Foreclosure Defense Secrets.com

If you can buy enough time to find a buyer for your house and to get your contract for sale approved by your lender, a short sale can save you from the long and arduous foreclosure process and the repercussions post-foreclosure. As you read my eBook “Foreclosure Defense Secrets,” I will walk you through how to use the short sale process to protect yourself from foreclosure, or even how to keep your home and avoid foreclosure altogether. Find out more at www.ForeclosureDefenseSecrets.com.

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Not many people are aware, but last April the Senate proposed legislation to prevent foreclosure from accelerating so quickly. Here are a few of the benefits of the Act:

FHA Modernization. To ensure that additional families can access the FHA program, which provides safe, fixed-rate mortgages, significant FHA reform is included to modernize, streamline and expand the reach of the FHA program. Under this bill, the FHA loan limit is increased from 95% to 110% of area median home price with a cap at 132% of GSE limit (currently, $550,000), allowing families in all areas of the country to access homeownership through FHA. Downpayments of 3.5% will be required for any FHA loan and counseling requirements are enhanced to help provide for stable homeownership.

Assisting Communities Devastated by Foreclosures. Homes that have been foreclosed upon and are sitting unoccupied lead to declines in neighboring house values, increased crime and significant disinvestment. To ensure that communities can mitigate these harmful effects of foreclosures, $4 billion is provided to communities hardest hit by foreclosures and delinquencies. These supplemental Community Development Block Grant Funds will be used to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in house values of neighboring homes.

Providing Pre-Foreclosure Counseling for Families in Need. To help families avoid foreclosure, this bill provides $100 million in additional funding for housing counseling. These funds will be distributed by the Neighborhood Reinvestment Corporation by the end of 2008 to ensure families can quickly get the help they need. As many as 250,000 additional families connect with their mortgage servicer or lender to explore options that will keep them in their homes as a result of these counseling funds.

Enhancing Mortgage Disclosure. To ensure that consumers are provided with timely and meaningful disclosures in connection with mortgages, the bill expands the types of home loans subject to early disclosures (within three days of application) under the Truth In Lending Act (TILA) including refinancings. The bill requires that disclosures be provided no later than 7 days prior to closing so borrowers can shop for another loan if not satisfied with the terms. The bill requires a new disclosure that informs borrowers of the maximum monthly payments possible under their loan, and also increases the range of statutory damages for TILA violations from the current $200 to $2000 to $400 to $4000.

Preserving the American Dream for Our Nation’s Veterans. To assist returning soldiers avoid foreclosure, this bill lengthens the time a lender must wait before starting foreclosure from three months to nine months after a soldier returns from service and also provides returning soldiers with one year relief from increases in mortgage interest rates. In addition, the Department of Defense is required to establish a counseling program to ensure veterans and active service members can access assistance if facing financial difficulties. Also included is a provision that increases the VA loan guarantee amount, so that veterans have additional homeownership opportunities.

Standard Property Tax Deduction. To make tax relief available to all American homeowners, the bill will provide a standard deduction – $500 for single filers and $1,000 for joint filers – for the 28.3 million non-itemizers who pay property taxes. Present law allows only those who itemize deductions on their Federal tax returns to deduct state and local property taxes from their income.

Mortgage Revenue Bonds. To provide for refinancing of subprime loans, mortgages for first-time homebuyers and multifamily rental housing, $10 billion of Federal tax-exempt private activity bond authority is included in this bill. The measure also exempts interest earned on the bonds from the alternative minimum tax.

Extension of Net Operating Loss Carryback. To aid homebuilders and other businesses hit hardest by the economic slump, this bill will extend a law allowing corporations to apply excess net operating losses to tax returns from prior profitable years and receive any applicable refunds. For 2008 and 2009 losses, the provision would extend the “net operating loss (NOL) carryback” to four years (back to 2004 and 2005, respectively) from the two years currently in law. Measures to prevent companies from abusing the intent of the provision are also included.

