Monday, June 21, 2010
Monday, June 07, 2010
Mortgage Borrowers receive $108 million from Bank of America
According to the Associated Press, Bank of America has settled federal charges that Countrywide Financial Corp. (which it acquired about 2 years ago), collected excessive fees from about 200,000 borrowers in foreclosures. Now those borrowers will get a huge refund, which is very much deserved. The fees at issue were charged against borrowers who were behind on their mortgage (who obviously couldn’t afford the charges without these nasty fees) and they were substantial fees of thousands of dollars. Moreover, Countrywide misstated the fees to borrowers and misrepresented the amount borrowers owed.
Lieb at Law always recommends that borrowers in foreclosure closely examine their statements and we routinely order Reinstatement Packages to determine how much the bank is charging. It is our position that if borrowers & their representatives do not stand up for themselves they will face abuse. Here is an example of big banking abusing the little guy yet again. Hopefully, lenders will learn the tail of Countrywide and will choose to work with a struggling homeowner rather than charge them more once they are already behind. Otherwise, lenders will keep facing lawsuits. Keep your eyes open & if you believe your lender is maintaining abusive practices contact an attorney immediately.
Lieb at Law always recommends that borrowers in foreclosure closely examine their statements and we routinely order Reinstatement Packages to determine how much the bank is charging. It is our position that if borrowers & their representatives do not stand up for themselves they will face abuse. Here is an example of big banking abusing the little guy yet again. Hopefully, lenders will learn the tail of Countrywide and will choose to work with a struggling homeowner rather than charge them more once they are already behind. Otherwise, lenders will keep facing lawsuits. Keep your eyes open & if you believe your lender is maintaining abusive practices contact an attorney immediately.
Thursday, June 03, 2010
Short Sale after Bankruptcy
What is the advantage of doing a Short Sale after a Bankruptcy?
It’s true that the Bankruptcy (Ch 7) will already hurt a borrower's credit score to a significant degree and that a Discharge in the Bankruptcy will prevent the lender from seeking a deficiency from the borrower (how much is owed more than how much the home sells for in foreclosure), which are the 2 main advantages of a Short Sale (less credit impact and also avoiding a deficiency). Yet, the advantage of a Short Sale after a Bankruptcy is that on a future Uniform Residential Loan Application, Fannie Mae Form 1003 (when seeking a mortgage for a future home), there are 2 "Yes No" questions that state as follows (and require additional details for a Yes answer):
"c. Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?"
"e. Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment?"
Therefore, a Short Sale can avoid being Red Flagged pursuant to either of these questions and it can avoid the hassle of attempting to get a future loan. Please note that there is also a question about Bankruptcy in the last 7 years (question “b.”), but question “e.” above survives for the lifetime of the applicant. Therefore, Bankruptcy will only be an issue on applications for 7 years, while a foreclosure is an issue forever.
It’s true that the Bankruptcy (Ch 7) will already hurt a borrower's credit score to a significant degree and that a Discharge in the Bankruptcy will prevent the lender from seeking a deficiency from the borrower (how much is owed more than how much the home sells for in foreclosure), which are the 2 main advantages of a Short Sale (less credit impact and also avoiding a deficiency). Yet, the advantage of a Short Sale after a Bankruptcy is that on a future Uniform Residential Loan Application, Fannie Mae Form 1003 (when seeking a mortgage for a future home), there are 2 "Yes No" questions that state as follows (and require additional details for a Yes answer):
"c. Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?"
"e. Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment?"
Therefore, a Short Sale can avoid being Red Flagged pursuant to either of these questions and it can avoid the hassle of attempting to get a future loan. Please note that there is also a question about Bankruptcy in the last 7 years (question “b.”), but question “e.” above survives for the lifetime of the applicant. Therefore, Bankruptcy will only be an issue on applications for 7 years, while a foreclosure is an issue forever.
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