Nevada Foreclosure Laws (Part 4)


Summary of NV Foreclosure Laws
If you are a residential homeowner who is or may be facing foreclosure in Nevada, this article will give you the summary and all information you will need to know. This article will help you answer the following questions:
• What is the foreclosure process in Nevada?
• What rights do you have to cure or reinstate your mortgage?
• Are there any state law protections for homeowners in financial distress?

How to Locate Nevada’s Foreclosure Laws
The citation to Nevada’s foreclosure law is Nevada Revised Statutes Sections 40.430 to 40.463 and 107.080 to 107.110. Judicial foreclosures are covered in Sections 40.430 to 40.463, and nonjudicial foreclosures are covered in Sections 107.080 and 107.110.

Nevada’s foreclosure statutes can be found in “Chapter 40: Actions and Proceedings in Particular Cases Concerning Property.”
• Scroll down to find Sections 40.430 to 40.450, which are listed under the heading “Actions for Foreclosure of Real Mortgages,” and Sections 40.451 to 40.463, which are listed under the heading “Foreclosure Sales and Deficiency Judgments.”

To find Sections 107.080 to 107.110, follow steps one through three above, click “Chapter 107: Deeds of Trust,” then scroll down to the sections listed under the heading “Default and Sale.”

Summary of Nevada’s Foreclosure Laws
A summary of the most important information in Nevada’s foreclosure laws relevant to residential homeowners is presented below. Because nonjudicial foreclosures are the most common type of foreclosure in Nevada, this information focuses on nonjudicial foreclosures. “Mortgage lender” refers to the bank or financial institution holding the mortgage, and “borrower” refers to the residential homeowner.

Nonjudicial Foreclosure
A mortgage lender does not need to sue the borrower in court to foreclose. Once a borrower has defaulted on his or her mortgage, the lender has the right to sell the property securing the mortgage, subject to certain requirements. Nev. Rev. Stat. § 107.080.

Borrower’s Right to Cure
A homeowner has up to five days prior to the date of the foreclosure sale to prevent the foreclosure sale by making any missed payments on the mortgage or by curing any other deficiency, as well as paying for the mortgage lender’s foreclosure fees or expenses. Nev. Rev. Stat. § 107.080.

Notice Requirements
The mortgage lender must file a notice of breach and election to sell with the office of the recorder in the county where the property is located. This notice must be recorded at least three months before the date of the foreclosure sale. Nev. Rev. Stat. § 107.080. After this three-month period expires, the mortgage lender must file the notice of sale with the county recorder, as well as deliver the notice of sale to the borrower by registered or certified mail, post the notice for 20 days in three public places, and publish in a newspaper a copy of the notice once a week for three consecutive weeks. Nev. Rev. Stat. § 107.080.

Along with the notice of default and election to sell, the mortgage lender must provide the borrower the following information:
• Contact information for the person authorized to negotiate a loan modification on behalf of the lender
• Contact information for at least one local housing counseling agency; and
• A form on which the borrower may elect mediation. Nev. Rev. Stat. § 107.086.

Mediation
The mortgage lender is required to notify the borrower of the availability of mediation. If the homeowner requests mediation, the lender may not take further action to foreclose on the property. Nev. Rev. Stat. § 107.086. If your goal is to delay foreclosure as long as possible, it is in your best interest to elect mediation.

Right of Redemption
In nonjudicial foreclosures, homeowners do not have a right of redemption. Nev. Rev. Stat. § 107.080(5).

Nevada Foreclosure, Deficiency Laws and Statutory Time Period


What is the role of the recourse loan?
A loan is termed recourse if the borrower is personally liable for its repayment and nonrecourse if he is not. After a foreclosure, a lender can go after a recourse loan borrower for the difference between the market value of the home at sale and the outstanding loan balance by suing for a deficiency judgment. It is barred from going after a nonrecourse loan borrower. State law often affects the classification of a loan as recourse or nonrecourse. In Nevada, any mortgage taken out to purchase a property is considered nonrecourse. Any refinanced loan or loan taken out after the purchase is recourse. Many, but not all, second mortgages are recourse.

