4/28/10 through 4/30/10 NASSAU COLISEUM - MORTGAGE MODIFICATIONS - Bank Open House

     There is an open house at the Nassau Coliseum this Wednesday, Thursday & Friday, 4/28-4/30/10 from 1PM to 7:30PM  where  most major lenders will be available to discuss mortgage modifications. There was an article in Newsday, last Friday April 23, 2010, "EVENT OFFERS HELP TO HARD-PRESSED HOMEOWNERS" by Ellen Yan which states:

     "Next week, the Nassau Coliseum will host a marathon - three days of face-to-face negotiations between lenders and distressed homeowners.   Borrowers can try to make on-the-spot loan modifications with their mortgage holders...."

    All mortgagees are invited to come, bring all their records, bills, proof of income (two most recent pay stubs), last two mortgage payment statements, layoff notices, credit card bills, utility bills etc. and try to work out modifications.

Foreclosure Protections for All - The New York Times - By BOB TEDESCHI

Dear Readers:  This is such a good summary of what is happening right now - including some terrific weblinks, that I am respectfully posting here Mr. Tedeschi's article from the Times, published November 29, 2009, in its entirety.  As you know, I am a foreclosure mediator for New Jersey and I encourage the use of foreclosure mediators in New York BUT we need some "teeth" put into the process to achieve results.  I lobbied to extend the protection to cooperative home owners and the new legislation incorporates these home owners who were left out previously - Bravo!

 

Last year, a new law was put into place in New York to help protect subprime mortgage borrowers from foreclosure. Now the state is on the verge of extending similar protections to prime borrowers, too.
A bill passed by the State Legislature this month would require, among other things, that lenders give all borrowers 90 days’ warning before starting foreclosure proceedings and that they take part in settlement conferences with borrowers before proceeding with a foreclosure action. The bill also covers co-op owners.
Gov. David A. Paterson is expected to sign the legislation; most of the measures would then take effect within two months.

Richard J. Biondi, the immediate past president of the New York Association of Mortgage Brokers, said the new legislation was welcome, if a bit overdue. “It’s terrific that they finally opened the door to prime borrowers and made these protections available,” he said.

Richard H. Neiman, the superintendent of the New York State Banking Department, said that given the recent deadlock in the Legislature, he was pleased by the speed with which the bill was passed.
Of the nearly 20 measures in the legislation, mandatory mediation could provide the most relief for struggling borrowers, some of whom have been unable to get their lenders to consider loan modifications. Because of the high volume of mortgage defaults, many lenders have been unable to keep pace with such inquiries from borrowers.

The foreclosure mediation, free for homeowners, would require lenders to provide a representative at a certain date and place. Lenders may be subject to sanctions if they fail to come with financial documents and other information required by mediators.

New York’s mediation program for subprime borrowers has had only limited success, its administrators say, in large part because borrowers often do not attend the sessions.

Under the new legislation, when lenders notify the state of an impending foreclosure action, the state must send the borrower’s name to housing counseling agencies, which can then inform the borrower about foreclosure avoidance strategies like the mediation program.

The new measures relating to co-ops, meanwhile, highlight the difficulties faced by those who fail to make their monthly maintenance payments, which go toward building expenses and the building’s underlying mortgage.
Co-op units do not fit the legal definition of real property, and therefore do not qualify for the protections of traditional foreclosure processes. As a result, Mr. Neiman said, co-op owners can often be forced to evacuate a unit within two months of the time their building’s board takes formal action against a nonpaying resident. Now that the new law gives occupants 90 days before they lose their ownership shares, he said, owners will have more time to seek help.

The legislation also includes protections for tenants of multifamily housing units that go into foreclosure.
Jane Azia, the director of nondepository institutions and consumer protection for the State Banking Department, says that because New York’s housing market includes a heavy mix of multifamily units, the protections for tenants are especially meaningful. By law, she said, a lender can evict tenants only after a foreclosure judgment, which typically takes about 15 months in the state.

“There are tenants out there who are harassed into leaving after the foreclosure process begins,” Ms. Azia said, “and they aren’t aware of their rights.”

