Below is a AP release discussing the Foreclosure Crisis in Amercia. My general take from the article is that the yoy increase in Foreclosures is an indication that the 'recovery' is not taking hold. For more information on your rights, consider seeking counsel from a Seattle Foreclosure Attorney.
AP, 2010
The number of U.S. households facing foreclosure in January increased 15 percent from the same month last year, and a surge in cash-strapped homeowners who've fallen behind on mortgages could be on the way.
More than 315,000 households received a foreclosure-related notice in January, RealtyTrac Inc. reported Thursday. That number is down nearly 10 percent from 349,000 in December, which saw the third highest total since the company began tracking foreclosure data in 2005.
In January, one in 409 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions. Banks repossessed more than 87,000 homes last month, down 5 percent from December but still up 31 percent from January 2009.
January marked the 11th straight month with more than 300,000 properties receiving a foreclosure filing. The numbers could stay above that level as unemployed homeowners who have tried to keep up with their mortgages finally start missing monthly payments.
Mortgage financier Fannie Mae reported in late January that the rate of borrowers who have a conventional loan on a house and are seriously delinquent was 5.29 percent in November, more than doubling the rate of 2.13 percent in November 2008. Borrowers are considered seriously delinquent if they are past due by three months or more, or are in foreclosure.
"There's a lot of foreclosures in the pipeline, and the number is going to continue to get bigger," said Patrick Newport, an economist with IHS Global Insight.
Last month's foreclosure activity followed a pattern similar to that of a year ago, when a double-digit percentage increase in December was followed by a 10 percent drop in January.
The dip in January's numbers may be due to processing delays by lenders during the end-of-year holidays, said Rick Sharga, senior vice president of RealtyTrac, which is based in Irvine, Calif.
"I don't think it's an early sign of the coming of the end of the foreclosure crisis," Sharga said.
A record 2.8 million households were threatened with foreclosure last year, and the numbers are expected to rise to between 3 and 3.5 million homes this year, RealtyTrac said.
Slowing the foreclosure rate is a key step in the recovery of the real estate market and the overall economy. The foreclosure crisis forced the federal government and several states to come up with plans to prevent or delay the process to help delinquent borrowers.
Foreclosed homes are usually sold at steep discounts, so they often lower the value of surrounding properties. Cities lose property tax dollars from foreclosure homes that sit empty and from declining home values, straining local economies. Home prices have stabilized in some cities, but are still down 30 percent nationally from mid-2006.
Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, subprime mortgages were mostly the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
Among states, Nevada posted the nation's highest foreclosure rate, followed by Arizona, California, Florida and Utah. Rounding out the top 10 were Idaho, Michigan, Illinois, Oregon and Georgia.
The metro area with the highest foreclosure rate in January was Las Vegas, with one in every 82 homes receiving a foreclosure filing. It was followed by Phoenix and the California cities of Modesto, Stockton, and Riverside-San Bernardino-Ontario.
Thursday, February 11, 2010
Tuesday, February 9, 2010
Fannie & Freddie problems
Excerpts from a terrific Article in the WSJ regarding Fannie, and Freddie
MCLEAN, Va.—When Charles E. Haldeman Jr. became Freddie Mac's chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It's likely to need even more.
Freddie's federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn't likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.
Former Fannie CEO Daniel Mudd testifying in 2008, says the U.S. is running Fannie and Freddie 'not as a business.'On a recent afternoon, employees at Freddie's headquarters here peppered Mr. Haldeman with concerns about the company's future. He responded that they were "fortunate" to have such a clear mission—the government's foreclosure-prevention drive. "We're doing what's best for the country," he told them.
Freddie and its larger rival, Fannie Mae, were among the first big financial institutions to receive massive federal bailouts after the financial crisis hit in 2008. Government officials have been racing to fix bailed-out car makers and banks and are pushing to reshape the financial-services industry. But Fannie and Freddie remain troubled wards of the state, with no blueprints for the future and no clear exit strategy for the government.
