Joy Olivia Miller

Archive for the ‘Mortgage’ Category

The economic meltdown is revealing itself to be a series of events set off like dominoes cascading to their demise. The latest to fall informs us of issues regarding home foreclosures. Not only did foreclosures hit a record high in September 2010 but public awareness also peaked with inquiry into potential errors on the part of the banks.

I am not an expert on this subject but from recent study will attempt to give a basic overview of this vital personal-finance issue. Dubbed “foreclosure-gate” and “fraudclosure”, banks are “under the gun” by light that shines on their mortgage-banking practices. Due to reports of “robo”signers” (signing foreclosure documents without actually reading them), several large banks initiated temporary document-processing freezes.

A technical procedural misstep would be bad enough but, in fact, the robo-signing at issue diverts attention from the elephant in the board room: Systemic flaws.

The banking industry’s full-court-press homeownership advertising campaign of the early 2000′ lured countless Americans to become “true believers”. The mantra of “real estate would only go up” seemed to hypnotize the masses. Millions threw caution to the wind to exploit the real-estate gold rush.

On the front end, real estate agents and mortgage brokers gladly racked up larger-than-ever commissions and sometimes under-the-table lender bonuses; turning a blind eye to inflated income levels, fake home appraisals and other lies inserted in to mortgage underwriting documents. In turn, word on the street was “all systems go” to those who otherwise would never qualify for a loan.

The rest is history.

Time has proven that many of these financial products were really designed to benefit the financial sector, not the little guy. Wall Street bankers developed them while the government permitted them; a joyous joint venture!

Most real estate professionals knew full-well of their clients’ (often sub-prime) likely inability to repay over the long-term. Bottom line: A defaulting loan and a home in foreclosure were ultimately worth more money. However, the real estate bubble and collapse was just the tip of the iceberg.

At the heart of this story lies MERS the heretofore elusive brain-child of a group of elite bankers who in the early nineties aimed to streamline (speed up) the real-estate mortgage process thereby also avoiding traditional County Recorder title-recording fees.

MERSCorp Inc. (Mortgage Electronic Registration System) was incorporated in Delaware in 1995. MERSCorp Inc. functions as a legal pass-through electronic “conduit”, owns nothing and has no building or employees. Surprise surprise, shareholders listed on its website are some the usual suspects and largest beneficiaries of the TARP bailout and global revenue in general: Bank of America, Chase, CitiMortgage, Inc., Fannie Mae, Freddie Mac, HSBC, SunTrust, and Wells Fargo.

Below is the best overview of MERS I could find by Christopher L. Peterson, Associate Dean of Academic Affairs and Professor of Law, University of Utah, S.J. Quinney College of Law.

“MERS operates a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the United States. Originators and secondary market players pay membership dues and per-transaction fees to MERS in exchange for the right to use and access MERS records.

“But, in addition to keeping track of ownership and servicing rights, MERS has attempted to take on a different, more aggressive, legal role. When closing on home mortgages, mortgage lenders now often list MERS as the “mortgagee of record” on the paper mortgage-rather than the lender that is the actual mortgagee. The mortgage is then recorded with the county property recorder’s office under MERS, Inc.’s name, rather than the lender’s name-even though MERS does not solicit, fund, service, or ever actually own any mortgage loans. MERS then purports to remain the mortgagee for the life of a mortgage loan even after the original lender or a subsequent assignee transfers the loan into a pool of loans that are ultimately sold to investors-a process known as securitization. Although MERS is a young company, 60 million mortgage loans are registered on its system.” (Now 62 million in 2010 – ed.)

Some of these 62 million homeowners are extremely concerned about the implications of MERS showing as mortgagee of record. US lending laws state that only the owner of a loan can initiate a foreclosure and MERS cannot lawfully own mortgage loans! In addition, investors who purchased pools of bank loans called securitizations now question the accuracy of the ratings assigned to the loans at the time they purchased them. Plus, the legitimacy of the same loan pool sold over and over again to different investors is also under investigation.

Serious questions remain given how MERS private governance of the nation’s real property recording system quietly supplanted centuries-old property law without an act of Congress. To date, class-action lawsuits against MERS are pending in California, Georgia, Kentucky Nevada, and Arizona. Who knows, maybe big banks will be forced to let families stay in their homes as well as buy back deceptive loans they peddled to investors.

Should issues of incomplete and mis-information given to borrowers, lost hard-evidence of title ownership (broken chain-of title) and investor deception prove to be true; will such revelations serve to level the playing field between banks and the people?

Time will tell.

Some analysts say more likely to happen is that President Obama, sometime after the mid-term elections, will sign the very same executive order he pocket-vetoed on October 7 to make it more difficult for families to bring suit against the banks. This might include an official retroactive redemption of mortgage-banking sins and blessing going forward on MERS as the digital savior of the “old school” county-recording system of title.

