Strategic Default Monitor – How To Strategically Default
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Tuesday, April 28, 2015

Got Questions? Get Answers... MD Is Concerned About Her Family's Future And Is Considering Strategic Default

Got Questions?

To Whom it May Concern;


I came across the term 'strategic default' recently while researching the idea of letting my home go into foreclosure. I am not a homeowner struggling to pay my bills, I have excellent credit and not very much credit card debt.  I was looking for a way to avoid bankruptcy if possible.


I purchased my home about 7 years ago.  I was a single mom of 2 young boys and my tiny, 2 bedroom ranch made perfect sense for us at the time.  I planned on making improvements over the years and being able to some day sell my home and make a profit.  However, we are now desperate for a bigger home and unfortunately owe more than I could sell it for.  I have talked to representatives with HARP who say that because I have no trouble paying my mortgage that they can't help me. I have talked to my mortgage servicer and they can't help me either.  I would not qualify for a short sale, deed in leiu or even to refinance.


I struggle with this idea feeling that staying here and paying my mortgage every month is the morally right thing to do but this home no longer suits our needs as a family and is in need of repairs that I simply cannot afford. I met with a "real estate" attorney thinking he could help guide me.  He had never heard of strategic default or the mortgage debt relief act.  He was unable to tell me anything.  He said I was asking a lot of what if type questions he couldn't answer.  He told me because I pay my bills I should simply keep doing that.


I came across your website and it said you offer consultation on such a process and to email you.  So, I would appreciate any information you could provide to help guide me in the path that is right for my family and I.


Thanks for your time.


Sincerely,

MD

Get Answers...



Tuesday, April 21, 2015

Latest Foreclosure News 4-16/2015

Freddie and Fannie to Lower Some Fees 4-15-2015
The federal regulator of Fannie Mae and Freddie Mac plans to lower the mortgage fees paid by some borrowers, but the move would amount to only modest help for risky buyers with checkered credit histories. The Federal Housing Finance Agency is expected to announce in coming days changes to fees that Fannie and Freddie charge lenders to guarantee mortgages, according to people briefed on the matter. For those borrowers affected by the changes, the benefits would be tiny, amounting to less than one-tenth of a percentage point. Fannie and Freddie, which back most home loans, will raise fees for other borrowers, like those who buy investment properties, to balance out the cost of the fee reduction. The changes are not expected to have any effect on revenue. Read More at the New York Times

Foreclosure to Home Free, as 5-Year Clock Expires 3-29-2015
The statute of limitations does not halt a foreclosure case that is continuing in court. But in some Florida courts, homeowners’ lawyers have argued that once a foreclosure is dismissed even for technical reasons, the lender cannot refile a new foreclosure to seize the home if the statute of limitations has passed. Still, the lender has some recourse: It can keep a lien on the house that must be paid off if the property is ever sold. The issue is now before the Florida Supreme Court. The lenders’ lawyers have warned in court papers that if the state’s high court sides with the homeowners, “it would spawn a public policy hazard” and dissuade banks from extending mortgages in Florida in the future. Read More at the New York Times

Monday, February 23, 2015

Student Debt Monitor

The Student Debt Monitor page is our newest project dedicated to providing news and information relevant to this rising issue which has been plaguing many young Americans. Aside from the links leading to general articles discussing this topic matter, we will soon be updating with original content which dives into the major concerns, roots of the problem, and the potential solutions surrounding the student debt crisis.

Thursday, October 16, 2014

Latest Foreclosure News 10-16-2014

For thousands of US short-sellers, a big gift 12-26-2014
The Senate’s 11th-hour extension of the Mortgage Forgiveness Debt Relief Act ends on Dec. 31. The federal tax code treats forgiven debt as ordinary income to the borrower, taxable at regular rates. But under an exception that took effect in 2007, qualified home mortgage debt that is canceled by a lender as part of a short sale, loan modification or foreclosure is treated as non-taxable... So how do you know whether your short sale, loan modification or foreclosure is covered by the extension for 2014? The key points you will need to know include: 1. The house securing the mortgage debt must be your principal residence. 2. The maximum amount of debt that qualifies for relief is $2 million ($1 million if you are married filing taxes singly.) 3. Any portion of the mortgage debt forgiven that was used for purposes other than improving or building the house will not qualify for the exclusion and may be taxable. Read More at the Real Deal

