Archive for the ‘General’ Category

How to Get Good Loan Modifications Without Getting Ripped off

Due to the rise in the prices of goods and services, a lot of people are tightening their belts in different ways—one of these ways is by applying for loan modifications for their existing ones. We admit that sometimes, we get carried away with purchasing the things we want and the things we desire without as much as thinking about them. Sometimes, we also save up for something, but unexpected circumstances get in the way, therefore redirecting our hard-earned money somewhere else. Thank goodness for these loan modifications that allow you to change some parts of your loan agreement with some banks. Given this, payments are made more affordable and you do not have to pay the default for your loan. Most banks choose to offer loan modification programs in order to make things easier for both parties.

When choosing from a number of loan modifications offered, you must be ensured that you don’t get ripped off, or end up paying more than what you bargained for; otherwise, the loan modification will absolutely make no sense, right? Here are some tips on how you can be sure to get the best loan modification program without getting ripped off. 

One of the recommended plans of action when choosing loan modifications is that you could choose to hire a loan modification specialist. I can help you sift and sort through various loan modification companies and refer you to a reputable one that is reliable and has had numerous clients who may prove this company’s authenticity. You may also call the companies referred to you by us and ask what you can expect from the company. 

It is also important to note that authentic loan modifications will usually give a written agreement stating the terms and policies of your modification. Do not completely trust various radio and television advertisements because they are often scams.

Written by Carol Pefley

www.carolpefley.com

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Bankrupt Bay Area homeowners shed second mortgages

By Pete Carey
pcarey@mercurynews.com

Posted: 05/09/2011 09:10:53 AM PDT
Updated: 05/09/2011 03:13:28 PM PDT
Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.

Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the Bay Area during the past two years.

“It’s a big thing in our valley,” said James “Ike” Shulman, a San Jose bankruptcy lawyer. “But it’s not widely known.”

Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses — including three last week.

Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.

“This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value,” Moran said.

Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments

are required while the homeowner completes a repayment plan for other debts — which typically takes three to five years. At that point, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing bubble, when home prices were going in one direction only — up, up and up.

“A lot of these are loans that shouldn’t have been made at all,” said Henry Sommer, editor of Collier on Bankruptcy, a publication on bankruptcy law.

One of Shulman’s clients, Veronica — who asked that her full name not be used — was struggling to keep the San Jose house she bought in 2005 for $612,000.

Her home’s value has dropped to about $367,000 — less than her first mortgage of $489,000 — which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion.

She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.

“It’s wonderful,” she said. “After almost six years, I am finally able to see the light at the end of the tunnel and I’m so, so grateful.”

Mortgage bankers don’t like the practice.

It’s “a troublesome phenomenon. It’s one of those things that’s just now developing and bubbling up,” said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. But there is little the mortgage industry can do, aside from seeking to change the law. That could be difficult given the current partisan lineup in Washington.

And there are no complaints from investors in first mortgages, like the pension and retirement funds represented by the Association of Mortgage Investors. “We think with the right controls, something like this to allow a responsible, distressed homeowner to reorganize their assets, liabilities and cash flows is a very pro-business proposition,” said Chris Katopis, the association’s executive director. “We disagree with what the mortgage bankers associations are saying on this.”

The law has been like this for years, bankruptcy lawyers say. It’s just never been used as much because in the past there was usually enough equity in a home to cover the second mortgage.

“We’re having great results” using the rule, said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

That put the borrower in “a safe zone” where she could work out a modification of her first mortgage, Evans said.

Contact Pete Carey at 408-920-5419.

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Home buyers lack mortgage know-how

 

A new survey indicates that home buyers are ill-prepared to take out a mortgage, answering basic

questions about mortgage information incorrectly nearly half (46 percent) of the time, according to a

Zillow Mortgage Marketplace.

MAKING SENSE OF THE STORY

statements, including “The rates of 5/1 adjustable-rates mortgages always increase after years.”

Although the correct answer is false, because 5/1 ARMs do adjust after five years, but the rates

could go up or down, 57 percent of people surveyed answered this question incorrectly.

