The cram-down measure, which was introduced by Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, would allow bankruptcy courts to extend repayment periods, reduce interest rates and fees and adjust the principal balance of mortgages so homeowners can avoid foreclosures.

Funny name for it huh…. “Cram Down” measure.

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Bankruptcy Judges May be Able to Modify Loans!

There is little a Charlotte Real Estate Agent can do since the housing market is flooded with homes that are listed by real estate agents.  In December the Charlotte market had over 30,000 homes on the market and only about 2,200 houses sold.  The numbers suggest that less than 10% of the homes on the market are selling.  Sellers that need fast solutions must take matters into their own hands in order to sell their house quickly as possible, especially when they are facing foreclosure.

The only problem is the decline in home values in Charlotte, homes that once had plenty of equity now only have little equity and in most cases they have no equity at all or even negative equity.  Before the current market shift homeowners would have been stuck with a home that is upside down.  Now those homeowners have a solution and that solution to their tough house problem is a method that is becoming well known, the short sale process.

A short sale is when a the sellers mortgage lender agrees to reduce the amount owed on their mortgage balance to allow the homeowners to sell their house quicker for a better price.  Short sales are becoming more popular due to the foreclosure crisis that has been affecting house sales across the country.

Short sales benefit lenders because they can get their money now and save all the hassle of taking back a house that might or might now sell in the next 6 months plus.  Agreeing to a short sale also saves lenders thousands of dollars in lost mortgage payments and paying for foreclosure fees and closing cost.

Homeowners benefit from short sales also by being able to walk away from a home they no longer want or can afford.  In most cases lenders will agree to allow the seller to walk without coming after them for the balance left from the mortgage reduction and the sales price.  Plus a short sale relieves homeowners from coming to the closing with cash.  These benefits are perfect since the housing market in Charlotte, North Carolina has been going down since February 2008.

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Foreclosure Solutions for Charlotte Homeowners

Foreclosure Debt as Taxable Income?

If you have a mortgage debt eliminated or reduced due to a loan modification or foreclosure, the IRS may consider the amount forgiven as income! Yes, you read it right… the Foreclosure Plan being pushed by the current administration  will cost you, unless you apply for foreclosure tax relief as outlined in The Mortgage Debt Relief Act of 2007. This unique tax relief applies to mortgage debt during tax years 2007 to 2012, and with the record number of foreclosures last year, many taxpayers may be able to benefit.

Normally, debt forgiveness is counted as taxable income on your tax return. In the case of mortgage debt, your lender will send you a year-end statement Form 1099-C, which will show the amount of debt forgiven and the fair-market value of the foreclosed property. To not have the forgiven debt counted as income, you must fill out IRS Form 982, Reduction of Tax Attributes Due To Discharge Of Indebtedness.

According to the IRS tax tips on mortgage debt forgiveness, to qualify:

“The debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.”

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Foreclosure Tax Relief – What You Need to Know!

Obama said:

“those ridiculous contracts with pages of fine print that no one can figure out – those things will be a thing of the past,”

what he doesn’t mention is that all of that junk got there in the first place, as a result of previous rules and regulations drafted over the years from other consumer protection guidelines! In other words… more of the same, except this time, we want you to think we are actually something about it! …yawn…It will be interesting to see how much this new commission will end up costing taxpayers in the longrun, since most of these types of initiatives are developed for good cause, but by the time the lobbyists get their claws into the actual verbiage, guess who gets screwed in the end?

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Consumer Financial Product Commission Bill On Its Way!

California Foreclosure Prevention Act Passes

Effective Monday, June 22 2009, lenders must PROVE that they have exhausted all efforts to modify existing delinquent loans, before they can even begin the foreclosure process!

While many leaders fear it will have little immediate impact, the 90 day moratorium will enable some who have either lost jobs or fallen upon hard times, a second chance to turn things around before they find themselves homeless.

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Foreclosure Moratorium in California – Effective June 22 09

Three different appraisals of the property are required to be conducted before the scheduled sale date.  These appraisals must be performed by professionals who have no interest or other connection to the home being appraised.  The minimum asking price, or the least amount it can be sold for must be no less than two thirds of the appraised value that has been sent to and filed with the court.

The sale is held at the court house for the county in which the property is located.  Prior to the scheduled sale date, an advertisement, announcing the sale date, time, place and terms of the auction for the home must be run in a local paper.  This advertisement must be run at least once a week for three weeks consecutively in the weeks leading up tot the scheduled sale date, the paper in which the ad is to be run must name general circulation in the county win which the home is located.  The county sheriff will officiate at the auction.  The opening bid will be that two thirds value established by the three appraisals.  The person offering the highest price will be awarded the property by the sheriff.

Lenders do have the right in Ohio to see a deficiency  judgment.  This means that if the bank feels that the money generated by the sheriff’s sale has no other assets worth pursuing by the bank.  Deficiency judgments are therefore rarely sought.

The average amount of time for a foreclosure to run its full course in Ohio is 150 days.  I could find no specifics on how the funds for the winning purchase are to be paid.  Ohio foreclosure law does state the court will punish the winning bidder who fails to pay that bid by finding them in contempt of court.  That sounds pretty severe.  So, in Ohio make sure you can pay, if you are the highest bidder at the sale.

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Foreclosure Laws in Ohio

One of the largest differences in foreclosure law is whether a state uses mortgages or deeds of trust for real estate. “Deed of trust” is a term that’s not heard as often as mortgage, but in essence, they have the same function – they protect the lender from default on a loan that is secured by real estate. The major difference is in the process the lender must use to obtain the right to recover your property and sell it.