Tax Credit for Purchase of Homes in Foreclosure. To encourage the purchase of homes already in foreclosure and of homes on which foreclosure has been filed, this bill creates a $7,000 tax credit for buyers of such homes, to be claimed over two years. Homes in foreclosure bring down the value of property nearby. Encouraging the purchase of more homes in foreclosure will restore property values for all homeowners.

The Act is a good attempt at mitigating future foreclosures, but if you are currently facing foreclosure, you still need to take your defense into your own hands. Learn more at www.ForeclosureDefenseSecrets.com.

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Whose fault is it?  There is a lot of blame to go around.  After all, there is no one person or entity that could cause such an economic crisis, no matter how hard they might try.  As the attorney hired by the banks to execute the foreclosures, I have had the opportunity to interact with all of the possible culprits.

Is it the bank’s fault?  Well, there are two banks to speak of in most foreclosure situations; there is the bank that did the lending and the bank that purchased the Note and Mortgage and is now initiating the foreclosure.  The bank that purchased the Note and Mortgage as an investment is a victim.  They do not want to foreclose.  They thought that they would be collecting mortgage payments and that the loan was a good loan.  They clearly thought wrong.

Is it the lending bank’s fault?  The bank that originally lent the money did so because the borrower met certain qualifications.  The bank reviewed the loan application that was filled out by the borrower or the mortgage broker and lent the money based on that application, however they failed to verify any of that information by requesting proof of employment history, credit scores, or income statements.  They thought the loan applications were filled out honestly.  They clearly thought wrong.

Is it the borrower’s fault?  The borrower was looking at a real estate market that was skyrocketing.  They figured that they could purchase a house now and sell it later for way more than they paid because real estate is the safest investment and the real estate market would continue to rise.  They thought that any loan they would receive today would easily be paid bank with the equity they could pull from their ever-increasing value of their house.  They clearly thought wrong.      

Who is to blame for the mortgage foreclosure crisis?  Everyone.  We all thought we were making correct decisions and we were all wrong.  No one stopped to take the time to educate themselves before taking these unnecessary risks.  The true cause of the massive amount of foreclosures facing the nation today is ignorance.  Suffice it to say, our best weapon against foreclosure is education.  Educate yourself at www.ForeclosureDefenseSecrets.com.

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The biggest enemy to a distressed home owner is the person claiming they can help them when they really just want to take advantage of an unfortunate situation. Take some basic precautions against being taken advantage of:

• Don’t sign any documents that confuse you.  Show them to an attorney.
• Get all “promises” in writing.
• Beware of any loan assumption offers where you are not formally released from liability for your mortgage debt and contracts of sale.
• Check with a lawyer or your mortgage company before entering into any deal.
• If you’re selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer.  Contact your state Attorney General, State Real Estate Commission, or local District Attorney’s Consumer Fraud Unit for this information.

If you decide to do business with another foreclosure consulting company, be sure that they are operating within the boundaries of the law.  Many people were fooled by dishonest mortgage brokers. It is important when dealing with loss mitigation that they don’t get fooled again.

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To paraphrase Senator Barack Obama, we need to use the strokes of a scalpel and not the hacks of a hatchet to solve the economic crisis facing the nation today.  While Sen. Obama was referring to the Federal budget, the same advice should be heeded when discussing possible solutions to the mortgage foreclosure crisis.

Recently, Bank of America purchased Countrywide Home Loans and immediately put most of the loans on hold in an attempt to work the loans out with the borrowers.  In order to qualify for possible loan modification, the property must be the borrower’s primary residence and the borrower must have an income substantial enough to make the monthly payments on the new loan.  However, putting all of the loans on hold may not be the smartest move when it is only a small percentage that will be able to be adjusted.

If there were a nationwide moratorium on foreclosure, it would cripple the way the nation currently runs.  Banks would not be able to stay in business.  The finance world would see massive layoffs and unemployment would skyrocket.  Since the banks wouldn’t be permitted to collect on the loans they currently own, they would cease giving any more loans out.  That means no new homes, no new cars, no small business loans, and no financing for jewelry or Christmas presents.  America would stop running.

