the nation’s total net
worth– of equity in the 51 million homes with mortgages.
The orgy of speculation, leverage and debt incentivized by the credit/housing bubble of 2000-2006 has, in the aftermath of the bubble’s bursting, destroyed most of the nation’s middle-class wealth.
In effect, three generations of accumulated equity was blown off in “wannabe wealthy” consumption and speculation.
That $6 trillion in wealth is gone. For many households, that was the majority of their wealth. Naturally, all of us who saw the value of our property skyrocket in the bubble years want those valuations (and all that equity/wealth) back.
But it is not to be, for fundamental, undeniable reasons.
1. There is a gargantuan oversupply of homes. U.S. vacant housing hits record 19 million:
The number of vacant housing units in the United States increased to a record
19 million in the first quarter of the year, up from 18.9 million in the fourth quarter. In the past year, the housing inventory rose by
1.14 million to 130.9 million, while occupied homes increased by 1.07 million to 111.9 million.
According to Census data, perhaps 4-5 million of these are truly second/vacation homes. We can estimate that several million other houses might be located in places no one wants to live any more, or they are no longer habitable. Deduct as many millions as you plausibly can, and you still have 10+ million vacant dwellings.
In the best-case scenario, it will take nine years to unload current inventory:
104 months to clear housing inventory, shadow inventory.
Basic supply and demand suggests that prices must fall as supply far exceeds demand.
Since Baby Boomers will be downsizing and defaulting for years to come, the supply of homes for sale could easily expand beyond today’s inventory.
2. The generations following the Baby Boomers are not numerous enough to provide demand for more housing. I reported the unyielding facts of demographics in Housing Headwinds and Baby Boom Demographics (April 13, 2010). As the baby Boom downsizes and defaults en masse, there aren’t enough potential buyers to soak up all the suburban homes and second homes that the Boomers will be selling.
3. The entire mortgage market has been socialized by the Federal government, which is poised to lose hundreds of billions of dollars propping up the housing market.
Wake-Up Time for a Dream:
As wards of the state, Fannie and Freddie are insuring three out of every four mortgages. Most of the remaining 25 percent are being guaranteed by the F.H.A. As much as you might resent the fact that the taxpayers now have to pick up behind new Fannie and Freddie, the sad truth is that without them, no one in America would be able to buy a home.
Literally 99% of the mortgages are government-backed: With a big boost from the Feds, investors again like securities backed by assets:
(In 2009), government-backed loans have accounted for 99%, or $1.5 trillion, of mortgage securities. Banks and other private firms have issued a mere $15 billion. In addition, the Federal Reserve and Treasury have spent nearly $1.25 trillion buying those bonds to support the housing and broader credit markets. “The government is literally plowing trillions of dollars into the U.S. mortgage market to keep it afloat,” says Guy D. Cecala, publisher of Inside Mortgage Finance.
Meanwhile, the costs of this unprecedented subsidy of housing may cost
$1 trillion in losses on Fannie and Freddie alone.
4. The Roots of the Housing Bubble Remain Unchanged: moral hazard, unregulated risk, extreme leverage, fraud, you name it–nothing’s changed.
5. Defaults and foreclosures will dump millions more homes on the market.
The default rate on low-down-payment FHA loans is a staggering 20% on loans written in 2008–after the housing bust had already unfolded and the risk was undeniable: F.H.A. Problems Raising Concern of Policy
Makers:
F.H.A. commissioner, David H. Stevens, acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure.
The problem with that willingness to absorb risk for the sake of incentivizing borrowing for home ownership is that next year another 20% will default, and then the following year another 20% will default, and by year Five the vast majority of those loans backed by FHA will be in default.
FHA Facing “Cataclysmic” Default Rates:
The Federal Housing Administration (FHA) has guaranteed about 25% of all new U.S. mortgages written in 2009, up from just 2% in 2005.
6. Mortgage re-sets will trigger additional defaults. The chart says it all:
Not knowing and/or not believing will not change the negative dynamics of the housing market.