Nearly a year and a half after the outbreak of the global economic crisis, many of the problems that contributed to it haven't yet been tamed. The U.S. has no system in place to tackle a failure of its largest financial institutions. Derivatives contracts of the kind that crippled American International Group Inc. still trade in the shadows. And investors remain heavily reliant on the same credit-ratings firms that gave AAA ratings to lousy mortgage securities.
Fannie and Freddie, for their part, remain at the core of a housing-finance system that inflated a dangerous housing bubble. After prices collapsed, sending shock waves around the world, the federal government put America's housing-finance system on life support. It has yet to decide how that troubled system should be rebuilt.
On Dec. 24, Treasury said there would be no limit to the taxpayer money it was willing to deploy over the next three years to keep the two companies afloat, doing away with the previous limit of $200 billion per company. So far, the government has handed the two companies a total of about $111 billion.
This is a scary thought. Considering Fannie and Freddie back a huge portion of the mortgages in the U.S., loses to the taxpayer will be staggering.
The government is willing to tolerate such open-ended exposure for two reasons. First, it sees the companies as essential cogs in the fragile housing market. Fannie and Freddie buy mortgages originated by others, holding some as investments and repackaging others for sale to investors as securities. Together with the Federal Housing Administration, they fund nine in 10 American mortgages. Worries about potential insolvency would cripple their ability to fund home loans, which would hamstring the market.
Second, the companies are a convenient tool for the administration to use in its campaign to clean up the housing mess.
"We're making decisions on [loan modifications] and other issues, without being guided solely by profitability, that no purely private bank ever could," Mr. Haldeman said in late January in a speech to the Detroit Economic Club.
Besides playing a key role in the loan-modification program, Fannie and Freddie have jump-started lending by state and local housing-finance agencies by helping to guarantee $24 billion in debt. They also are lending support to the apartment sector by becoming the main funders of loans to builders and buyers of apartment buildings.
Freddie CEO Charles Haldeman says: 'We're doing what's best for the country.'
By using Fannie and Freddie for such initiatives, the White House doesn't have to go to Congress for funding. The Treasury and White House can simply issue instructions to Fannie and Freddie via their federal regulator, the Federal Housing Finance Agency, or FHFA.
The government is "running Fannie and Freddie as an instrument of national economic policy, not as a business," says Daniel Mudd, who was forced out as Fannie Mae's chief executive in September 2008 when the government took control.
Assistant Treasury Secretary Michael Barr says that because Fannie and Freddie are "owned by the taxpayers in the middle of the biggest housing crisis in 80 years," it would be unrealistic to expect the companies wouldn't be used to help stabilize the market. He says the administration's actions have been "prudent" and "consistent with taxpayer protection."
I pose the question: Are we stabilizing the market or prolonging the agony?
Some housing experts contend that prolonged government intervention will make it more difficult and costly to eventually wean the companies off government support. "The more aggressively we continue kicking the can down the road, the larger the losses become and the harder it becomes" to address the companies' future, says Joshua Rosner, managing director at investment-research firm Graham Fisher & Co.
As mortgage delinquencies rise, Fannie and Freddie are required to set aside more capital to cover anticipated losses. Each quarter, if their revenues are insufficient to meet those financial needs, the Treasury has to kick in more money.
With delinquencies still rising, the outlook is grim. At Freddie, 3.87% of single-family mortgages were at least 90 days past due at the end of December, up from 1.72% a year earlier. Fannie is worse: 5.29% were 90 days past due in November, up from 2.13% a year earlier.
With the fate of the two companies now largely in the hands of the government, employees have shifted their attention to the administration's loan-modification effort, called Home Affordable Modification Program, or HAMP. It provides financial incentives for banks and other owners of mortgages to reduce monthly loan payments for at-risk borrowers. Fannie and Freddie's job is to oversee how loan servicers—the firms that collect monthly payments on mortgages—are working with homeowners on the front lines.
The program is off to a slow start. The administration said it would offer three million to four million borrowers the chance to modify loans. Through December, loan servicers have signed up 903,000 borrowers for trial modifications. Just 66,000 have received a permanent fix so far.
Both Fannie and Freddie have struggled at times to adjust to the new marching orders. Fannie has warned in financial filings that the modification program had shifted "significant levels of internal resources and management attention" from other parts of the business, which could lead to a "material adverse effect" on the business.
