Customer-Transition-Guide_Bank-of-America.pdf

Home Transition Guide
What you will find inside

Section 1 of this guide was designed by Bank of America and provides information about options to avoid foreclosure using a short sale or deed in lieu of foreclosure. You will still need to leave your house, but these programs can give you more control over the way you do it.

Section 2 contains community resources provided by United Way and other organizations to help you navigate the process of transitioning out of your current house, including information, referrals and budget tips.

Section 3 contains an Action Sheet of the steps you need to follow to complete a sale, short sale or deed in lieu, and leave your house.

Section 4 contains additional resources that may be helpful to you, as well as an index of all the resources mentioned in the first three sections. You will also find a glossary of terms and a budget worksheet referred to later in this guide.
Customer-Transition-Guide_Bank-of-America.pdf

30% of FHA mortgage modifications redefault within a year

30% of FHA mortgage modifications redefault within a year

Posted By JON PRIOR On November 18, 2011

More than 30% of the nearly 282,000 modifications completed on Federal Housing Administration mortgages in 2010 redefaulted within a year, according to an independent study sent to Congress this week.
It's not great news, but it is down from last year's statistics.

Modifications made in 2009 remain the worst performing since the financial crisis struck in 2007. Nearly 39% of the 180,700 FHA modifications completed that year redefaulted within 12 months.
FHA loans do not go through the wider Home Affordable Modification Program, but have their own FHA-HAMP option, which combines principal deferment, among others.

The FHA put in new tools in 2011 including longer forbearance timelines for unemployed borrowers.
Public programs, while they reach fewer borrowers than the private ones, have consistently performed better. The Office of the Comptroller of the Currency reported in October that 34% of the 129,000 permanent mods completed in the first quarter of 2010 redefaulted within one year ^[1], compared to 19.4% of the 100,200 HAMP workouts completed in the same period.

Still, public programs are funded through taxpayer dollars. The Treasury Department has obligated $29 billion through HAMP.

Foreclosure starts on FHA-insured mortgages dropped to less than 10,000 in September 2011 from nearly 28,000 at the peak in March 2010. But that has been due to the continued robo-signing freeze servicers put on in October 2010 to fix faulty affidavits and other practices. "That, in turn, produced a decrease in claim payments during FY 2011," according to the report. "The final resolution of these open cases is still unknown."

Ron D'Vari, CEO of the financial advisory firm NewOak Capital in New York, said housing cures will come by adding more jobs. "The ultimate cure will come with fixing the job market which most effects those less prepared to deal with a sustained unemployment.
," D'Vari said. "In many cases these borrowers are better off with renting and having a more flexible arrangement so they can migrate to where jobs are."

5 Scams Making Suckers Out Of Homeowners

BofA: Alternatives To Foreclosure Chart

The Chart from Bank of America's Home Transition Guide below provides an overview of selling your house, a short sale, a deed in lieu and  a foreclosure by comparing their different features.

CDPE: Interview with Bob Hora, Bank of America VP of Mortage Servicing

Special Broadcast Interview with Bank of America  Bob Hora, Senior Vice President of Mortgage Servicing at Bank of America Home Loans with Alex Charfen, founder of CDPE (Certified Distressed Property Expert) Institute.

This special interview is heralded as the important step as the nation's largest loan servicer continue the process to stem the  tide of homes going into foreclosure.  Mr. Bob Hora introduces about the changes forthcoming to assist homeowners to make informed decisions about available options.  He emphasizes the need to work with trained agents like CDPEs who are familiar with the process.

This will be available for limited time so please take a look. The link to the special interview is below.

BoA-Broadcast-Bob-Hora

Study: African Americans & Latinos Twice as Susceptible to Foreclosure as Whites

Study: African Americans & Latinos Twice as Susceptible to Foreclosure as Whites

California Underwater Mortgage Map

DS NEWS :Past Due Mortgages = 6,298,000

Past Due Mortgages = 6,298,000
by Carrie Bay  DSNEWS.COM

There were 6,298,000 mortgages going unpaid in the United States as of the end of October, according to Lender Processing Services (LPS).

It’s a daunting number, but the data show that it’s actually been on a fairly steady decline for nearly two years now. At the start of 2011, the total number of non-current mortgages in the U.S. stood at 6,870,000. In January 2010, it was 8,118,000.

LPS’ more recent reports show the industry is slowly but surely chipping away at the number each and every
month – the result of both loss mitigation workouts and removing loans that cannot be resolved from the inventory through foreclosure.