YOU DON’T NEED TO BE DELINQUENT TO SETTLE OR MODIFY. It might just be a good time to pick up the phone right now and call the servicer, trustee, or whoever is saying they have your loan (even though they don’t) and make a deal. Think about it first. Don’t be too generous to them and don’t be to greedy for yourself. It’s true they don’t serve the home or the new mortgage, but if you can get the terms you need, and you get a court order confirming it, it won’t matter that the investors got ripped off in the deal. That’s not your problem.
Editor’s Note: Now that the plan is more fully described, hold the presses. It would seem that Obama got our message. This plan addresses all homeowners with securitized mortgages that were over appraised, and aims to keep them in their homes to avoid the obviously needless and lawless displacement that has been the rule up till now.But don’t get lulled into complacency. The Banks are no more able or willing to give you that modification than they were before, with the possible exception of BofA. You still need legal weapons and ammunition, you most likely still need a lawyer, and you still need to get title quieted through a court order. It’s all possible if the settlement or “modification” agreement provides the right terms.
Will it work this time?
Once again, the federal government is adding to its arsenal of programs for troubled homeowners, seeking to help those who urgently need it while neither angering nor creating perverse incentives for those who do not.
The new measures, announced by financial policy makers at the White House on Friday, are among the boldest to date. They are aimed not only at the seven million households that are behind on their mortgages but, in a significant expansion of aid that proved immediately controversial, the 11 million that simply owe more on their homes than they are worth.
Some of these people, if the government plan works, will emerge with a house whose payments they can afford and whose new mortgage reflects its market value. Unlike many previous modification recipients, they would presumably be less likely to re-default, helping to stabilize a housing market that remains queasy.
“We’re walking that delicate balance to make sure these solutions are sustainable and not temporary,” said David H. Stevens, commissioner of the Federal Housing Administration.
It is a balancing act in numerous ways. If the plan falls short — and some experts were skeptical on Friday — the Obama administration could find itself having to start over yet again in six months or a year.
“The housing market is the Vietnam War of the American financial system,” said Howard Glaser, a housing consultant. “The federal government is in so deep, they have to keep ramping up to find a way out.”
The latest programs, together with foreclosure assistance efforts already in place, are aimed at helping as many as four million embattled owners keep their houses. But the measures, which will take as long as six months to put into practice, might easily fall victim to some of the conflicting interests that have bedeviled efforts to date. None of these programs have the force of law, and lenders have often seen no good reason to participate.
To lubricate its efforts, the government plans to spread taxpayers’ money around liberally. For instance, it had previously planned to give homeowners that sell their homes rather than let them go into foreclosure a “relocation assistance” payment of $1,500. The plan announced on Friday increases that amount to $3,000.
All told, the new measures are expected to cost about $50 billion. The White House was careful to stress that the money will come from funds already set aside for housing programs in the Troubled Asset Relief Program. There will be “no additional commitment of taxpayer dollars,” Michael S. Barr, an assistant secretary of the Treasury, said at the White House briefing.
Here is what the $50 billion is supposed to buy:
The simplest component of the plan involves assistance to unemployed homeowners. Mortgage companies will now be encouraged to reduce payments for at least three months and possibly six months while the homeowner pursues a new job.
To be eligible, borrowers must submit proof they are receiving unemployment insurance. The new payments will be 31 percent or less of their monthly income. The missing money will be tacked onto the loan’s principal.
A second and more complicated program is a requirement that mortgage servicers consider writing off a portion of a borrower’s loan to get it down to a more manageable level.
Borrowers in the government modification plan who owe more than 115 percent of the value of their home and are paying more than 31 percent of their monthly income toward the mortgage are eligible. The write-downs are to take three years, with the borrowers in essence being rewarded for making their payments on time.
The third major new program strays the farthest from the government’s previous approach. Borrowers who owe more on their homes than they are worth will get a chance to cut their debt — providing the investor or bank who owns the loan agrees.
Mr. Stevens of the F.H.A. said the program was “for responsible homeowners who through no fault of their own find themselves in a situation of negative equity.”
There is no official requirement that these homeowners be in distress, but it would probably make the investor more receptive to a deal. Whether homeowners will scheme to get into the program is one of the big uncertainties.