More than 1,000 home buyers were asked to respond true or false to eight mortgage-related

always buy mortgage discount points. The fact is, the decision hinges on how long the borrower

plans to own the property, and in some situations, buying mortgage discount points is not

worthwhile.

Forty-five percent of home buyers surveyed also incorrectly stated that home buyers should

by lender, incorrectly thinking lenders are required by law to charge the same fees for credit

reports and appraisals.

An additional one-third of respondents do not understand that lender fees are negotiable and vary

financing. With a pre-qualification, which is the earliest step in the mortgage process when a

lender approximates the amount the borrower can afford, the lender does not run the borrower’s

credit or request any documentation to verify the information provided by the borrower.

Survey respondents also believe that pre-qualifying for a loan means they have secured

Housing Administration (FHA) loans are available to all buyers, but instead believe only first-time

buyers qualify. In reality, FHA loans can cost less for many buyers, including repeat buyers with

low to average credit scores and with down payments of less than 20 percent.

Read the full story

Slightly less than half of the polled prospective home buyers also do not understand that Federal

http://bit.ly/mOIjsw

 

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Pet adoptathon on Saturday in Santa Clara

Posted: 05/04/2011 09:58:24 AM PDT

 

Find your “purrfect” furry companion at a pet adoptathon Saturday at the Silicon Valley Animal Care Center in Santa Clara.

The public is invited to the free event from 11 a.m. to 3 p.m. at 3370 Thomas Road. Adopters can pay what they want. On hand will be a slew of dogs, cats, kittens, rabbits, birds, hamsters, mice, chinchillas, and rats.

The Friends of SVACA will hold a raffle during the event and local rescue groups will have animals available for adoption. Some of the groups will be: Cavy House, North Star Rescue, Dusty Paws

Rescue Inc., Mickaboo Companion Bird Rescue, Pug Rescue of Sacramento, Southern CA

Dachshund Rescue — North, Big Dawgs Rescue, Bull Terrier Rescue, Inc., and Towncats.

From noon to 2 p.m., dog training demonstrations by DJ’s Clever Canines and Stacy’s Wag’N’Train will be performed.

Contact Lisa Fernandez at 408-920-5002.

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What Are Foreclosure Sales

Foreclosure sales occur when a be a bank or a building society, sells the property in possession of a homeowner when the latter defaults on his principal or interest payments on his or her mortgage. When a buyer wants to purchase real estate, he borrows the money from a lender by getting into a contract. One of the conditions of the contract is that in case of a default in the principal or interest payments, the lender can take possession of the property and sell it to recover the mortgage debt and legal costs. Foreclosure is the legal proceeding by which the mortgagor’s equitable right of redemption is terminated by the lending party.

Before foreclosure sales happen, the homeowner is given the chance to pay the lender the outstanding of the debt and redeem his property. If the borrower fails to pay within three to six months, then a Notice of Default is recorded by a trustee against the borrower and a reinstatement period of about five days starts after which the home is auctioned off.

After the default, a foreclosure sale date is established and a Notice of Sale is received by the owner and also posted on his property. The Notice is recorded at the County Recorder’s office and published in newspapers. At the Trustee Sale, the property is sold off to the highest bidder who receives the Trustee’s deed to the property. Payment is usually made in cash in foreclosure sales.

The opening bid in foreclosure sales is set by the foreclosing lender. This includes the loan due, interest accumulated and other legal costs undertaken for the auction. If there are no higher bids, then the property is purchased by the attorney conducting the sale, on behalf of the lender. In the above case, the property is considered a Real Estate Owned. This is likely to happen if the property‘s worth is less than the amount due to the lender.

The properties listed for foreclosure sales can be found by various ways. One way is to search public records. Visiting the County’s Office can provide us with information on a Notice of Default or a Notice of Sale. This can be done free and one can get to know about the latest foreclosure sales here. Alternatively, one can search online for foreclosure data providers. By availing an online listing service, one can check the free trial offers to see which provider best suits you. Both national and regional foreclosures are listed.

Contact me if you need help with any and all of your real estate needs. 

Written by Carol Pefley

www.carolpefley.com

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