The new law would give tenants more time to get out, but Mr. Biondi of the New York Mortgage Brokers Association said this measure could further damage the financial health of lenders.

“Tenants will probably just stop making payments,” he said. “And for lenders, getting any sort of legal enforcement against that will probably be difficult in the current environment.”

Mortgage Program Gathers Steam After Slow Start - The Wall Street Journal, Wednesday, November 11, 2009

Some excerpts:

"Whether the program will ultimately be judged a success will depend upon how many trial modifications become permanent."

"The administration won't release figures on completed modifcations until December, but so far it appears that very few trial modifications are becoming permanent, often because of lack of documentation."

"'It's a fiasco in the making,' said Alan White, an assistant professor at Valparaiso University in Indiana, citing preliminary information about low numbers of permanent modifications and complaints from attorneys and housing counselors. "The good news is you've gotten all these homeowners in from the cold and on these temporary modifications," Mr White said. "The bad news is we are stumbling in getting all these people ... all the way" to keeping their homes.

"At Morgan Stanley's Saxon Mortgage Services, about 26,000 to 39,000 borrowers in the program have made more than three trial payments. Roughly 500 have received completed modifications." "'It's hard to get the documents in,' said Saxon Chief Executive Anthonly Meola ..."
"The Treasury department last month gave borrowers who have made three trial payments sixty additional days to hand in their paperwork and relaxed some documentation requirements."

"Freddie Mac, the government-controlled mortgage company, recently hired Titanium Solutions Inc. to go door-to-door gathering needed documents. 'Most of our borrowers got into the loan with assistance' and need similar help with the modification process, said Freddie Mac Senior Vice President Ingrid Beckles."

"Susan Cook, a real-estate broker who works as a home-retention consultant for Titanium said borrowers often report that they have sent in their paperwork 'two or three times.' But there is always some little piece that is probably missing.' she said."

In today’s Wall Street Journal, http://online.wsj.com/home-page there is a superb article by Nick Timiraos titled, “Mortgage-Assistance Program Offers Disparate Treatment Depending on Goals and Circumstances”.

With respect to the full article, I am excerpting a small section of it because it details important components of the program. Mr. Timiraos writes:
….
The program has two main components. One provision will allow diligent borrowers who are current on their mortgage payments but have little or no equity in their homes to refinance their first mortgage to take advantage of current interest rates, which have fallen to near record lows. That is designed to allow responsible borrowers -- mainly those who have been hurt by falling home prices -- to benefit from the current climate. Lenders won't refinance borrowers who don't have equity in their homes.

The second component involves modifying mortgage loans to lower monthly payments to 31% of the borrowers' gross monthly income, mainly by reducing the interest rate on the loan. This effort would target borrowers who are falling behind on their mortgage payments or who are in danger of falling behind. The government will provide financial incentives to lenders and mortgage servicing companies to encourage them to offer the reduced payment plans, which last for five years.

But as with any broad effort, homeowners are treated unevenly in the programs. The refinance provision is open only to borrowers who have loans that are owned by Fannie Mae or Freddie Mac. That excludes large numbers of borrowers with subprime and other exotic mortgages sold to investors; and borrowers with so-called "jumbo" loans that are too large for government backing. Those groups will be eligible for the modification part of the plan, but only for loans up to $729,750.

Borrowers who owe more than 105% of the current value of their home also won't be eligible for refinancing. That means that fewer borrowers in the nation's most over-heated housing markets, including California and Florida, and in some of the most depressed market in the Midwest can take advantage of the program. "Most of the people we serve are too far underwater to take advantage of this," says Dan Elsea, a mortgage broker in Detroit.

Nationally, 25% of mortgage holders have conforming loans that are within the 80% to 105% loan-to-value ratio needed to qualify for the program, according to real estate Web site Zillow.com. But that number falls in certain high-cost housing markets that have seen big price declines. In Los Angeles, for example, just 9% of mortgage holders are eligible to refinance, while 8% of conforming borrowers are too far underwater, according to Zillow.com.
….