Countdown until you owe the IRS

So what are other homeowners doing? Many homeowners that are considering a short sale or a loan modification have decided that instead of waiting for the market to come back they are opting to sell their house now and get out while the getting is good!  If you owe more than your house is worth, it will take years to break even. If you decide to sell your house BEFORE you break even, there will be debt that is settled by the lender. Pursuit of a short sale AFTER this deadline expires will be subject to additional tax liability.

"How's that Loan Mod Going?"  More Than 520,000 Trial Loan Modifications Cancelled

Over 520,000 trial loan modifications have been cancelled, including the 90,000 this month of June 2010. Only 364,000 borrowers remain in active trial modifications.

More than 40 percent of the trial loan modifications started under HAMP, Home Affordable Modification Program, were cancelled as of the end of last month, but permanent modifications totaled nearly 400,000, according to the latest Treasury report.

Of the 1,282,912 trials started, 520,814 have been cancelled, 364,077 are active, 389,198 are permanent, and the remaining 8,823 were permanent but subsequently cancelled.

The most common causes of trial cancellations included missing documentation, trial plan default, and ineligibility due to debt-to-income ratios already being below 31 percent.

Most who were cancelled were put in an alternative modification.

Bank of America now leads all servicers with 72,232 permanent modifications, followed by Chase with 54,722 and Wells Fargo with 44,628.

However, smaller loan servicers have been converting a larger share of their eligible 60+ day delinquent borrowers, thanks in part to the use of verified documentation.

Performance of Permanent Modifications

Delinquency data included in the latest report revealed that 4.1 percent of the 126,527 loan modifications made permanent in the first quarter of 2010 were already 60+ days late.

Another 1.3 percent are 90+ days late.

The numbers are 5.4 percent and 1.5 percent for modifications completed in the fourth quarter of 2009, and 10.5 percent and 4.4 percent for the third quarter of 2009, respectively.

While it's too early to really tell, the re-default numbers look lower than those tied to other modification programs.

truthaboutmortgage.com

Coming to a neigborhood near you soon "loan-modification scams"-Forensic Loan Auditing is a Scam

"Forensic loan audits are yet another phony foreclosure-relief service hawked by loan-modification consultants

Los Angeles Attorney General Edmund G. Brown Jr. warned Californians today to avoid "forensic loan audits," referring to them as the latest "phony foreclosure-relief service."

Across the country, homeowners are paying upfront fees for a review of their lender's practices, only to be provided nothing in the way of foreclosure prevention. The service essentially audits a borrower's loan file to determine if the original lender complied with state and federal mortgage lending laws. If flaws are found, homeowners are told they can use them against the bank to speed up a loan modification or gain leverage to set up some kind of deal.

Ironically enough, some of these loan auditors may have been the same loan originators that broke the rules in the first place.

"Forensic loan audits are yet another phony foreclosure-relief service hawked by loan-modification consultants trying to cash in on the desperation of homeowners facing foreclosure," Brown said in a release. "The foreclosure-relief industry continues to be long on promises, but short on results."

Brown has sought court orders to shut down more than 30 fraudulent foreclosure relief companies, resulting in criminal charges and prison sentences for dozens of consultants.

Last year, the California Department of Real Estate (DRE) investigated more than 2,000 complaints involving loan-modification scams, with nearly 350 individuals and companies receiving a Desist and Refrain Order to stop illegal activity. Upfront fees on loan modifications, which are already illegal in California, are set to be banned nationwide, according to a proposed rule by the FTC.

Never, ever pay any Money to anybody for any type of mortgage relief, loan modification, foreclosure prevention.  Please fill out the form below and we will be more than happy to work on your behalf and verify that the program you are considering is valid or not.

photo credit: Canadian Pacific

It's been a year since five of our country's largest banking institutions negotiated a settlement "with state and federal officials over claims of vast foreclosure abuses." Today, those banks take credit for "giving more than half a million struggling homeowners roughly $45.8 billion in relief." But there are thousands of Americans who are still losing their homes to foreclosure. Only 13 percent (under 71,000) of the totall borrowers helped thus far "received assistance on their primary mortgage, which has been the main source of defaults and foreclosures through the housing crisis." But over 170,000 borrowers have received help with their second mortgage which is usually a home equity line of credit or HELOC against which a homeowner can borrow money.

It does little good to help a borrower out with a second mortgage when it's typically the first mortgage that presents the biggest problem. Perhaps the most chilling part of this story is the fact that banks are getting "credit for restructuring loans or wiping out debt under the settlement." Elizabeth M. Lynch, an attorney at MFY Legal Services in New York explained, "The second mortgage forgiveness is basically a loophole, which allows the banks to continue foreclosures unabated."

Read the complete article.

photo credit: Tom Hoyle

Since it began in 2006, the Colorado Foreclosure Hotline has logged more than 165,000 phone calls. Earlier today, Colorado's Attorney General, John Suthers, said that the hotline's work is more important than ever if we want to continue lowering the foreclosure rate in our state. Suthers proudly reported that four out of five borrowers who met with a counselor from the hotline last year were able to avoid foreclosure. He explained, "At the start of the New Year, Coloradans are beginning to feel a sense of hope about our economy for the first time in quite a while, and a big reason for that is a rebounding housing market." He stressed that the amount of people who end up in the foreclosure process is currently half of what it was in early 2009. Add that fact to the growth of new-home construction and increased housing sales, "the housing market has momentum not seen in years." 

Read the complete article.