October 20, 2010, in ABC News Today, Secretary of Housing and Urban Development Shaun Donovan said although reviews continue on foreclosure documentation problems regarding specific lenders and banks who might not be following the rules, there does not seem to be any “underlying systemic problems”.

If you believe this…I have a bridge I’d like to sell you!

There are companies nowadays that stand in between the loan, credit card, or mortgage companies and their debtors. The crux of their duty as they inter meddle in this kind of matter is to both the creditor and the debtor. They foster understanding between their clients and their creditors. The indebted is able to get a total debt relief or a more convenient payment plan while the loan companies will not need to spend money in filling a lawsuit against the defaulting customer.

I will like to ask you one important question: “who are those that felt the impact of the global economic recession most?” Those owing credit card debt or one loan or the other.
Now the global financial crisis rendered a lot of people jobless. Companies downsized, right sized, cut the salaries or wages of employees, declared some staffs or employees redundant e.t.c. In some cases they sacked people. This was a horrible experience for the affected persons and this resulted in mental and emotional torture. Many of those that were affected by this lay-offs or pay reduction exercises were already heavily indebted to either a mortgage or, credit card company. Hence, the need to seek out the solution to their problem of indebtedness.

This is where the debt management companies or firms come in as financial service providing companies that help such individuals to salvage the situation of indebtedness that they have gotten themselves into. These types of financial service firms have been springing up in hoards everywhere with the resultant effect of the indebted person having difficulty in knowing which one will be able to help in delivering excellent debt relief services.

Two of the major things to look for in a debt management company are to ascertain that they are experienced experts in handling debt management issues well and track record of success in most cases.

You are to check with the appropriate body in your locality if such companies are registered with them or if they have the license to operate. In other words, I am saying that you should do your due diligence before you contract the job of your debt management to any company you which to engage.

Hence, you should look out for companies that have been in existence for some years now with qualified experts to attend to your case of indebtedness. Just make sure that you do your findings about the company before you entrust your financial future into their hands.

What Obama Mortgage Plan 2010 Needs To Target?

President Obama inherited these issues when he assumed his responsibilities, and his desire to provide a suitable and effective solution to the mortgage related issues, and to improve upon the American economy resulted into a new mortgage plan – the Homeowner Affordability and Stability Plan or the HASP plan, and the Obama’s Loan Modification Plan. These plans initially looked good on paper, and Americans had a lot of hope and many expectations from the reform programs. However, as on today, the ground reality is different, and findings as well as economic reports submitted by several credit agencies and financial research institutes indicate that the conditions are not that good since fewer individuals and debtors have actually benefited from the plans. The article discusses a few of the findings submitted by reliable financial agencies.

Obama’s plan does not encourage health insurance benefits

One aspect becomes quite clear while analyzing President Obama’s loan modification programs and other health-care related plans – the health care program does not include any specific control or offers any significant benefits to decrease the health care costs, or even make health care affordable. No market mechanism exists which can encourage the health care insurance providers to offer competitive prices, or set up competition which can reduce the medical bills and provide quality facilities to patients ailing from illness, undergoing prolonged medical treatment, or who require medical services for longer durations. Lack of initiatives force the medical insurance providers to keep the premium amounts high, thereby making it difficult for citizens not qualifying for federal and state governments’ health programs to afford the medical insurance. President Obama’s initiative fails as far as medical insurance benefits are concerned.

Obama mortgage plan to help California and 4 other states

President Obama’s new steps for preventing home foreclosures through the Obama mortgage modification program and decreasing the bankruptcy filings in Nevada, which actually ranks first in foreclosures since last 37 consecutive months, fails to reduce the monthly mortgage payments as intended, and people still find it very difficult in redeeming their mortgage loans, even today. As per the policy, approximately $1.5 billion were used to bailout the banks and several credit lending institutions in other states such as Arizona, California, Florida, and Michigan. In addition, a certain percentage of the bailout fund was to be utilized for providing financial assistance to homeowners who have lost their jobs, and to individuals who do not earn enough to make their monthly mortgage payments. Obama’s plan fails to effectively address some of the fundamental mortgage related issues in some of the states.

More homeowners being rejected under Obama’s loan plan

Banks and credit lending institutes providing mortgage loans to homeowners try to make it easy for the householders to redeem their borrowed credit, however in case of consistent defaults of monthly payments; these institutes take recovery steps to get their capital back. In such circumstances, they often initiate loss mitigation to prevent the home owner from filing for bankruptcy. One of the ways to modify mortgages and support the mitigation process is to refinance the existing mortgage, and avail more favorable loan terms and reduced monthly payments so it becomes easy for the debtor in supporting the monthly mortgage repayments. Obama’s HASP plan has been specifically designed for this to happen. However, it is seen that many debtors applying for the benefits under the plan fail to qualify for the program. One of the main reasons why this happens is because the qualifying criterion is tough, and private moneylenders do not benefit significantly while providing the facility. The government is not taking the required initiative in making the qualifying rules flexible and making mortgage redemption easy. Obama mortgage plan 2010 is expected to improve upon these drawbacks, and make HASP more effective.