Future SHOCK for Older Homeowners: You Won’t Get a HELOC, a Second, or Refi based on your Equity 10-15-2014
The reality is that with the private RMBS securitization market still largely frozen, government lending essentially the only game in town, the prevalent and entirely reasonable fear of “buy backs” among bankers, actions by the Consumer Financial Protection Bureau (CFPB), Dodd-Frank’s impact, new QM rules, and whatever else you’d want to throw in under the category of new and increased pressures on lenders… it should not be a surprise that loans are harder to come by than at any time in recent history. Today, your assets don’t matter when applying for a mortgage… only the amount of income you earn is considered when assessing your ability to repay the loan. That means that today, the fact that you own a home free and clear that’s worth $1 million, by itself, is not going to get you approved for a Home Equity Line of Credit (HELOC), second mortgage or refinance... to get approved for a HELOC, or a second home, not only do you need significant equity, but you’ll also need actual income that’s deemed sufficient to repay the loan… and a glimmering FICO score… like we’re talking 760+… that sort of thing. Read More at Mandelman Matters

Americans face post-foreclosure hell as wages garnished, assets seized 10-14-2014
Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets... Using a legal tool known as a "deficiency judgment," lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Read More at Reuters

Foreclosure Dispute Pits Mortgage Lenders vs. Investors 10-14-2014
Mortgage lenders and housing investors are squaring off in Nevada over a court decision that has allowed thousands of foreclosed homes to be sold for pennies on the dollar, in a case that could have big implications on an already-tight home-loan market across the country. At issue are homeowners associations and the liens they put on properties when a homeowner stops paying dues. Homeowners associations enforce rules in a community and collect dues to maintain common areas and pay for repairs... In a court filing Tuesday, the Mortgage Bankers Association wrote that because of the decision, “mortgage lenders stand to lose millions—perhaps even billions—of dollars in security interests.” Read More at The Wall Street Journal

Fair housing group challenges U.S. Bank over foreclosure upkeep 10-8-2014
On Wednesday, the National Fair Housing Alliance accused the Minneapolis-based bank of racial discrimination in its upkeep of foreclosed properties in Minneapolis, renewing a debate over who is responsible for maintaining foreclosed properties — and to what extent. This was the housing group’s fourth announcement of claims against U.S. Bank, and its complaint now covers neighborhoods in 19 metro areas across the country... The group has been aggressively pursuing charges of racial discrimination in foreclosure upkeep for the past few years. It has filed claims with the U.S. Department of Housing and Urban Development against Bank of America and Wells Fargo. Read More at Star Tribune

Wednesday, March 12, 2014

Latest Foreclosure News 3-12-2014

Good News About Housing Recovery… Your Kids Will be Living With You for a Long Time 2-22-2014
Recently released surveys from both Gallup and Pew Research Center showed that as many as 36 percent of Americans 18 to 31 years old are still living with their parents… the highest level ever recorded. And Time Magazine says we’ve got 25 million adults kids still living with mom and dad... You’ve heard about the housing recovery, right? How could you not? On any given day these days, you can find the good news about housing markets in this country all over the media… prices are recovering, or so the story goes. The only problem with the “news” is that as of January 30th of this year, sales of existing U.S. homes plunged to the worst pace in 18 months. Read More at Mandelman Matters

Homeowner Alert: Scammer Masquerades as Bank, Offers Fake Loan Mods 2-22-2014
As if REAL loan modifications weren’t often illusory enough, now there are scammers masquerading as banks, offering FAKE LOAN MODIFICATIONS… and if that weren’t bad enough, the fake mods require homeowners to pay thousands of dollars for nothing. This past week, Illinois consumer attorney Rick Rogers reported that a homeowner in the Chicago area, a school teacher who had been trying for a couple years to get her loan modified had not been approved… and her home was going into foreclosure. She kept trying though until one day this past fall she received a letter that appeared to say that Bank of America was now approving her loan modification. Read More at Mandelman Matters