The investors will write down the loans to 97.75 percent of the appraised value of the property, at which point the F.H.A. will refinance them through new lenders. The F.H.A., which currently insures about six million homes, will insure the new loans as well.
If the homeowner has a second mortgage, as many do, the total value of the new mortgage can be as much as 115 percent of the value of the property. The F.H.A. will spend up to $14 billion to provide incentives to the banks that service the primary loan as well as the owners of the secondary loans. Some of the money will also provide additional insurance on the new loans.
Numerous parties will have to work together to make these deals fly. The primary loan might have been bundled into a pool and sold to investors during the housing boom. The investor must agree to cut the principal balance for a deal to work, and any bank holding a second mortgage on the property would have to go along, too.
The only incentive for the first lien holder is a quick exit from a loan that might ultimately default. Payments for second lien holders will be made on a sliding scale.
Early reaction to the refinance program among lending groups was less than enthusiastic.
“The magnitude of this program will likely be measured in the tens of thousands rather than the hundreds of thousands of borrowers,” said Tom Deutsch, executive director of the American Securitization Forum. Both banks and investors belong to the forum.
The Mortgage Bankers Association, which represents the banks that service the primary loans and own outright many of the secondary loans, warned that “each servicer will need to determine whether this is the best approach to help the individual borrower.”
The new proposals irked many people, who flooded online forums Friday. Some said those in trouble deserved their fate. Others asked why the government was propping up housing prices when many renters still could not afford to buy a house. And some wondered about the message these rescue plans were sending to those who resisted the housing bubble.
Dave Juliette, a software worker in Pittsburgh, is in the last group. He paid off his loan eight years ahead of schedule and now owns his house free and clear. “I’m a homeowner in a more genuine sense of the word than many of these people with mortgages,” Mr. Juliette said. “But I won’t be seeing a dime.”
The Obama administration on Friday will announce broad new initiatives to help troubled homeowners, potentially refinancing several million of them into fresh government-backed mortgages with lower payments.
Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.
The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.
The administration’s earlier efforts to stem foreclosures have largely been directed at borrowers who were experiencing financial hardship. But the biggest new initiative, which is also likely to be the most controversial, will involve the government, through the Federal Housing Administration, refinancing loans for borrowers who simply owe more than their houses are worth.
About 11 million households, or a fifth of those with mortgages, are in this position, known as being underwater. Some of these borrowers refinanced their houses during the boom and took cash out, leaving them vulnerable when prices declined. Others simply had the misfortune to buy at the peak.
Many of these loans have been bundled together and sold to investors. Under the new program, the investors would have to swallow losses, but would probably be assured of getting more in the long run than if the borrowers went into foreclosure. The F.H.A. would insure the new loans against the risk of default. The borrower would once again have a reason to make payments instead of walking away from a property.
Many details of the administration’s plan remained unclear Thursday night, including the precise scope of the new program and the number of homeowners who might be likely to qualify.
One administration official cautioned that the investors might not be willing to volunteer any loans from borrowers that seemed solvent. That could set up a battle between borrowers and investors.
This much was clear, however: the plan, if successful, could put taxpayers at increased risk. If many additional borrowers move into F.H.A. loans, a renewed downturn in the housing market could send that government agency into the red.
The F.H.A. has already expanded its mortgage-guarantee program substantially in the last three years as the housing crisis deepened. It now insures more than six million borrowers, many of whom made minimal down payments and are now underwater.
Sources said the agency would use $14 billion in funds from the Troubled Asset Relief Program, some of which it could dangle in front of financial institutions as incentives to participate.
Another major element of the program, according to several people who described it, will be to encourage lenders to write down the value of loans for borrowers in modification programs. Until now, the government’s modification efforts have focused on lowering interest rates.
Lenders began offering principal forgiveness last year on loans they held in their own portfolios. In the fourth quarter, however, this process abruptly reversed itself, for reasons that are unclear. The number of modifications that included principal reduction fell by half.
Bank of America, the country’s biggest bank, announced this week that it would forgive principal balances over a period of years on an initial 45,000 troubled loans.
