Mortgage settlement leaves most homeowners to fend for themselves and convinces other that they will get helped falsely

The landmark $25 billion settlement reached by the federal government, 49 states and the nation's
five biggest banks will provide long-overdue relief for hundreds of thousands of homeowners who have been struggling to navigate the mortgage mess created by lenders.
The wider impact for most homeowners, along with the housing market and economy, will be much more limited.

“You’re hardly skimming the surface,” said Paul Dales, a housing economist with Capital Economics. “It could help some people a lot, individually. But in terms of the big-picture, overall economy and housing market, it’s really just a drop in the ocean of the problem.”

The settlement takes a multipronged approach to try to unravel the aftermath of a housing market collapse that resulted in more than seven million foreclosures, created a legal morass for lenders and left a red tape nightmare for millions struggling to hang onto their homes.

information about the mortgage settlement

Who May be Eligible for Assistance

Because of the complexity of the mortgage market and this agreement, which will be performed over a three-year period, borrowers will not immediately know if they are eligible for relief. Borrowers from states who did not sign the settlement will not be eligible for any of the relief directly to homeowners. Borrowers from Oklahoma will not be eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement.

The settlement provides assistance for:

• Homeowners needing loan modifications now, including first and second lien principal reduction. The servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.State attorneys general anticipate the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay.
• Borrowers who are current, but underwater. Borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide.
• Borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. $1.5 billion will be distributed nationwide to some 750,000 borrowers.

What the mortgage settlement means to you

If you are underwater on your home or struggling to pay your mortgage, you are probably wondering whether you can expect relief under a $25 billion settlement reached by state and federal officials with the nation's biggest banks.

The short answer is, you probably won't know right away.

According to details laid out on a new "National Mortgage Settlement" website, the payments and other relief will be made over a three-year period and "borrowers will not immediately know" whether they are eligible.

There are three main categories of people who will be aided under the settlement, according to the site:

Loan Lookup

To find out if Fannie or Freddie hold your loan click on the links below. Enter the requested info JUST as listed on your mortgage statement for best results.

{LINK} FREDDIE MAC {LINK} FANNIE MAE

HOW DOES THE MONEY WORKS IN A SHORT SALE

THE CONTRACT SAYS SELLER TO PAY FOR CLOSING COSTS –I’m a seller in hardship and don’t have money to pay those costs. Am I really expected to pay them?  (Explanation of who pays what in a short sale)

SINCE THE CONTRACT IS BETWEEN THE BUYER AND SELLER (ONLY SUBJECT TO THE BANKS APPROVAL OF TERMS) THE OFFER ON THE PROPERTY WOULD READ $100,000 SELLER TO CONTRIBUTRE $3,000 TOWARD THE BUYERS CLOSING COSTS. THE SELLER IS NOT REALLY PAING THE COSTS AS THE COSTS ARE BEING ABSORBEED IN THE BANKS LOSS.

FOR EXAMPLE- let’s say you are selling your home and you owe $100,000 and its worth $200,000, lets further say you have an offer for $200,000 and the buyer wants their $6,000 closing costs paid. Your costs as a seller are $16,000 for commissions, property tax and title insurance as well as the normal costs associated. You would be getting a check for $78,000 when the home sold. NOW let’s say the same seller is selling they owe the same amount and the costs are the same. BUT the home is now only worth $102,000 and offer is on the table for $100,000. Let's say the bank accepts the $100,000 offer. The bank cannot get their entire $100,000 payoff because the home is not worth more than the mortgage note and cost to sell. So the bank accepts $100,000 the costs to sell. At the lower price the costs are not $16,000 & $6,000 anymore. They are now $8,000 & $3,000. So the seller gets $0 and the bank gets $86,000 a $14,000 loss to the investor on the loan.

WHO’S WHO and WHAT’s WHAT in a SHORT sale

The sale is between the BUYERS & SELLERS, the bank is NOT part of the sale rather the sale is subject to the banks approval of terms & allowances.

Buyer & Seller agree to terms they wish to send to the bank for review. Those terms are NOT binding and the sale cannot move forward UNTIL the bank approves them. Rarely does the bank approve the original buyer & seller terms.

The bank will issue a counter or an approval in writing of; sales price, paid closing costs for the buyer, total closing costs allowed to cover commission, title insurance, jr liens, HOA & utility costs. They will set future terms for the seller. Penalties, promissory note, cash contribution and difference balance terms.

Once the approval letter and all final terms the bank will accept and won’t accept are presented to the seller’s agency or seller decisions need to be made. At that time the seller and buyer and their agency must decide if they feel comfortable with those terms.

If they do they move forward with a binding contract in writing with real terms and real dates of the contract. The buyer is then given time to complete inspections and loan process. The buyer can still walk away from the deal during their dated contractual time frames without losing their earnest money.

All parties MUST close by the date the bank requires and send final funds and HUDS in time to have them approved and dispersed. Any pending foreclosure dates and bank requirements MUST be managed through the process. Some lenders require approval to close, so be careful not to show up to closing until approval to close is given from the servicer.

what is what and who is who in a short sale

Selling a short sale is a totally different thing than selling a standard sale.

Your agent for both buying and selling needs to fully understand short sales. If they do not you may be financially harmed.

Don't do a short sale or purchase a short sale if you don't understand all the emotional, monetary and instability that a short sale will bring.