When you sign a mortgage agreement with a lending institution, you retain the deed to the property, and have full legal title to it – but you allow the lender to place a ‘lien’ on it. If you do not make the payments on the loan as agreed upon, the lender can foreclose on the property.

In some states, a deed of trust takes the place of a mortgage. With a deed of trust, you give the deed to the land or property to the lender, but the lender can only use or sell the property if you default on the loan.

In states that use mortgages, foreclosure law makes foreclosure a judicial procedure. A lender must prove to the court that the borrower has defaulted on the loan, and that they, the lender, have made appropriate attempts to resolve the default with the homeowner. There is a definite sequence of events that must be followed as prescribed in the foreclosure law, and knowing that sequence in your state can help you understand your options in terms of resolving the issue before it goes before a judge.

In states that use a deed of trust rather than a mortgage, the lender must go through certain steps of notification as required by foreclosure law in that state, but does not need judicial permission to proceed with a sale or foreclosure on the property to which they hold a deed in trust.

States whose foreclosure law requires judicial action include: Alabama, Arizona, Arkansas, Connecticut, Delaware, Florida, Montana, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Pennsylvania, South Carolina, South Dakota, Vermont, Washington and Wisconsin.

To learn more about your own States forclosure laws, check out this page.

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Using Foreclosure Laws to Your Advantage

The court injunction — which loan experts say appeared to be the first court-ordered stop for an entire state in the nation — stops judges in SC from finishing the foreclosure process on properties whose loans are guaranteed by Freddie Mac, Fannie Mae or any other mortgage company that has signed on to a federal assistance program.

RealtyTrac Inc., a foreclosure listing firm, says the ruling could affect up to 5,000 South Carolina homes facing foreclosure.

Read the full story on the AP Wire, or see if you qualify for a mortgage loan modification now.

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South Carolina Homeowners Get a Stay from Foreclosure

The vote came as the former head of the American Home Mortgage Investment Corp., agreed to pay nearly $2.5 million to settle allegations of accounting fraud.

“As foreclosures menace more and more hardworking homeowners, they become more desperate for help,” said Senate Majority Leader Harry Reid, D-Nev. “Unfortunately, schemers, swindlers and scam artists are all too happy to pounce.”

The Senate bill is estimated to cost more than $265 million a year for the next two years. Supporters, including President Barack Obama, say the legislation would more than pay for itself because of the fines and penalties that would result from more aggressive government investigations.

Bill supporters anticipate that the money would hire another 160 special FBI agents and more than 200 support staff, including forensic analysts. Currently, the FBI has fewer than 250 special agents assigned to financial fraud cases, despite caseloads that have more than doubled in the past three years.

Under the bill, the Justice Department would hire 200 more prosecutors and civil enforcement attorneys, along with 100 support staff.

The measure covers the 2010 and 2011 budget years, which begin Oct. 1.

The bill, which the full House could vote on as early as next week, encourages lenders to refocus their business on the kind of traditional 30-year, fixed-rate loans that require consumers to pay 20 percent of their house upfront. Other mortgages would be restricted in how they are sold.

Proponents of the bill say that if banks are required to retain some of the risk of the mortgages they sell, they would be less likely to lend to consumers with bad credit histories.

The bill also tries to protect consumers from exorbitant interest rates by limiting the amount of money a mortgage broker can earn from selling high-rate loans.

The House Financial Services Committee was on track to approve the measure on Wednesday, despite industry concerns that the new regulations would restrict the flow of available credit.

Source: AP News

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Mortgage Fraud Bill Ready for Obama’s Desk

The Maryland Foreclosure Process

There are three basic criterions with which a lender may initiate a foreclosure on your mortgage.

Judicial foreclosures

If your mortgage or deed of trust has no power of sale or assent to decree clause included, then a lender must initiate a formal complaint against you and request a decree of sale. It is then up to the court to discern whether a default has in fact occurred and issue the decree.

Non-judicial foreclosures

If your mortgage or deed of trust has a power of sale or assent to decree clause included, then a lender is pre-authorized to sell your property in the event of a default. With the Maryland foreclosure process, the lender must still file an order to docket in advance of initiating the foreclosure proceedings. There is however no requirement for a formal hearing to transpire before the proceedings begin.

Assent to decree

Here, the foreclosure process is simplified for the lender as the security documentation already includes a clause, signed by the borrower, that the borrower agrees to an entry for sale upon a pre-specified default amount. Although the lender must still file the motion in court, there is no requirement to wait for an answer or have a hearing in order for the foreclosure process to ensue.

Maryland Foreclosure Guidelines

The lender must have a notice of sale published in a local newspaper for 3 consecutive weeks before the sale is to transpire. The borrower must be informed of the intended sale by certified mail more than 10 days, but less than 30 days prior to the sale.

Only a trustee (an authorized representative of the lender) or the sheriff may conduct the sale. The sale must transpire either at the local courthouse, at the property for sale or at a location that has been included in the advertisements concerning the sale.

If for any reason the sale is postponed, the rescheduled date of sale must be published in the same manner as the first date of sale was.

When the sale has been completed, the seller must notify the court of the sale including complete details. This is to happen within 30 days from the sale date.

Lenders may file a deficiency judgment for up to 3 years. The amount of this deficiency judgment request is limited to the balance of the defaulted loan. The lender must also forego the costs of the foreclosure sale.

The timeline for the Maryland foreclosure process to be completed is typically 90 days. There is no right of redemption in Maryland. Understanding your rights and the rights of the lender for your mortgage is a necessary and valuable asset when your are faced with the possibility of foreclosure. To learn more about the Maryland foreclosure process, please visit Stop Foreclosure Help Today.

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Maryland Real Estate Foreclosure Process