Nevada’s One-Action Rule
Under Nevada rules, if a foreclosing lender wants to collect a deficiency judgment, it must use the judicial foreclosure process because state law limits it to one action against the borrower. A deficiency judgment may be wrapped into a judicial foreclosure but not with a non-judicial foreclosure. If the foreclosing lender owns both the first and second mortgages, then it must use the judicial foreclosure process to collect any remaining debt associated with either the first or first or second mortgages.

Lien Wiped Out But Not Debt
If the lenders of the first and second mortgages of a Nevada mortgage are different, the first mortgage holder will foreclose and the second will not. The second mortgage is wiped out as a lien in the foreclosure. However, the underlying debt and agreement between the borrower and lender remains if the mortgage was a recourse debt. Because the second mortgage holder did not participate in the foreclosure, it is still allowed its “one action” against the borrower to recover the debt. The second mortgage holder is able to file a lawsuit against the borrower for his failure to repay the debt. This is an action unrelated to foreclosure.

A second mortgage is a loan that was obtained after another mortgage loan secured by the same property. The general purpose of providing mortgage security on a loan is to give the lender the right to foreclose if the borrower stops making payments. The problem with second mortgages is that the foreclosure rights under a second mortgage are inferior to the foreclosure rights of the first mortgage loan. Foreclosure on a first mortgage loan may eliminate the second mortgage loan.

Notice
The first mortgage lender and second mortgage lender each has a mortgage lien on the same piece of property. When a mortgage lender forecloses, the lender has to involve all parties holding an ownership or lien interest in that property. Therefore, if the first mortgage lender initiates foreclosure on the property, it must involve the second mortgage lender in that foreclosure process. In judicial foreclosure, this means the second lender must be a party to the foreclosure lawsuit, while in nonjudicial, or power of sale, foreclosure, this means the foreclosing lender has to provide notice to the second lender.

Lien Elimination
When a mortgage lender forecloses, the lender causes the secured property to be sold at a public auction. The purchaser at the auction acquires whatever right the foreclosing lender had in the property at the time when the mortgage loan first attached to the property. By definition, a second mortgage lien does not attach to the property until after the first mortgage lien has attached to that property. Accordingly, foreclosure on a first mortgage loan results in the discharge and elimination of the second mortgage lender’s lien on the property.

Right to Proceeds
A foreclosure sale produces sales proceeds that can be used to pay off liens on the property sold. In some foreclosures, the sales price may be high enough to pay off the first mortgage lien, but not any other liens in the property. In fact, most foreclosure sales result in the mortgage lender making a credit bid equal to the amount due on the mortgage loan, which means the sales price is exactly equal to the payoff balance on the first mortgage. As a result, there is no extra money to pay off the second mortgage lender, so the second mortgage lender remains unpaid and loses its lien on the property. But, if the sales price is high enough, there may be enough money to pay off the first mortgage plus some or all of the second mortgage.

Lien Protection
A second mortgage lender’s only option to protect its lien on the property is to pay off the first mortgage before the foreclosure sale. The second mortgage lender has the right to pay the first mortgage lender the total balance due on the first mortgage loan. If that happens, the first mortgage lien is paid off, thereby causing the second mortgage lien to move into the position of first mortgage lien. However, this option requires the second mortgage lender to come up with the cash necessary to pay off the first mortgage.

Nevada Laws About Foreclosure, Deficiency and Statutory Time Period (Part 3)


Should you buy trust deed property sale?
What is First Lien?
Let us say that if you purchase a property at a foreclosure sale on a second trust deed, this means you will purchase the property subject to an existing first lien on the property. That lien will remain on the property after you become the owner following the foreclosure sale. Foreclosure on a lien results in the elimination of any junior liens, but not any senior liens, and a first deed of trust lien is senior to the second deed of trust lien.

Title Review
You should always review the title of the property so you should know the quality and health of your title as this would save you from many problems and of course any potential litigation and headache. You have to determine the quality of the lien and its standing, if it is first line or second or third because your rights would depend upon this standard. In other words, if it were superior lien, or junior lien, the procedure would be different. It is good to go through an escrow company who can vouch for a title, and find out about the liens on the title. Only once you get the assurance, then you go ahead.