Another element of the White House’s housing program will require lenders to offer unemployed borrowers a reduction in their payments for a minimum of three months.
An administration official declined to speak on the record about the new programs but said they would “better assist responsible homeowners who have been affected by the economic crisis through no fault of their own.”
The new initiatives would expand the government’s current mortgage modification plan, announced a year ago with great fanfare. It has resulted in fewer than 200,000 people getting permanent new loans. As many as seven million borrowers are seriously delinquent on their loans and at risk of foreclosure.
Editor’s Note: It seems to me that this concedes the battle to Wall Street. It encourages homeowners to take the loss that at the very least should be shared with ALL the players in the securitization scheme and creates more problems in housing and social services.
Excerpt from NYT – do not buy into this -
Program Will Pay Homeowners to Sell at a Loss
By DAVID STREITFELD
Published: March 7, 2010
“In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years.
A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year.
Foreclosure – Arts – Math – New Year – Recreations
A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year.
Foreclosure – Arts – Math – New Year – Recreations
The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the foreclosure crisis continued to outpace government efforts to limit the damage.
Here’s a link to my similar article at EZinesArticles.com: http://ezinearticles.com/?Mortgage-Hardship—Solutions-to-Avoid-Foreclosure&id=2710389
If you are facing a hardship with making your mortgage payments, you’re not alone. The national foreclosure rate is now at one in every 555 households. If you live in the Ft. Myers/Cape Coral area, that statistic jumps to 1 in every 18 households now in foreclosure.
A mortgage hardship is very common with unemployment numbers rising daily and US homeowners losing the values in their homes on a monthly basis as well
When someone loses their income they go through all sorts of emotions when they cease to have the ability to pay their bills. Fear can easily be all-consuming when facing a mortgage hardship and foreclosure.
The first thing I tell my clients is to not be afraid. Fear can take a root in our lives and cripple us from taking action and acting wisely.
Don’t cave in to the fear tactics of your mortgage servicer or lender – or any other creditor for that matter. You’re still in control even though you may not feel like it.
There are precise steps you can take to protect yourself and your interests. There are legal rights that you possess and can use to help yourself in difficult times. The biggest challenge is that most American consumers and homeowners don’t know they have legal rights. You have foreclosure rights…when you’re facing a mortgage hardship, all hope is not lost.
We have helped families stay in their home for an extra 6 months, 8 months and over a year. We never provide a precise time frame or outcome. There are so many variables… if you have a company giving you a bunch of promises and charging a lot of money upfront for now finite service, be extremely wary and cautious.
Another very likely issue is that the financial institution attempting to collect and/or foreclose doesn’t even own your loan or have the legal right to collect. Over 80% of all foreclosures filed in Florida right now contain a “Lost Note” count alleging that they (the plaintiff) have lost the most important document as evidence of the debt they claim you owe – the Note
There are several affirmative defenses that a qualified and competent foreclosure attorney will know how to bring in your case.
A TILA mortgage rescission may be something that you can assert if there are material disclosure violations found in a forensic loan audit of your loan documents. Obtaining a true forensic loan audit is probably the best first step you as a homeowner in mortgage hardship can take.
A forensic loan auditor will truly break down the entire package of loan documents and examine them for state and federal loan violations along with a forensic examination for fraud and failure to disclose, appraisal fraud and loan application and underwriting fraud.
Be certain that you are truly dealing with a reputable and knowledgeable auditor. I find that a very select few of us really know what to look for and truly know the laws. So many people will tell you what you want to hear without preserving integrity and honesty.
There is a litany of scams out there so be careful. Take your time, ask questions, find a professional who will help and educate you. Knowledge is truly power. The more you know and understand your foreclosure rights, the better off you’ll be.
Quantified violations of the Truth in Lending Act (TILA) and other federal violations can be used a Claims in Defense by Recoupment in any foreclosure action brought against you. A forensic loan audit (done right) is highly valuable for you.
You’ll land on your feet. You’ll make it through this tough time. Be a sponge for information, read it with common sense in mind and find a person or two who can be your mentor or advisor through this time. You’ll make it… I promise.
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