At September month-end, the tally of non-current mortgages was 6,373,000. It was 6,397,000 at the end of August and 6,538,000 at the end of July.

LPS’ data indicates mortgage delinquencies are declining while the nation’s foreclosure inventory is growing.
Of the 6,298,000 loans past due at the end of October, 2,329,000 were behind on their payments by 30-89 days and 1,759,000 were 90 or more days delinquent but not yet referred to foreclosure.

Combined, these tallies represent 7.93 percent of the nation’s outstanding mortgages that are delinquent but not in foreclosure. The October delinquency rate is down 2.0 percent from the previous month and is 14.6 percent lower than the rate recorded in October 2010.

The foreclosure inventory rate, on the other hand, is up by both measures. LPS says 4.29 percent of the nation’s mortgages are winding their way through the foreclosure process, a month-over-month increase of 2.5 percent and a year-over-year increase of 9.4 percent.

By LPS’ calculations, there were 2,210,000 residential mortgage loans in foreclosure at October month-end.
States with highest percentage of non-current loans – which combines foreclosures and delinquencies – include: Florida, Mississippi, Nevada, New Jersey, and Illinois.
Montana, Wyoming, South Dakota, Alaska, and North Dakota have the lowest percentage of non-current loans.

Foreclosure Vs. Short sale Homeowner Consequences

I have been asked by many homwoners about the consequences of doing a  short sale versus going through the foreclosure.  I had posted the below table back in September but after more than 50 postings later, it is buried. So, I have decided to repost so that interested  parties could learn about the differences.

Like in my previous postings, I would like to reiterate that I am not a lawyer and can't give any legal advices and the information presented is sorely for educational purposes and comes from my training material as Certified Distressed Property Expert (CDPE) Institute which certified my completeness of their training.

GSEs release guidance on HARP changes

GSEs release guidance on HARP changes

by JON PRIOR

Tuesday, November 15th, 2011, 5:05 pm

 

Fannie Mae and Freddie Mac released specific guidance Tuesday on how mortgage servicers and lenders will be implementing changes to the Home Affordable Refinance Program to help more underwater borrowers move into lower-rate loans.

In October, the Obama administration and the Federal Housing Finance Agency said the mortgage giants would lift the loan-to-value ratio cap, along with certain appraisal requirements, upfront loan-level price adjustment fees, and representation and warranties risk for participating lenders.
The program will be extended through Dec. 31, 2013.

For loans refinanced by the original servicer and currently hold an LTV above 80%, Fannie and Freddie waived the bank from representation and warranty liability for the original purchase mortgage documents, according to guidance sent to servicers Tuesday.

This means if the original documents on the loan were either fraudulent or missing before being sold to Fannie or Freddie the bank wouldn't have to buy back the mortgage.
"The lender is not responsible for any of the representations and warranties associated with the original loan," Fannie explicitly said in its guidance.

The servicer will also be relieved of rep and warranty liability on the new HARP refinanced loan if the data in the case file is complete, and the lender follows instructions gathering income, employment and asset documentation.

The GSEs will also clear banks from rep and warranty risk on the valuation, marketability or condition of the underlying property – unless the lender obtains an appraisal for the new HARP refinance.
However, the bank is still on the hook for any possible fraud it participates in or fails to detect.

There's a caveat. If the borrower goes to a new lender to refinance the loan under the new HARP rules, the rep and warranty risk on the essentially new loan transfers to the new lender, according to guidance from Freddie.

Fannie and Freddie will permit a borrower to have been delinquent on one mortgage payment in the previous 12 months as long as the delinquency didn't occur within the last six months.
Banks are allowed to solicit and advertise the changes to potential borrowers so long as they do so for both GSEs and for loans bundled into Fannie or Freddie MBS pools the bank is invested in.

HARP launched in March 2009. Roughly 838,000 Fannie Mae and Freddie Mac mortgages refinanced through the program since, but 58,000 had loan-to-value ratios above 105%.
Roughly 4 million Fannie and Freddie borrowers owe more on their mortgage than their home is worth.

Across all investor types, however, nearly 11 million are underwater in the U.S., roughly 22.5% of all outstanding loans, according to CoreLogic (CLGX: 13.55 0.00%). Another 2.4 million hold less than 5% equity in their homes.Royal Bank of Scotland analysts expect most of the loans impacted by the changes will have origination dates between 2006 and 2008.