First Lien Payoff
The easiest way to clear title to property after a foreclosure on a secondary lien is to simply pay off the first lien on the property. You can always negotiate this with the lender, but it is appropriate to find it first how much flexibility they have, because once you buy second trust deed, your hands are tied, and you cannot bargain much. The owner of the property always has the right to pay off liens on the property. You can contact the first deed lender and request a payoff balance. If you can come up with the cash, you can pay off the first mortgage and have the lien removed from the property. Paying cash, of course, is the best way, as cash is king, but cash is also limited and unavailable in many situations.

Nevada Laws About Foreclosure (Part 2)


What is the procedure in judicial foreclosure:
The judge will issue an order that clarifies the condition of title. It may remove all the clouds on this title, or leave some open. A lawsuit may be helpful, or even necessary, in order to clear the title after foreclosure on a second trust deed. Payment may also be required.

In a judicial foreclosure, the lender file a lawsuit in a Court and file or should have filed a lis pendens against the property and, if the borrower loses the lawsuit, the Court enters a judgment on the debt and orders it executed against the secured property through a foreclosure sale. A lis pendens should always be filed, as this is a simple work and our law office can help in filing any such lis pendens and also how to remove it. This is a convenient tool in a jurisdiction which is called notice jurisdiction. The property is then sold as part of a publicly noticed sale by the Sheriff or Constable as noted above. After a judicial sale, the borrower has one year (12 months) after the foreclosure sale to redeem the property; that is to say, the borrower (or assignee of the borrower) has one year to come back and pay the price paid by the purchaser at the foreclosure sale (plus interest and some statutory processing fees) and the borrower (or assignee) will get the property back. This is intended to discourage buyers from underbidding the property, as if they do, the borrower (or assignee or even a minority lien holder) can get it back for the same price.

Can you file Quiet Title Action in Nevada?
Another option for attempting to clear the title to your property is to file a quiet title lawsuit in Nevada state court. A quiet title lawsuit results in the issuance of a judicial order clarifying all interests in, or claims to, the property. When you file the lawsuit, you will have to serve a summons on the first mortgage lender. If the first mortgage lender does not appear in the lawsuit, that lender’s lien on the property can be removed in the quiet title judgment. Most likely, however, the first mortgage lender will appear in the lawsuit in order to protect its valuable lien right. If they show up, you can negotiate to a handsome deal. In fact, even if they show the intent, making a handsome offer can get you a better deal. Therefore, a quiet title action may be a futile effort. It is impossible to predict what a mortgage lender will do in a quiet title suit.


Nevada laws About Foreclosures (Part 1):
Nevada state law allows mortgage lenders to foreclose on a deed of trust without ever appearing in court. Before we have a solid understanding of the issues involved, it is good to understand the basic definitions here.

Non-Judicial Foreclosure: First, let us define and understand the difference between a judicial and non-judicial foreclosure. A non-judicial foreclosure is done outside the jurisdiction of the court, and with the authority inherent in the trust deed. It has also its limitation where it does not solve all the problems and leaves some unresolved issues. The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust.

A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.

What is the Power of Sale Clause: This power of sale exists and many times inherent in the trust deeds to the lender to sell the property and executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”. Nevada has statutorily required language to be included in all deeds of trust (Nevada Revised statutes Chapter 107.030).

Private Trustee and No Intervention from the Court: If the deed of trust or mortgage contains a power of sale clause then the property may be sold by a private trustee without the intervention or use of a Court. If the instrument sets out how the sale is to be conducted that needs to be followed. However, if no procedure is outlined, then the following procedure should be adhered.

- A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower, at their last known address, on the date the notice is recorded in the county where the property is located.
– Any additional postings and advertisements must be done in the same manner as for an execution sale in Nevada.
– Beginning on the day after the notice of default and election was recorded with the county and mailed to the borrower, the borrower has 15 days if the date of the original deed of trust was on or after July 1, 1949, and before July 1, 1957 and 35 days if the original deed of trust was on or after July 1, 1957, to cure the default by paying the delinquent amount on the loan.
– The owner of the property may stop the foreclosure proceedings by filing an “Intent to Cure” with the Public Trustee’s office at least 15 days prior to the foreclosure sale and then paying the necessary amount (usually being the total of missed payments and statutory fees and costs) to bring the loan current by noon the day before the foreclosure sale is scheduled.
– The foreclosure sale itself will be held at the place, the time and on the date stated in the notice of default and election and must be conducted in the same manner as for an execution sale of real property. In a trustee’s sale, there is no right of redemption AFTER the sale.

If the non-judicial trustee’s sale netted insufficient money from the sale price to pay the debt, then the lender has three 6 months after the sale to sue the borrower for the shortfall to seek a “deficiency judgment.”

Conclusion

As we all know, Nevada is a non-judicial foreclosure state in which lenders are hampered somewhat in collecting against debts remaining after foreclosure. First, the time period is limited to six months. Second, it is expensive to file lawsuit. Third, the lenders already suffered because the homeowners did not pay them for many months, and in some cases years. Fourth, they had destroyed the property and it would be expensive and time consuming to fix it. Fifth, no prediction can be made if the lenders would get some money because the homeowners can always file bankruptcy. Sixth, even if the lenders win the lawsuit, it is difficult to execute the judgment because finding the assets of the homeowners is very difficult and time consuming. The loophole lenders of second deeds of trust use, however, allows them to stand on the sidelines during the foreclosure and collect on the debt later.

Can the Debt Collectors Directly Garnish Your Wages?


This is what the debt collectors continuously tell the debtors that they can directly garnish their wages. It is a pure lie, and this threat is actionable under the FDCPA. In Nevada,  in order for a creditor to obtain a writ of garnishment against your employer to withhold money from your paycheck, that creditor must have a judgment against you. In order to have a judgment against you, that creditor must have filed a lawsuit against you and won either after a trial or by default, that is, because you did not file a response. A default judgment or regular judgment needs to be executed which means the judgment holder needs to find the assets, the payroll master, and do other steps to find assets, and than file an execution of judgment. This execution of judgment is a legal process which again needs permission and authority from the court. This, of course, is a complicated process, and the debt collectors threatening can’t do all these steps in single day. Also, all these steps requires the help of an attorney and the debt collectors yelling and screaming at you, is not an attorney. If he poses as such, he would be violating the FDCPA again.

Normally when this threat is being made, a lawsuit has yet to be filed. How do you know if you have been sued? First, if suit has been filed against you, you should have been served with a Summons and Complaint by either the sheriff’s department of your county or by certified mail. However, if you cannot be found by the creditor, the creditor may have you served by publication, that is, by running a notice in the newspaper in the county of your last known address. If you are still unsure, you may call the clerk of court of your county.

What if I have been sued? See a lawyer immediately. Try not to be your own attorney. Afterall, this is a complex situation, and we had seen many people lose on simply and basic technical grounds. Please do not play with fire. This could be very prejudicial to lots of your interests.

What if I already have a judgment and/or garnishment against me? If you already have a judgment and/or garnishment against you, I would again suggest you see an attorney immediately. You may be able to have the judgment set aside or appealed, but only if you act very quickly. This may also be a good time to take a strong and hard look at bankruptcy. With a bankruptcy you should be able to discharge the judgment prior to garnishment and stop any garnishment that is already in place. Upon filing a bankruptcy, you may even be able to have a portion of any money garnished from your check returned to you. But this has to be done very quickly. Our law office (Law Office of Malik Ahmad) has gotten many such garnished checks restored to our debtors, and they always says thank you because this money and them had already parted. It is of course a good advantage to hire a reputable and experienced law firm like us. So, if you have any such problem, please do not hesitate to call our at (702) 270-9100

Can the Debt Collectors Directly Garnish Your Wages?


This is what the debt collectors continuously tell the debtors that they can directly garnish their wages. It is a pure lie, and this threat is actionable under the FDCPA. In Nevada,  in order for a creditor to obtain a writ of garnishment against your employer to withhold money from your paycheck, that creditor must have a judgment against you. In order to have a judgment against you, that creditor must have filed a lawsuit against you and won either after a trial or by default, that is, because you did not file a response. A default judgment or regular judgment needs to be executed which means the judgment holder needs to find the assets, the payroll master, and do other steps to find assets, and than file an execution of judgment. This execution of judgment is a legal process which again needs permission and authority from the court. This, of course, is a complicated process, and the debt collectors threatening can’t do all these steps in single day. Also, all these steps requires the help of an attorney and the debt collectors yelling and screaming at you, is not an attorney. If he poses as such, he would be violating the FDCPA again.

Normally when this threat is being made, a lawsuit has yet to be filed. How do you know if you have been sued? First, if suit has been filed against you, you should have been served with a Summons and Complaint by either the sheriff’s department of your county or by certified mail. However, if you cannot be found by the creditor, the creditor may have you served by publication, that is, by running a notice in the newspaper in the county of your last known address. If you are still unsure, you may call the clerk of court of your county.

What if I have been sued? See a lawyer immediately. Try not to be your own attorney. Afterall, this is a complex situation, and we had seen many people lose on simply and basic technical grounds. Please do not play with fire. This could be very prejudicial to lots of your interests.

What if I already have a judgment and/or garnishment against me? If you already have a judgment and/or garnishment against you, I would again suggest you see an attorney immediately. You may be able to have the judgment set aside or appealed, but only if you act very quickly. This may also be a good time to take a strong and hard look at bankruptcy. With a bankruptcy you should be able to discharge the judgment prior to garnishment and stop any garnishment that is already in place. Upon filing a bankruptcy, you may even be able to have a portion of any money garnished from your check returned to you. But this has to be done very quickly. Our law office (Law Office of Malik Ahmad) has gotten many such garnished checks restored to our debtors, and they always says thank you because this money and them had already parted. It is of course a good advantage to hire a reputable and experienced law firm like us. So, if you have any such problem, please do not hesitate to call our at (702) 270-9100

Inside a Foreclosure Factory


This is a very interesting article published in MSNBC which states how a production mill of a bank is working to prepare documentation for more foreclosure and how they are omitting basic rules in implementation and causing more avoidable foreclosures.
http://economywatch.msnbc.msn.com/_news/2012/04/19/11269115-inside-the-foreclosure-factory-theyre-working-overtime?lite

Bank of American and Foreclosures’ Alternatives


If a single bank is chosen which caused much hardship and destruction in home values, the credit may solely go to Bank of America. This bank has caused much anguish in homeowners and caused more avoidable foreclosures than any other institution. Despite losing billions of dollars and settling non stop many lawsuits, it still has not learnt much lesson. Now, it has announced that it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners. BOA call it “Mortgage to Lease Program”. However, this will be available to fewer than 1,000 BofA customers selected by the bank in test markets in Arizona, Nevada and New York.

- Participants will transfer their home’s title to the bank, which will then forgive the outstanding mortgage debt.
– In exchange, they will be able to lease their home for up to three years at or below the rental market rate.
– The rent will be less than the participants’ current mortgage payments and customers will not have to pay property taxes or homeowners insurance, the bank said.

Among requirements to qualify for the program:
– homeowners must have a BofA loan,
– be behind at least 60 days on payments and
– be “underwater,” owing more on their mortgages than their homes are worth.

The bank based in Charlotte, N.C., said it will at first own the homes, then sell them to investors. It seems like BOA would never learn any lesson and keep on doing same blunders again and again. BOA is forgetting that people take pride in homeownership as they can rent any time, if they liked it, and most of the present owners were former renters anyway.

What is the new mortgage deal: Would you be affected?


Of course FIVE big banks finally reached a deal with government authorities last week. It is a good deal and we should move on. Let us not continue a wild goose chase and dream of unending help.

Who are these five big banks?

-Ally Financial
-Bank of America,
-Citibank,
-JPMorgan Chase and
-Wells Fargo
How much they are willing to pay? Terms:
-a total of $5 billion in cash.
-They will also help homeowners who are underwater on their mortgages by reducing the principal on their loans by a combined $17 billion over the next three years.

How about refinancing?

Borrowers who qualify will get $3 billion in refinancing arrangements.

Improper foreclosure?

Those who were improperly foreclosed on will get a combined $1.5 billion. That probably nets out to less than $2,000 a person.

Impact?

Of course, this would have a sizable impact. Afterall, bank were not the only one to be blamed. The homeowners should accept some responsibility (if not a lion’s share) and part of the blame as well. This would rejuvenate the economy. Let the complainants suffers and naysayers should see the light of the day. Pay your mortgages folks on time. Enough is enough, let the good time roll. Everyone is suffering because few of us are not paying their mortgages regardless of the low interest. Lots of us are savings these mortgage payments. The result most of us suffering who are current on their payments and on commitments. It is a contract. Because of many non payers, the economy cannot progress. Like Ross Perot used to say, “if you don’t like the heat in the kitchen, move out”. People who do not like to pay, they would object if this is zero percent interest. Most of them are looking for free money. Yes, it is true. Produce the note was nonsense which was spread by paralegals and crooks. Most of them are languishing in jails. Initially, there was some fiasco when banks were rapidly purchases and notes were not produced. Now, they have solved this ‘storage” problem. Banks have notes, and they can produce. Most of the notes and promissory notes have run out their statutory limitations. We should learn how to be responsible again and accept where the blame lies. The banks have done their job, it is the homeowners who needed to take their part of the responsibility and help improve the economy. Stay in your homes, pays the bills, cut the chase, and be a proud homeowners.

Obama’s New Mortgage Plan–Details


A Mortgage Plan Gives Homeowners Bulk of the Benefits as announced by the Obama administration today. This deal was done with government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble.

-Under the plan, federal officials said, about $5 billion would be cash payments to states and federal authorities, $17 billion would be earmarked for homeowner relief, roughly $3 billion would go for refinancing and a final $1 billion would be paid to the Federal Housing Administration.

-If nine other major mortgage servicers join the pact, a possibility that is now under discussion with the government, the total package could rise to $30 billion.

-The ultimate benefits provided to homeowners could equal a larger sum — $45 billion in the event all 14 major servicers participate.

- The aid is to be distributed over three years, but there are incentives for banks to provide the money in the next 12 months.

-Five mortgage servicers in the agreement — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — had already set aside most of the money.

-The amounts from individual banks were linked to their share of the servicing market. The biggest, Bank of America, would provide $11.8 billion, followed by $5.4 billion from Wells Fargo, $5.3 billion from JPMorgan Chase, $2.2 billion from Citigroup and $310 million from Ally. Bank of America would contribute an additional $1 billion for F.H.A. loans.

-Another 750,000 people who lost their homes to foreclosure from January 2008 to the end of 2011 will receive checks for about $2,000.

President Obama called it a landmark settlement that would “begin to turn the page on an era of recklessness.” He said the government will continue to pursue violations of law in the packaging and selling of risky mortgages that led to the crisis. “We’re going to keep at it until we hold those who broke the law fully accountable.”

In New York State, more than 46,000 borrowers will receive some form of benefit from the settlement, including an estimated 21,000 who are expected to owe less because their principal will be reduced, according to estimates by the Department of Housing and Urban Development.

Other multimillion-dollar settlements were announced on Thursday in connection with the years-long mortgage and foreclosure crisis:

¶ A mortgage servicing subsidiary of Bank of America agreed to settle Federal Trade Commission charges that it illegally assessed more than $36 million worth of fees against struggling homeowners, in violation of an earlier settlement with the F.T.C.

- The settlement money will be doled out under a formula that gives banks varying degrees of credit for different kinds of help. As a result, banks should be motivated to help harder-hit borrowers with homes worth far less than what they owe.

About one in five Americans with mortgages are underwater, which means they owe more than their home is worth. Collectively, their negative equity is almost $700 billion. On average, these homeowners are underwater by $50,000 each.

A recent estimate from the settlement negotiations put the average aid for homeowners at $20,000.

Fed reaches 25 Billion Foreclosure Settlement: What it Means for Homeowners?


There is a good news as the Feds had reached a $25 billion foreclosure settlement unveiled which is expected to help many borrowers who are struggling to make their loan payments. However, the rules of the deal are complicated and banks have three years to meet their obligations.

The Wall Street Journal had extensively dealt in questions and answers to help borrowers figure out if they qualify for help and what to expect from the process. Following excerpts are taken from WSJ under the fair use doctrine.

Who does the settlement cover?
The settlement covers borrowers who have loans that are serviced by one of the five big banks: Ally Financial Inc./GMAC Mortgage, Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. These banks handle payments on 55% of U.S. mortgages, according to Inside Mortgage Finance.

My mortgage is with one of these banks. How do I know if I qualify for help?
It’s going to take some time to figure that out because the settlement has so many wrinkles. One group who will be excluded: borrowers from Oklahoma. They won’t be eligible for relief because the state’s attorney general opted not to join the deal.

What if my loan isn’t with one of the banks?
For now, the settlement covers only the five big banks. Government officials hope to strike a similar deal with nine additional banks.

How long is it going to take for me to get help?
Government officials advise borrowers to be patient. Over the next 30 to 60 days, settlement negotiators will pick an administrator to handle the logistics of the deal. Over the next six to nine months, the administrator, attorneys general and mortgage servicers will work to identify which borrowers get help. Servicers expect to begin reaching out to borrowers in the coming weeks, but they have three years to provide the required help.

How will I find out if I qualify?
Borrowers will get letters from their mortgage company. Each of the five servicers also has a website and a toll-free number for borrowers to get more information. Government officials are encouraging borrowers to contact their mortgage company to see if they qualify for aid.

Here are the links for each servicer:

Ally/GMAC

https://www.gmacmortgage.com/finform/hhstart.htm

800-766-4622

Bank of America

http://homeloanhelp.bankofamerica.com/en/index.html?cm_sp=CRE-Mortgage-Refi-_-Home%20Loan%20Assistance%20Q3-_-MR16000S_marketing%20strip_%20ooo-123_hp_lahUmbrella-o

877-488-7814 (Available Monday to Friday from 7 a.m. to 9 p.m. Central time, and Saturdays from 8 a.m. to 5 p.m. Central time)

Citigroup

https://www.citimortgage.com/Mortgage/displayHomeOwnerAssistance.do?page=overview

866-272-4749

J.P. Morgan Chase

https://www.chase.com/chf/mortgage/keeping-your-home

866-372-6901

Wells Fargo

https://www.wellsfargo.com/homeassist/

800-288-3212 (Available M-F 7 a.m. to 7 p.m. CST)

What are the rules for the principal reduction program?
To qualify for a principal reduction, borrowers have to clear several hurdles. For one thing, borrowers have to be behind on their payments or at “imminent risk” of default. The owner of your loan also makes a difference. Most of the principal reductions are expected to go to borrowers whose loans are owned by the banks, though some borrowers whose loans were packaged into securities may also qualify. The settlement calls for principal reductions on both first and second mortgages.

The deal doesn’t cover loans owned or backed by Fannie Mae or Freddie Mac, the government-controlled mortgage companies.

You can go to these websites to find out if you have a Fannie Mae or Freddie Mac loan:

http://www.fanniemae.com/loanlookup

http://www.freddiemac.com/mymortgage

What about the refinance program?
The refinance program applies only to loans owned by the banks. Also, borrowers have to be current on their loan payments and owe more than their home is worth.

I’ve already lost my home to foreclosure. Can I get any help?
Borrowers who were foreclosed on between 2008 and 2011 are eligible for cash payments. The amount of the payment will depend on how many people file claims, but is expected to be around $1,500 to $2,000.

How do I file a claim?
The settlement administrator will mail notices to eligible borrowers once the process is up and running. Borrowers will have to fill out a simple form, but won’t have to prove they were foreclosed on and shouldn’t have been. Borrowers who are concerned they will be hard to locate can also contact their state attorney general.

That doesn’t sound like a lot of money. Shouldn’t I get more money if I was foreclosed on and shouldn’t have been?
Government officials say they wanted to create a streamlined process that would quickly get aid to borrowers. Borrowers who think they have been wronged can still file a claim with bank regulators or pursue other options.

Obama Administration New Steps for Mortgage Relief


NY Times has reported in its 5th February edition that Obama administration is close to a landmark multibillion-dollar settlement to address foreclosure abuses, as it is is close to winning support from a crucial state that would significantly expand the breadth of the deal. The biggest remaining holdout, California, has returned to the negotiating table after a four-month absence, a change of heart that could increase the pot for mortgage relief nationwide to $25 billion from $19 billion. Also, there is much progress in refinancing homes whether the home ownership is under Fannie Mae, or Freddi Mac as long as the homeowners are current on their payment. This step would be a clossal steps as this would eliminate any loan modification under HAMP. If this is fully implemented without the usual bank’s (the Big Five) laziness, and unhelpful attitude, this alone would rejuvenate our home foreclosure situation. Not only this, it would also help our employment situation as a massive refinancing would help our mortgage, real estate, reconstruction industry along with huge banking transactions. We have been emphasizing for this for long.

“Another important potential backer, Attorney General Eric T. Schneiderman of New York, has also signaled that he sees progress on provisions that prevented him from supporting it in the past.

The potential support from California and New York comes in exchange for tightening provisions of the settlement to preserve the right to investigate past misdeeds by banks, and stepping up oversight to ensure that the financial institutions live up to the deal and distribute the money to the hardest-hit homeowners.

The settlement would require banks to provide billions of dollars in aid to homeowners who have lost their homes to foreclosure or who are still at risk, after years of failed attempts by the White House and other government officials to alter the behavior of the biggest banks.

The banks — led by the five biggest mortgage servicers, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — want to settle an investigation into abuses set off in 2010 by evidence that they foreclosed on borrowers with only a cursory examination of the relevant documents, a practice known as robo-signing. Four million families have lost their homes to foreclosure since the beginning of 2007.

Officials involved in the negotiations cautioned that broader state support could still be days away. And although the timing of any announcement is subject to last-minute maneuvering, as it stands now the deal would set aside up to $17 billion specifically to pay for principal reductions and other relief for up to one million borrowers who are behind on their payments but owe more than their houses are currently worth. The deal would also provide checks for about $2,000 to roughly 750,000 who lost homes to foreclosure.

Those figures are contingent upon the number who respond to the offer, which is likely to go to people who lost their homes between Jan. 1, 2008, and Dec. 31, 2011. In addition, said Patrick Madigan, the Iowa assistant attorney general, homeowners who participate in the settlement will still have the right to sue the banks for improper behavior in the foreclosure process.

California has been focused on measures that would benefit individual homeowners, while New York h

The backers of the latest deal insist their plan has more teeth, with a powerful outside monitor to oversee enforcement and heavy monetary penalties if banks fail to live up to commitments. While the past agreement with Countrywide gave banks credit even if their offers to modify the interest rate of the mortgage or write down principal were not accepted by borrowers, this deal counts only what banks actually do for homeowners.

If banks fall short of the multibillion-dollar benchmarks set out for principal reduction and other benefits for homeowners, they will have to pay the difference plus a penalty of up to 40 percent directly to the federal government, according to Mr. Madigan.

The depressed housing market continues to pose a drag on the halting economic recovery. RealtyTrac, which analyzes housing data, predicts two million more foreclosures over the next two years. Some 11 million families owe more on their houses than they are worth.

The settlement, if all states participate, will also include $3 billion to lower the rates of mortgage holders who are current. Banks will get more credit for reducing principal owed and helping families keep their homes, and less for short sales or taking losses on loans that were likely to go bad, like those that were severely delinquent.”

At this time, everything is in doldrums, and nothing can be said with certainty if this plan would reduce the foreclosure or it would just be a plan without any impact on this unending crisis.