Strategic Default Monitor – How To Strategically Default

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