Eliminate 2nd and 3rd mortgage, reduce principal

Many homeowners are pounding their heads against a wall trying to get lenders to work to get them current or give them some form of loan modification. Many of these homeowners have been taking out of credit cards, personal loans, or other sources just to survive. However, many lenders look at large amounts of other debt negatively when considering your total debt to income ratio in a modification. These homeowners don't realize that a loan modification is not going to suddenly save them from the brink.

Often times a bankruptcy filing is a better option. It can eliminate the other credit card debts, personal loans, 2nd mortgages, and 3rd mortgages. It all depends upon the type of filing under what chapter of the Bankruptcy Code, but it is even possible to force principal reduction in some cases. Although there have been attempts at federal legislation over the last year to allow bankruptcy judges to force modification of terms of mortgages on principal residences, they are always defeated. There are ways to eliminate 2nd mortgages even on principal residences in some cases.

Homeowners needs to look at all their options and not delaying because your lender will move a foreclosure forward no matter how seemingly nice them seem on the phone.

For more information, contact us or view our website.
888-881-6591
http://www.bankruptcylawyerla.net/BankruptcyServices.htm

Forensic Loan Audit - scam or useful modification service?

Even before the passage of SB94, real estate agents, consultants, and lawyers were offering to perform a forensic loan audit. Since SB94 went into effect, there are many companies and law firms doing this service to avoid the advance fee provisions of this new law. It seems to me that the majority of these are people who are desperate since they can't charge large up front fees to do loan modifications. It is hard to determine based upon the way they structure these services whether they violate SB 94, but there are things a consumer needs to know before paying any up front fees.

Forensic loan audits are where someone reviews the documents that were used to originate your loan(s). Under state and federal lending, banking, credit, and consumer protection laws, there are required disclosures that have to be provided and certain limits on fees and other things that happen during the loan process.

Someone who does a loan audit will often tell the consumer that if they find Truth In Lending Act (TILA) violations or Real Estate Settlement Procedures Act (RESPA) violations, that your lender will suddenly just change their tune and give you a loan modification. That is far from the case. While these violations can technically be legal claims, your lender will usually not even pay attention to them until a lawsuit is filed in court. Even then, it does not mean that they will just try to settle by giving you a modification.

There is a time and place for a review of the loan docs, but just finding violations is not a real service. Anyone who is not a licensed attorney may not realize that there are complex issues involved with lender litigation. Many banks are protected under federal laws such as the national banking act and the only claims that can be brought against them are with a regulatory agency, not a basic lawsuit. Lawsuits are often dismissed on this basis. Also, there are time limits within which you must bring your claims against the lender, many of which are within one year of the original loan date. Even the right of rescission's 3 year time limit is complicated as you often have to give back the property and loan proceeds in order to move forward with that remedy.

All in all, the majority of loan audits will not help you get a loan modification and are just another way people are trying to take your money. Only if you have very serious claims will it potentially make a difference and usually you have to go after the bank for monetary damages which doesn't guarantee you will keep the home or get a modification.

If someone claims all kinds of success in getting modifications or that their loan audit will push your mod through, take a look at this link with the minimal amount of permanent modifications in 2009 nationwide under the Making Homes Affordable Plan (66,000). Clearly, no one has a magic bullet that will guarantee modifications.

http://makinghomeaffordable.gov/docs/report.pdf

Loan Modification = Frustration & Delay

The numbers announced last week by the administration show that some progress is being made on mortgage loan modifications. Approximately 66,000 final modifications nationwide were completed in 2009 under the Obama Making Homes Affordable Plan. That is a very small number since the number of eligible homeowners is somewhere in the millions. However, only 33,000 had been completed through the end of November, so the lenders completed an additional 33,000 in the month of December alone. This tends to show that lenders might finally have the infrastructure and processes in place to get modifications done.

There is also the thought that the servicing companies doing the modifications don't really care if they get them done or not. In fact, servicing companies can often make more off fees to foreclose than just servicing a loan or getting it current. The holder of the note/investor may not even be the one making the decision that can have drastic impacts on them. It seems that banks have already taken the accounting hits for dropping homes to fair value, so they don't have a problem letting them go to auction or selling at a short sale for current market price.

In any event, we will soon see how much can get done in 2010.

Chris Barsness, Esq. MBA

http://www.bankruptcylawyerla.net

Bankruptcy- do it yourself or hire an attorney?

Many people question whether they should save money by filing their own bankruptcy case or hiring a petition preparer or other online source that puts the forms together. Bankruptcy is a federal court case that can have long term implications on a person's credit, finances, and their life in general. People pay for health insurance and pay to see a doctor when anything might affect their health long term, yet they fail to seek expert advice when it comes to their financial health.