While the largest lenders and servicers have committed to the new program, not everyone is participating.
United Guaranty, the mortgage insurance arm of American International Group (AIG: 23.12 0.00%), said many lenders will be using the revamped HARP to avoid representation and warranty claims on loans with fraudulent or missing paperwork. United said Tuesday while it supported the program, it was not going to waive its right to void policies in these instances.

SAC. BEE Editorial:A lifeline for homeowners, but not enough

Editorial: A lifeline for homeowners, but not enough

Published Wednesday, Oct. 26, 2011

The nation and California in particular are drowning in a home foreclosure crisis that is dragging down the rest of the economy. President Barack Obama's newest plan to help those stuck in "underwater" mortgages – owing more on their homes than they are worth – is a recognition of that painful fact.

But it won't be enough to solve the housing crisis, as he himself admitted in unveiling the plan Monday in Nevada, another state that took it on the chin when the housing bubble burst.

The best guess is that the plan will aid somewhere around 1 million homeowners by allowing them to refinance their mortgages at current historically low rates. But there are more than 10 million homeowners nationwide, 2 million in California, who are underwater.

The plan loosens rules and restrictions in Obama's 2009 Home Affordable Refinance Program that has helped far fewer people than designed. It will depend on the details, such as the upfront costs for refinancing that could eat up much of the savings, how many homeowners will sign up this time.

It's as much an economic stimulus strategy as housing relief. The lower monthly payments are supposed to free up cash that homeowners can spend elsewhere in the economy, but their mortgages will still be underwater.

As the president often does (too often for the liking of many of his allies), he has chosen the path of less political resistance. Going into his reelection campaign, it would be much riskier to champion more sweeping solutions that some are endorsing.

Economists on the left and right are calling on the nation's big banks to write down the value of underwater mortgages to market values, accepting losses but allowing people to stay in their homes. Some propose using taxpayer money to encourage banks to reduce the principal on underwater loans. Obama would have to expend quite a bit of political capital to either bully banks into write-downs or to get a requirement through Congress.

With all these attempts to ease the housing crisis, there's good reason to be skeptical because high-profile pronouncements have not been matched with actual performance.
Speaking of which (and closer to home), the state Housing Finance Agency needs to get a move on with the Keep Your Home California program. Its launch was delayed and the eligibility guidelines were quickly expanded. Even so, since starting in February, only about 7,000 low- and moderate-income homeowners have received about $128 million in benefits, including cash assistance for those who have lost their jobs or are in financial distress.

That 7,000 is only a small fraction of those in need and hasn't kept pace with foreclosures. As The Bee's Rick Daysog reported on Monday, some consumer advocates are very concerned that the state won't make a 2017 deadline to use $2 billion in federal stimulus funding for the program. Any leftover money will go back to the feds.

Agency leaders say they're confident as more banks sign on to the program – the nation's biggest, Bank of America just did in August – that the pace will pick up rapidly.
It better and soon, or they'll have quite a bit of explaining to do.
Usually, it's the lack of money that's the big hurdle. That's not the case here. It would be a travesty if red tape or bad management gets in the way of helping Californians stay in their homes.

© Copyright The Sacramento Bee. All rights reserved.

TIMES: After Walking Away from Mortgages-No Regrets

Time Magazine reports on a study that indicates 35 % of mortgage defaults were strategic as of last September compared to jut 26 % of mortgage defaults in March 2009. While the ethical debate as to the strategic default is still going on, many believe that this trend of walking away will raise the overall number of foreclosures and bring unwanted consequences.  Please read the article below:

TIMES: After Walking Away from Mortgages-No Regrets

California Expands Mortgage Help to those with 2nd Homes. Good News !

By Jon Prior, Housingwire Nov 10, 2011


California expanded its $2 billion program to help homeowners avoid foreclosure to those with second homes as well.

The California Housing Finance Agency established the four Keep Your Home programs using money from the Treasury Department's $7.6 billion Hardest Hit Fund. Before, borrowers were restricted from modifications, unemployment funds, relocation assistance and even principal reductions if they had a second home.

Officials eliminated the exclusion, because they said many homeowners are co-signers on a second home or are underwater on their first property.

Other changes to the programs include allowing borrowers to take advantage of principal reduction offers even if they completed a cash-out refinance in the past, which many Californians did during the boom.

CalHFA also increased the amount of unemployment assistance qualified borrowers would receive and how long they could get it. Out-of-work homeowners can receive up to $3,000 in mortgage and tax assistance per month for up to nine months, an increase from six months before the change.

Borrowers can also get $20,000 through a reinstatement program to use for past-due mortgage payments, up from $15,000.