Uncertainty in the Loan Mod Process is Barrier to U.S. Economic Growth 2-21-2014
"...why doesn't anyone talk about the monument to uncertainty that's been placed square on the collective chest of the American homeowner... the loan modification process? It's the proverbial life preserver for the underwater homeowner at risk of losing a home to foreclosure that sinks more often than it floats... and often times no one knows why. And it's the poster-child for uncertainty.'' Read More at Mandelman Matters

Friday, January 10, 2014

Latest Foreclosure News 1-10-2014

What the new mortgage rules mean for you 1-10-2014
New mortgage lending rules are going into effect Friday that aim to put an end to the worst mortgage lending abuses of the past... The new rules are designed to take a "back to basics" approach to mortgage lending and lower the risk of defaults and foreclosures among borrowers, according to the Consumer Financial Protection Bureau, which issued the new rules. Mortgage lenders are being asked to comply with two new requirements: The Ability to Repay rule and Qualified Mortgages. Read More at CNN

How the CFPB plans to empower homeowners 1-8-2014
The Consumer Financial Protection Bureau is living up to its name — putting consumers first as the bureau rolls out tools to help borrowers hold financial firms accountable... The CFPB intends to make homeowners more empowered to fight back. Just this week, the bureau announced a series of materials – from sample letters to new mortgage rule guides. All of those materials aim to educate borrowers on when a bank has violated a key mortgage provision and how to resolve those errors. Read More at the HousingWire

Florida housing market may get a boost from ‘boomerang buyers’ 12-28-2013
Founders of the San Diego-based company AfterForeclosure.com said last week that millions of banned borrowers nationwide will be eligible for a mortgage next year, while Jupiter mortgage broker Skip McDonough said his firm is already doing deals with home buyers who were forced into default during the housing bust... Under the FHA's "Back to Work" program, it will approve certain borrowers for a home loan just one year after a foreclosure, short sale, deed in lieu of foreclosure or bankruptcy. The FHA's previous timeline was three years for a short sale and foreclosure and two years for a bankruptcy. Read More at The Globe and Mail


Monday, November 25, 2013

Latest Foreclosure News 11-25-2013

Both the Fair Housing Act and Civil Rights Act were designed to protect consumers and homeowners from being trampled in the way they have been repeatedly… if you were told you did not qualify to apply, should not apply, or otherwise discouraged from applying for a loan or modification for any reason it could be a Fair Housing violation; if you believe you are qualified for loans you can repay to keep you in your home but believe you have been improperly denied a loan or modification it could be a Fair Housing violation; if during the course of the loan, from beginning to now you believe you were discriminated against, treated differently, or harmed by your Servicer or Lender it could be a violation of the Fair Housing Act. Read More at The Huffington Post

With home prices on the rise and foreclosures down nearly 30 percent from this time last year, the major issue distressed homeowners face today is the lack of laws that mortgage servicers are forced to abide by… During the housing crisis, the sloppy and unscrupulous collection practices were exposed as millions of homeowners could no longer afford to pay their mortgage. Because of this, various laws came into play and the CFPB has established a new set of rules servicers must follow – beginning January 1, 2014. Read More at LoanSafe

The Massachusetts Division of Banks has adopted amendments to its debt collection and loan servicing rules that prevent third-party mortgage servicers, including banks, from foreclosing on mortgaged property if an application for a loan modification is in process. The amended rules, which became effective on October 11, are meant to complement the recently adopted foreclosure prevention rules that require home mortgage lenders and servicers to modify certain mortgage loans if the cost of modification is less than the cost of foreclosure, according to the Division… Under the amended debt collection and loan servicing rules, third-party mortgage servicers are required to consider options to avoid foreclosure and third-party mortgage servicers are prohibited from initiating a foreclosure when an application for a loan modification is in process, a practice also known as “dual tracking.” Read More at Lexology