Perhaps a better plan would to carve out exactly those loans that can be modified.  If the banks simply go through the loans currently on file and foreclose those homes that have been abandoned first, they will be able to turn around and sell those homes to new qualified buyers at a discounted rate.  New homeowners will provide the bank with income and raise the property values of those houses surrounding currently vacant properties, which can sometimes become havens for drug dealers and vagrants.

After all of the vacant houses are foreclosed, the banks should then focus on modifying those loans that are in default, but with borrowers who are gainfully employed and had fallen on temporarily hard times or whose loans have adjusted to levels higher than they can currently afford.  At this point, the homeowners who are trying to protect their homestead will be successful in doing so, the banks who intend on staying in the lending business will be able to, and the housing market will begin to level out and even show signs of increasing.

Currently, eighty percent of the people in this country own homes.  According to the United States committee on Housing and Urban Development, only seventy percent of adult Americans should ever own a home at any one time.  We dont need to foreclose all eighty percent to save the banks.  We dont need to protect all eighty percent to save the homeowners.  We need to reduce the amount by a mere ten percent.  We need a scalpel, not a hatchet.

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You can take it directly from a foreclosure attorney: neither John McCain’s plan to buy up all of the “bad loans” nor Barack Obama’s plan to enforce a nationwide freeze on all foreclosures will help this country. In fact, both plans will hurts us immensely.

The Federal government cannot buy up the bad loans because that will give the banks a blank check to write more bad loans. It will also be a bad investment for the taxpayers since the government will be using taxpayer money to purchase homes that are extremely overvalued, and continue to decrease in value, so that when the government tries to sell or negotiate these loans, there will be no chance of taxpayers recouping the money spent.

The Federal government cannot put a mandatory freeze on all foreclosures because over 70 percent of the houses currently in foreclosure are vacant and the properties will continue to erode. Property values of the homeowners that a current with their mortgage will decrease as the properties surrounding them remain vacant. The other impact to a 90 day freeze on foreclosures is that the banks, already barely keeping their heads above water, will fail because they cannot collect on the loans already issued. This will force further economic collapse as there will be no lending for houses, cars, or small businesses. The nation cannot run without a healthy banking system.

Neither of the candidates have a viable plan for fixing the foreclosure problem facing the country today. The only way to protect yourself from foreclosure is to use the legal system to your benefit and negotiate a modification of your loan with the bank. This will save the individual homeowner and the national economy as a whole. Learn more about how to accomplish this goal by reading the eBook available at www.ForeclosureDefenseSecrets.com.

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The stock market is plummeting, banks are going belly up, and the value of the US dollar is almost comical.  These tragic economic declines are all interrelated, as are the price of gas and the devastation caused by Hurricane Ike.  How does this affect you?  Aside from the obvious reduction of your 401(k) and the painful cost of filling up your car, this economic decline has a direct affect on the foreclosure market.  What may surprise you is that this bad economy may actually help those people facing foreclosure.

As the economy declines, so does the stability of the banks that loaned the money and the investors that purchased those loans from the bank.  The banks can’t afford to take back all those houses that they are attempting to foreclose.  They don’t have the infrastructure to handle real estate and wont be able to implement any with all of the impending layoffs coming.  This means that the banks will be much more willing to work with borrowers in modifying their loans or approving short sales at lower prices.

The problem facing both the borrowers and the banks is the lack of time.  While the banks want to work with the borrowers, the attorneys employed by the banks are mandated to get the foreclosure judgments entered and get the properties sold as quickly as possible.  I know this doesn’t make sense since it isn’t what either party wants, but it is simply a result of one hand not knowing what the other hand is doing.  The loss mitigation department of the bank wants to accomplish one agenda and the legal department is attempting to accomplish a contradictory one.  So what is the answer?

The answer is that borrowers need to stall the foreclosure actions against them for as long as they possibly can.  Borrowers need to use the legal system to their advantage and fight the foreclosure attorneys at their own game.  By stalling the foreclosure process, the borrowers are buying themselves time to work with the banks and either modify the loans they have, refinance under new loans, or sell the property to another buyer.  In order to accomplish this goal, knowledge of the legal system, the foreclosure process, and the stall techniques are required.  For more on how to attain this knowledge, visit www.ForeclosureDefenseSecrets.com.

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