Forgiveness of debt on recourse mortgages is a significant issue for taxpayers going through a foreclosure or entering into a short sale. For those who are unaware, there can be challenging tax consequences.

One of the most important issues that must be resolved is determining if the mortgage was a recourse instrument or non-recourse instrument. Recourse mortgages are instruments that allow the financial institutions to hold the borrower personally liable for the debt. With a recourse mortgage, once a foreclosure has occurred and the financial institution has agreed to forgive any remaining deficiency balance, the taxpayer must address the tax impact of the debt forgiveness.

Non-recourse mortgage debt occurs when the only security for the loan is the home itself and the lender is not able to pursue the borrow for any deficiency. In this case, there is no debt forgiveness and the only issue the homeowner needs to be concerned with is calculating the gain or loss on the disposition of the property.

If your debt is recourse it does not automatically mean that you have a tax liability. Debt forgiveness is normally a taxable event. However, in many situations a taxpayer may find relief under one of the many exclusions. The exclusion that will help most homeowners is the Mortgage Forgiveness Debt Relief Act, which was enacted in 2007. In some circumstances, qualified principal residence indebtedness can be excluded from taxable income.

Make sure that you carefully analyze all your tax documents and determine the proper treatment of any debt forgiveness. Completing the tax forms can be challenging. Just make sure that you get them right the first time.

Encountering mortgage foreclosure issues with no apparent solution available up ahead? Worry not, as we have just the answer for you to allow you to keep your foreclosure trouble aside and concentrate on other important aspects of life. I am talking about mortgage refinance, the option that has been taken up by thousands prior to this with high levels of success when we speak of finding a solution to not losing your home to your creditors. Forget about filing for bankruptcy, find the company with the best mortgage refinance rates out there today, and get rid of any mortgage issues once and for all!

When we speak of the best rates for mortgage refinancing packages, what does that actually mean? Well, most think that as long as you find the deal that offers the best interest rates (which means the lowest interest rates), you have for yourself the finest deal out there! Wrong! You have to not only look at the interest rates offered, but also a combination of other terms and conditions that would determine how good the deal really is in reality. Flexibility of the plan is one important factor, it is always good to have deals that are more flexible, and do not charge exorbitant late payment charges just because your payment for the month is delayed for a day! Visiting sites such as mortgageloan.com would help, as it not only provides you with a list of lenders and banks that offer this service, but also provides you with information of how the whole process of mortgage refinancing works and how it can help you salvage your home from being auctioned off! There is also a useful tool there that you could use to compare the terms and rates between different lenders to help you decide on the best deal for yourself!

If you are wondering how you are going to find the best rates in terms of mortgage refinancing today, follow the below steps:

1) Scout around for the finest deal out there. This can be accomplished yourself by browsing the internet, or checking with family or friends that have been through home refinancing before. Their experience could be crucial to help you out. The more options you have, the better your chances are of getting the best deal out there.

2) Remember to check on all hidden costs within the agreement before you put pen to paper. Many tend to ignore this part, and end up paying large amounts for items such as late payment charges, prepayment penalties, balloon charges and other relevant payments that may be charged to you without your knowledge

3) Choose fixed-plans for interest rates instead of adjustable-plans that tend to vary in accordance to the economic situation. The fixed-option is probably the best bet for now if you appreciate stability.

Get the best package for home refinancing by following the above-mentioned tips, and rest assured that you would be devoid of foreclosure trouble in the future! Good luck!

There are many things that one comes across that need to be tackled in its early stages to avoid future problems related to any particular issue. Foreclosure is a an issue that no one can accept lying down.

There is an after bankruptcy mortgage refinance scheme that bails one out of an ugly situation, this option is very much like refinancing your loan mortgage loan before the bankruptcy phase. The idea or motive behind this whole procedure is that one can get a lower interest rate and save money as well over the time duration of an existing loan.

Sometimes it seems like all hell has broken loose when one is served with a foreclosure notice but the after bankruptcy mortgage refinance option puts one in a winning position because it helps pay lower monthly payments and money gets saved in the bargain.

Very often mortgage lenders are left with no better option but to refinance a mortgage especially post bankruptcy as there is little risk where refinancing the current loan is concerned, the simple reason being that the interest is rather low.

In order to get an after bankruptcy mortgage refinance facility you could check out the various quotes that different lenders are making as they want to do business with you, competition among them is commonplace as you will see.

You can shoot out an application online that will cause many lenders to rise up to occasion and serve your purpose; there is stiff competition among the banks. They are willing to come to your aid within twenty four hours.

One should make use of this home saving option of after bankruptcy mortgage refinance, it is vital in order to retain your home and save money as well.

This option will allow you to breathe more easily and it will relieve all the stress that surrounds foreclosure.