Many of our cases come from people who did their case on their own and now have to pay significant fees for us to correct what was done improperly in the first place. The bankruptcy code is a complex set of laws and procedural rules, many that vary by court location with local rules. Many petition preparers do not have access to the local forms that need to be filed. Petition preparers or doing it yourself does not give you the proper guidance and legal review of which bankruptcy case is best for you, how to prepare for bankruptcy, how to list assets and debts, how to go through the process, which exemptions to claim, how to save your home or other assets, and how to minimize the long term impacts. If you fail to properly file the required forms, including required local forms, the court can dismiss your case. At that point, you would have to pay the filing fee again to refile and have lost weeks or months that your case could have been moving forward.

If you fail to list a debt, you can still have liability for it after the case. Our firm runs checks to be sure we are aware of all debt that may be out there, even some that you may have forgotten about or didn't even know was there.

Bottom line, be sure to investigate all the possible consequences before deciding to do your own bankruptcy. It may sound better to save the money and not get expert advice, but realize that you are eliminating all kinds of debt, so paying a little up front to be sure you are protected and getting rid of hundreds or thousands of dollars a month in payments can be worth the investment.

For more information, go to our website or call for a free consultation 888-881-6591.

http://www.bankruptcylawyerla.net/BankruptcyServices.htm

Obama HAM program failure

In a report out last week, the number of final modifications completed by the major banks under the main Obama HAM program are ridiculous. Some 31,382 homeowners have entered into final modifications through the end of November under that specific program. That is out of millions of eligible homeowners, of which 759,000 have entered into trial plans. Here is a breakdown:

According to the report, through the end of November, J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 41.32, +0.46, +1.13%) has 143,027 three-month trial modifications started under the program. It has made 4,302 modifications permanent. Wells Fargo Bank /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 25.81, +0.15, +0.57%) has 104,808 trial modifications started and 3,537 permanent modifications using the program.

But Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 15.31, +0.12, +0.79%) has started 158,462 three month trial modifications with the program and has made just 98 permanent. Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 3.47, -0.09, -2.53%) has started 103,478 three-month modifications under the plan. Of those only 271 have become permanent.

There are other programs that have resulted in modification for homeowners, but clearly the banks are more willing to foreclose on properties than modify loans. Most major banks have announced in the last week their intent or completion of paying back their TARP bailout money. They obviously want to be out from under public scrutiny and restrictions on payment of excessive salaries and bonuses.

The president met with 10 major bank CEO's this week to push several issues, including speeding up modifications, but we will see if it actually makes any difference.

Chris Barsness, Esq.

http://www.loanlawyermodification.com

Loan Modifications Slow - Bankruptcy Better Option to Save Your Home

The Obama administration released figures at the end of last week indicating that only 32,000 homeowners have entered into final loan modifications under the HAM program this year. That is out of the several million homeowners that are likely eligible. These results show that lenders are slow or unwilling to finalize modifications to save homeowners. Lenders are putting homeowners in 3 month trial plans that are lasting 6 months and not leading to final modifications.

A Chapter 13 bankruptcy can result in elimination of 2nd mortgages and other debts and allowing homeowners to keep their homes. A Chapter 7 can still allow homeowners to keep their homes as well through reaffirmation agreements. The additional bonus is that the bankruptcy puts a stop on foreclosure or eviction proceedings, resulting in additional time for the banks to get their acts together and start finalizing modifications. Homeowners without this protection are relying on lenders telling them they will hold off on selling the home, but that is not a legally binding agreement. I get new clients who tell me their lender said they were working with them and not to worry, only to get an eviction notice stating their home has already been sold.

Now is the time to take action. Do not rely on a customer service rep telling you not to worry, they won't sell your house, because they will. You will never hear from that person again and they are not about to help you find a new place to live.

For a free consultation with an actual attorney and not a paralegal or assistant, call us today. 888-881-6591.

http://www.loanlawyermodification.com

Obama HAM program still not effective

The following was reported by the Associated Press and reveals the lack of progress from the banks. The home is not safe until the permanent modification takes place, so there is significant risk of a trustee sale until that happens. A short sale or bankruptcy filing are alternatives to the long and unknown modification time frames and stressful postponement of trustee sales pending modification review.

Only about 10,000 homeowners have received permanent loan modifications under the Obama administration's mortgage relief plan, evidence of continuing woes for the government's effort to stem the foreclosure crisis.

That means fewer than 2 percent of the 650,000 homeowners enrolled in the program as of October had their mortgage payments permanently lowered to more affordable levels. The results spotlight the limited success lenders are having in getting borrowers through the trial period, according to an oversight panel report released Wednesday.

The Treasury Department is expected to release updated numbers through November on Thursday.