"This expanded eligibility will allow more families to qualify and receive greater assistance," said Claudia Cappio, Executive Director of the California Housing Finance Agency.

In order to qualify for these programs, the borrower's servicer must participate. CalHFA said nearly 50 mortgage servicers now participate in at least one of the four. But only 11 servicers participate in the principal reduction program that requires the bank to match each dollar the agency removes from the loan.
While Bank of America (BAC ^[1]: 6.21 +2.99%) joined ^[2] the California principal reduction program in July, Fannie Mae and Freddie Mac loans are still excluded.
The California Attorney General Kamala Harris recently called on ^[3] both companies to provide principal reduction to her constituents.

Who are The Winners and Losers in HARP 2.0 ?

CoreLogic Identifies HARP 2.0 'Winners and Losers'

10/31/2011 By: Carrie Bay

Administration officials unveiled a highly anticipated program last week aimed at allowing borrowers who owe significantly more than their home is worth take out new loans with lower interest rates.

The initiative has taken the form of a newly revamped Home Affordable Refinance Program (HARP), which has been opened up to any borrower whose loan was sold to Fannie Mae or Freddie Mac prior to April 2009, as long as they are current on their payments and no matter how far underwater they are.

Mark Fleming, chief economist for CoreLogic says the impact of HARP 2.0 will be targeted to the housing markets and local economies that have suffered the most from the housing collapse.
Nationally, based on CoreLogic’s quarterly analysis, there are more than 20 million borrowers who have insufficient or negative equity positions on their homes, taking into account all outstanding liens. The company says 4.7 million of these households are underwater by 25 percent or more.

Nevada and Florida rank 1st and 3rd for the highest levels of negative equity (60 percent and 45 percent, respectively) and account for 2.3 million – or 21 percent – of the underwater mortgages nationally.
In those same two states, the share of loans that are current in the GSE portfolio is significantly lower than in the overall GSE portfolio, Fleming explained. Florida and Nevada loans held by the GSEs are current at rates of 85 and 87 percent, respectively, compared to 93 percent of loans that are current when looking at the full GSE portfolio.

“It’s not surprising that where insufficient and negative equity is concentrated is also where delinquency levels are higher,” Fleming said. “Therefore, the HARP 2.0 requirement that the borrower must be current reduces eligibility in many of the areas where negative equity presents the biggest impediment to refinancing.”
Fleming says it’s certain that many more borrowers will benefit from HARP 2.0 than would have prior to the new program revisions. But he says it will not be a panacea for the housing market directly, because it doesn’t address the two biggest downdrafts for housing: distressed borrowers and shadow inventory.

Moving beyond the borrowers themselves, Fleming cites several other ‘winners’ and ‘losers’ under the new refi effort.

He says HARP 2.0 will be positive for the GSEs themselves because it reduces default risk by reducing the mortgage payment and improving the household balance sheet.
The origination market is another winner in the program’s refi push. Fleming estimates that HARP 2.0 will lead to an increase of somewhere around 2 million additional transactions, starting in 2012 and going into 2013. With an average loan amount of $175,000, this equates to $350 billion over two years, although Fleming believes it will be frontloaded in 2012.

If as many as 2 million borrowers refinance and reduce their mortgage payments, HARP 2.0 constitutes a significant economic stimulus on the order of several billion dollars given to borrowers in many of the economically hardest hit areas, according to Fleming. “[T]his represents an effective tax cut on the order of a few billion dollars,” he said.

Bondholders of high coupon GSE mortgage-backed securities (MBS) fall on the losing side of this plan. Fleming says investors will see prepayment speeds increase significantly. They’ll receive their capital back sooner and will have fewer options for investing it at similar rates, he explains.
For the housing market itself, the impact will likely be “neutral,” Fleming says. He explains that refinancing will not significantly reduce the level of negative equity and will be unlikely to effectively reduce strategic default since the program only offers the potential of lower payments but doesn’t reduce principal.
In addition, Fleming stresses that because borrowers need to be current on existing loans, HARP 2.0 will not reduce the level of the shadow inventory, which, by definition, is composed of seriously delinquent loans and REO held off the market.

Fleming says there is little direct and immediate benefit to the impacted housing markets in the near term or to the borrowers who are already delinquent. Instead, he says, benefits of HARP 2.0 will be longer term in the form of reduced, new distressed assets.
“There are no silver bullets that will solve the issues facing the housing and mortgage markets, only solutions that play their small part,” Fleming said. “In the end, the best solution will be a stronger economy and the passing of time.”