Thursday, May 21, 2009

Lenders Pay Cash For You To Leave Your Home

Many homeowners are unaware of the options that they may have when they are delinquent on their home loan. They hear about loan modifications and think that this will automatically save their home and is the only option they have. Many homeowners simply let the bank foreclose and simply walk away from their home. You should always know all your rights before making any decisions!!

Depending upon where you are at in the foreclosure stage, your lender may have a financial interest in you leaving your home quietly and quickly. Often lenders who see homeowners that are over 9 months delinquent or who have tried to do a loan modification and failed decide that they are simply going to move forward with foreclosure. They take into account many factors, but keeping a good person in their home they have lived in for 30 years is not one of them. It all comes down to the profit and loss, the almighty dollar!

Even in non-judicial foreclosure, which, here in California is a trustee sale of property, the bank has to incur substantial costs and time delays to foreclose. The lender looks at the costs and is often willing to pay cash to get a deed in lieu of foreclosure. This simply means that you agree to turn over the home to the bank and walk away at a certain time. This saves the lender the costs of paying the trustee to send notices, schedule the sale, attend the sale, transfer a trust deed, and then go to court to evict the homeowner. Even if your lender has taken title at a trustee sale and are entitled to immediate possession, they cannot simply go in and change the locks to force you out. If you occupy and are still in possession of the house, they have to serve you with a notice to quit and then go to court to get a court order to get you out. The lenders will often pay what is called "cash for keys" to avoid hiring attorneys and going to court to force you out.

Often the right negotiations and key pieces of leverage can get homeowners thousands of dollars from the lender that can help them start a new life.

We handle these types of cases and can assist you in obtaining the best possible remedy for your situation.

The information contained above is informational only and only discussed California law, you should consult an attorney in your state to evaluate all your legal options.

Chris Barsness, Esq.

Tuesday, May 19, 2009

Congress approves Helping Families Save Their Homes Act of 2009

May 19, 2009- Congress passed the Helping Families Save Their Homes Act of 2009 sending the legislation to President Obama for signature. This program expands the previously announced Obama Making Homes Affordable and Homeowner Affordability and Stability plans. Although the provisions that would give bankruptcy judges the power to cram down mortgage in bankruptcy proceedings was absent, the legislation adds more incentives to lenders to keep people in their homes with reasonable payments through mortgage modifications.

The act expands the number of homeowners who will be eligible for loan modifications. These programs can extend mortgages to 40 years, reduce interest rates, and reduce the principal on both first and second mortgages for a person's primary house. If a home that has a modified loan under this program is sold within the first 5 years after the modification, the mortgage holder (lender) gets anywhere from 10 to 90 percent of any equity accumulation from the net sales proceeds.

Since the plan gives the loan servicer (who is usually the only person you can negotiate with when it comes to your loan) a safe harbor when entering into certain loan modifications, workouts, or other loss mitigation plans, this should help push servicing companies to worry less about liability in modifying loans and more about helping homeowners.

The legislation also extends the increased Federal Deposit Insurance Act (FDIC) coverage limit from $100,000 to $250,000 from the end of 2010 to the end of 2015.

Chris Barsness, Esq.
Law Office of Barsness and Cohen

Thursday, May 14, 2009

Obama modification plan working

The administration announced today that 55,000 loans were modified so far under Obama's making homes affordable plan. Although it took weeks and even months for the servicing companies to implement the programs that were expanded to apply to second mortgages, the lenders now are beginning to approve and process the applications.

In addition, the administration wants to expand the program to help those who are not approved for a modification to obtain assistance with a short sale or deed in lieu of foreclosure by giving lenders incentives to work on these alternatives to foreclosure.

"If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future," said Treasury Secretary Geithner. "These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to our economic recovery."

This is a very positive sign that although the number of foreclosures is rising, there is help out there for homeowners.

For more information, visit us at
Law Office of Barsness and Cohen

Friday, May 1, 2009

Obama Bankruptcy Mortgage Cram Down Fails

April 30, 2009- The second step in assisting homeowners who are in jeopardy of losing their homes in foreclosure was defeated today in the U.S. Senate. The proposed law would have given bankruptcy judges the power to force lenders to modify mortgages on the debtor's home. The so-called "cram down" powers would be useful in adding leverage on the big banks to work with homeowners to avoid a judge ordering a modification. As it is now, the borrower can attempt to re-affirm their debt with the lender to keep their home during the bankruptcy process. They will still be able to attempt this; however, the banks will likely not be as willing to make any kind of changes or modifications to the actual terms. They will likely ask the borrower simply to reaffirm the debt on the same terms they originally had, but adding the unpaid or late payments to the principal.

If you have any questions about bankruptcy, loan modifications, or foreclosure relief, you can call for a free consultation.

Chris Barsness, Esq.
Law Office of Barsness & Cohen, Beverly Hills, California