Pricing- the price a short sale is listed at is set by the seller, though the bank may have previously approved the price things change every time a new offer is presented or a current value expires. a "good deal" is a fantasy until the bank approves that price in writing. Don't get fooled by price.

Maintenance Issue's- Sellers in short sales are emotionally and financially burdened. Some have personal issues or health issues. All are losing their home. The usually don't have the means to maintain the home. The condition may be poor and get worse throughout the process. Items like utilities, HOA payments and such may become a problem for them. Therefore a buyer needs to understand and be prepared for getting utilities current, taking over the costs, paying for appraisal condition repairs them selves, AS-IS sale, unexpected repair and financial costs.

Conditional issues- condition may be poor, or distressed. Properties may be vacant. the bank may at any time change the locks or shut off the water & winterize the home. Getting that reversed required a licensed plumber and will likely become the buyers cost and responsibility. If the locks get changed a HUD key will open the door.

Personal strain- As previously stated sellers in short sales are emotionally and financially burdened. Some have personal issues or health issues. All are losing their home. The usually don't have the means to maintain the home. Some get hostile or very upset when a buyer seems to be happy to be getting the property at such a great deal. Please be sensitive to the fact that the sellers are losing their home and being displaced. Their home ownership dream compromised and they are sad, angry and need to be respected.

instability- nothing is for sure until in writing, then the process still needs to be monitored and bad things can still happen. Foreclosure date may be posted, unforeseen items can arise. All parties need to be focused until its a matter of record (closed & recorded).

inexperience or lack of information- the list agent MUST be skilled! The entire process rests in their hands. FULL disclosure is required. If they don't know what they are doing, are seemingly untruthful or don't communicate things that the seller and buyer need to know then DON'T place on offer on that home or list with that agent. If you have a family or friend that's a realtor and you feel badly not using them simply pick the BEST agent for the job and ask that agent to give a referral fee to the friend. that keeps the love alive and prevents a lot of problems.

the WAIT- Short sales take forever. there are great big gaps with no news. don't show a buyer short sales that needs to be in a home in 4o days. Don't get hostile with a listing agent that is dealing with the bank. Even the best SS agents can speed up most of the steps. Also a guesstimate on time is just that. there are so many steps and phases that have so many different departments and people involved. Be patient or don't get involved with short sales.

IF you get approved for HAFA and close under HAFA short sale

HAFA is a deficiency free short sale that actually provides $3,000 to sellers for relocation expenses. You have to qualify for the program and it does add significant time to the process. Some lenders will not participate and some investor do not participate.

To find out if HAFA is possible for you can call your lender. The person you speak to may not have all the information required to correctly advise you. They also cannot tell you over the phone if you WILL get HAFA approved. That process takes a while.

A HAFA short is done a different way than a traditional short. With HAFA you must fill out a packet for both HAMP (modification) and HAFA (sale) at once. The RDC or third party that facilitates HAFA and HAMP with your lender and investor work your information for a determination of approval. It’s very hard to and slow to get HAFA with Fannie Mae as the investor. Easier if it’s Freddie Mac. You must be late to be considered with Freddie Mac, not with Fannie Mae.

tips to ensure your home sells in the winter

It's not peak selling season, but these smart strategies will help you make sure your home looks good even when the weather is dreary.

The fall home-selling season is a lot like the college football season — both normally end around Thanksgiving, but a smaller postseason keeps going long after that.

It used to be that spring and summer were the hot times to buy or sell houses, but people are much more mobile now. If you want to sell your house these days, you don't necessarily have to wait until spring to put it on the market.

Free Home Valuation

Get a truthful and honest value. INCLUDING the costs associated with a standard sale. Get a truthful picture of what a short sale will be like based on the sepcific facts of your situation. SOme realtors may not know how to handle a listing in this market, let alone a short sale. This is a VERY big decision. I WILL NOT stalk you and force myslef on you. The decision to sell is a BIG one. Sellers just need the honest facts so they they can decide what to do.

HAFA HAMP calculator

HAMP HAFA MHA calculator tool {link}

{LINK} AVOID SCAMS VIDEO

PLEASE watch this video and DONT sign anything that seems to good to be true. DONT pay anyone for services!! If you are in trouble you are a target for scam artists. Unfortunately there are people that seek to take advantage of your unfortunate position. Help & advise should be free. If the person you are seeking help with tells you something that seems too easy or without risk you may be taken advantage of by their "solutions". The an sewers and solutions always come with risk, and effort. Please never trust anyone that you think is not telling you all the risks. I know you just want to keep your home and have the solutions be easy and feel good. That may not be possible. You need truth and real education on your specific fact dependant situation. Watch this video. If you want eduction on your situation you can email me confidentially. I wont pressure you to do anything, wont try to charge you for advice or information and will try NOT to have to sell your home if possible. below the video link is my email address and the things I need to know to answer your questions.

VIDEO- How to Avoid a Scam in Modifications

HAFA

Home Affordable Foreclosure Alternatives (HAFA) Program

Page Content

If you can't afford your mortgage payment and it's time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you. HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls "short" of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.

HAMP

You may be eligible for HAMP if you meet all of the following criteria: Home Affordable Modification Program (HAMP)
•• You occupy the house as your primary residence.
• You obtained your mortgage on or before January 1, 2009.
• You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
• You owe up to $729,750 on your home.
• You have a financial hardship and are either delinquent or in danger of falling behind.
• You have sufficient, documented income to support the modified payment.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction