Lisset Franco's Blog

This $25Billion Foreclosure settlement is not a big Win for the struggling homeowner.  Nor for the homeowner that was struggling, needed help, relied on their lender and got kicked out of their home!  This is a JOKE!  Another WIN for the banks! 

So just like the many things that have happened in the past, and the very reason we have the housing crisis going on today, because of lenders and the administration looking the other way.  And now…It’s happening again!

We have 5 mayor banks engaged in deceptive practices.  Foreclosed on homes without the proper procedure, had robo-signers that confessed that they did not even review documents.  Attorneys not following the foreclosure law…putting people on the streets and money in their pockets.  Without caring if the victims were elderly, sick, single mothers, children…Regard for nothing!  So families are unjustly put on the streets and now they get a $2,000 check…WOW!  What justice?  Victims should instead get the “foreclosure” REMOVED from their credit and these lenders should be forced to put them back in a home!  That would be justice!

You see, for the most part, the $25Billion in settlement is not hard money that lenders would have to pay back.  Only $5Billion is.  $17Billion goes for banks to “help” struggling homeowners towards reducing their principal balance and another $3Billion towards refinancing borrowers who are current on their mortgage. 

Well, the $17Billion for reducing principal would be very much needed but you see the problem is that most loans just won’t qualify since most loans are owned by none other than Fannie Mae and Freddie Mac…and they are not participating in this program!  Currently, Fannie Mae and Freddie Mac hold or guarantee approximately 50% of the nation’s mortgages.  So where’s the help?

So often we’ve seen the reports that all the foreclosure prevention programs have fallen short of the goals, what makes the justice department think that these lenders will help troubled homeowners?

Ø  The Home Affordable Modification Program (HAMP) had a goal to modify 3-4 million loans with a budget of $19B.  The actual results…883,000 modifications since 2009.  That’s 22%.  78% below budget!

Ø  The FHA short refinance had a goal to help 500,000 – 1.5Million homeowners.  The actual result…334 refis.  Yes 334!!  That’s not even 1% of the budget.

Ø  The Hardest Hit Fund had a goal to help 500,000 unemployed or underemployed. The result 18,946.  That’s 3.7% of the budget. 

Ø  The HAFA which encourages short sales or deeds-in-lieu of foreclosure had a budget of 4.1Billon but around 10 million has been the actual result.

Ø  The Home Affordable Refinancing Program (HARP) had a goal to refinance 4-5 million home loans. The actual result…less than 1millon.  20% of the budget!

As you can see, all these programs have fallen short by a huge percentage.  So what makes anyone think that $20B in foreclosure settlement to help struggling homeowners are actually going to do something.  And now add on to that figure, the fact that Fannie and Freddie which own 50% of the loans are not participating in this program.  So I ask you, what does the $25Billion Foreclosure settlement really means for you??  Absolutely nothing! 
 

Do you know that this situation is making America sick!  A paper released last month by the National Bureau of Economic Research found that people living in high-foreclosure areas in New Jersey, Arizona, California and Florida were significantly more likely than those in less hard-hit neighborhoods to be hospitalized for conditions like diabetes, high blood pressure and heart failure.  The N.B.E.R. study found significantly more suicide attempts in high-foreclosure neighborhoods. For every 100 foreclosures, it found a 12 percent increase in anxiety-related emergency-room visits and hospitalizations by adults under 50. 

So I ask…Is it worth the aggregation??

Let’s proceed with our analysis.  People don’t want to ruin their credit.  They keep paying their mortgage, even if they can’t refill their medical prescriptions or can’t sleep at night.  Even worst, they exhaust their life savings, max out their credit cards and they still end up with the same situation…  They simply can’t afford the mortgage payment. 

As I mentioned before on my last blog, you need to make a business decision.  Corporations do it all the time.  Even Donald Trump for goodness sake has filed for bankruptcy repeatedly and he’s a millionaire!    But if the transaction does not make business sense, corporations cut their losses early and move on.  This is what Americans need to do with the housing crisis. 

Just sit down and analyze whether or not you can or cannot afford the mortgage payment.   Also analyze if it’s really worth modifying a note that you will still owe an amount that will take years to regain its value and if 3 years from now you want to move, oops you can’t sell it at the amount you owe! 

The solution…A short Sale! 

You might be asking yourself: “Well I don’t want to lose my house”    But you know deep down that I make sense.  You know that your home has devalued so much that you owe so much more than the house that just sold next door for half of what you owe.  In addition to the fact that  you are already behind on your mortgage payment…Then what are you waiting for? 

A short sale will give you protection against Tax liabilities, under the Mortgage Debt Relief Act (MDRA).  This is extremely important, since it protects the homeowner from having the “forgiven” debt of a short sale, from being taxed.  This by the way will expire at the end of this year, 2012.  Also under a HAFA short sale, or many traditional short sales, lenders are not seeking deficiency judgments as opposed to a foreclosure! 

Besides above benefits, homeowners can be back to being home buyers in as little as 18months.  Imagine that! 

So remember, it’s not worth getting sick over.  Not worth getting an anxiety attack.  Not worth a suicide attempt.  Not worth getting high blood pressure.  Not worth not being able to sleep at night.  Not worth exhausting all of your savings.  Not worth maxed out credit cards.  Not worth ruining your credit with a foreclosure for the next 7 years.  Not worth getting served with a deficiency judgment and definitely not worth getting a huge Tax Bill!   As I said… IT’S JUST A HOUSE!  

Hi my name is Lisset Franco and I’m a Certified Default Advocate here to help and inform you of your options.  This is at NO COST to You.   One very important thing to remember: Time is of the essence, so sit and take serious thought of your situation and take quick action in order to allow yourself enough time to complete the chosen process.

 You have a right to know ALL your OPTIONS! 

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction.  Loan applications generally ask if the applicant has ever been foreclosed upon.  Credit reports also disclose this damaging information. Not the best option.  By far, the worst option available to you! Many people feel "I have no equity, let the bank take it", but homes that are sold on the courthouse steps typically sell between 50% and 70% of their fair market value. Moreover, if a bank suffers a loss due to the pending foreclosure action against you, they also have an option. They can file a deficiency judgment against you and pursue you for the amount of their loss. 

2. Payoff/ Reinstatement – Completely paying off the entire loan amount plus any default amount, attorney fees, late fees, taxes, missed payments and fees. 

3. Refinance – You may be able to refinance and take advantage of today’s low interest rates.  In today’s housing market, many homeowners are experiencing fallen home values.  Get help with many programs that might help you.  Programs such as:

HARP (Home Affordable Refinance Program)

FHA Short Refi (FHA Refinance for Borrowers with negative Equity)

FHA2LP (Treasury/FHA second lien Program)

PRA (Principal Reduction alternative)

HHF (Hardest Hit fund) 

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan.  This may allow the homeowner to catch up at a more affordable level.  To qualify, you must prove to the lender you have fixed the problem that caused the late payment. 

HAMP reduces a homeowner’s mortgage payment to 31% of gross income to make payments more affordable.  

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation.  The lender may even be able to provide a temporary payment reduction or suspension of payments.  Information will be required from the homeowners to show that you are able to meet the new payment plan requirements. 

6. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing.  Banks generally require the home be well maintained, all mortgage payment and taxes must be current.  Most loan applications ask if this has ever happened. 

7. Bankruptcy – This option can liquidate debt and/or allow more time.  I can refer you to a qualified bankruptcy attorney.

     --Chapter 7 (Liquidation) To completely settle personal debt.

     --Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.

     --Chapter 11 (Business Reorganization) A business debt solution.

Over the years, I’ve spoken with many individuals who filed for bankruptcy protection only to have their cases dismissed. Not only were they out their attorney’s fees (usually $2,000 - $3,000) but now had a bankruptcy and a foreclosure on their credit report. Bankruptcy is considered an action of last resort.  

8. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale.  In this case, the homeowner will get cash from the sale.  On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.

 9.  Short Sale – HAFA or Traditional short sale.  Some homeowners can no longer afford their home and have tried to modify their payment but they simply can’t afford the modified amount.  The HAFA program offers homeowners incentives for a short sale or deed-in-lieu of foreclosure.  In a short sale, the bank will allow you to list and sell your property for the market price, even if it’s less than what’s owed.  Under the HAFA a homeowner can receive $3,000 to help with relocation costs. 

As you can see you do have options.   If you need help, please get someone  that knows to help you.  Call your lender, they will help you!    If you want to talk to me  please feel free to call me.  Remember all my services are FREE of Charge to you!  So don't let anyone charge you for this!  

Lisset Franco, CDAT (Certified Default Advocacy Trained

Sand Castle Realty Group, Inc.
(239) 280-7484
Lissetfranco@yahoo.com