He says he and others warned administration officials that the loan-modification goals were unrealistic, that borrowers whose homes weren't worth what they owed were unlikely to take part, and that many participants would be likely to re-default within months. "They really didn't want our views," Mr. Moffett says.
Freddie's current chief executive, Mr. Haldeman, 61 years old, says it was immediately "very clear" to him that the loan-modification program was a top priority of the Obama administration. But the program isn't his only headache. As foreclosures mount, Freddie finds itself with title to more and more homes. The company wants to price them to sell, but doesn't want to put downward pressure on overall housing prices.
"Imagine having to keep the lawns mowed, the lights on, and the property secured for one house, let alone more than 40,000 homes all over the country," says Mr. Haldeman. "It's not an easy process."
The Mortgage Bankers Association estimates that mortgage delinquencies won't peak any sooner than the middle of this year. At the current pace, around 6% of Fannie's loans and 4.9% of Freddie's are expected to go into default over the next 18 to 24 months, producing losses that would raise the price tag on Treasury's bailout to $175 billion, according to October estimates by investment bank Keefe, Bruyette & Woods Inc. The bank has since said that even that dire forecast is too optimistic.
Former FHFA head James Lockhart, the companies' top regulator until last August, says the U.S. is unlikely to ever fully recoup its investment in the two companies.
As I've mentioned before, I don't think this is a political issue as both sides of the congressional aisle are culpable and there is simply no quick fix to this crisis. The government simply needs to decide if we are going to be socialists or capitalists. Pick one and go with it. Playing this game where we pretend to be capitalists, while acting like socialists will only prolong our problems.
For more information on the Foreclosure Crisis, consider contacting a Kirkland Foreclosure Attorney.
Our Information:
Weitz Law Firm, PLLC
5400 Carillon Point
Building 5000
Kirkland, WA 98033
MCLEAN, Va.—When Charles E. Haldeman Jr. became Freddie Mac's chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It's likely to need even more.
Freddie's federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn't likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.
Former Fannie CEO Daniel Mudd testifying in 2008, says the U.S. is running Fannie and Freddie 'not as a business.'On a recent afternoon, employees at Freddie's headquarters here peppered Mr. Haldeman with concerns about the company's future. He responded that they were "fortunate" to have such a clear mission—the government's foreclosure-prevention drive. "We're doing what's best for the country," he told them.
Freddie and its larger rival, Fannie Mae, were among the first big financial institutions to receive massive federal bailouts after the financial crisis hit in 2008. Government officials have been racing to fix bailed-out car makers and banks and are pushing to reshape the financial-services industry. But Fannie and Freddie remain troubled wards of the state, with no blueprints for the future and no clear exit strategy for the government.
Nearly a year and a half after the outbreak of the global economic crisis, many of the problems that contributed to it haven't yet been tamed. The U.S. has no system in place to tackle a failure of its largest financial institutions. Derivatives contracts of the kind that crippled American International Group Inc. still trade in the shadows. And investors remain heavily reliant on the same credit-ratings firms that gave AAA ratings to lousy mortgage securities.
Fannie and Freddie, for their part, remain at the core of a housing-finance system that inflated a dangerous housing bubble. After prices collapsed, sending shock waves around the world, the federal government put America's housing-finance system on life support. It has yet to decide how that troubled system should be rebuilt.
On Dec. 24, Treasury said there would be no limit to the taxpayer money it was willing to deploy over the next three years to keep the two companies afloat, doing away with the previous limit of $200 billion per company. So far, the government has handed the two companies a total of about $111 billion.
This is a scary thought. Considering Fannie and Freddie back a huge portion of the mortgages in the U.S., loses to the taxpayer will be staggering.
The government is willing to tolerate such open-ended exposure for two reasons. First, it sees the companies as essential cogs in the fragile housing market. Fannie and Freddie buy mortgages originated by others, holding some as investments and repackaging others for sale to investors as securities. Together with the Federal Housing Administration, they fund nine in 10 American mortgages. Worries about potential insolvency would cripple their ability to fund home loans, which would hamstring the market.
Second, the companies are a convenient tool for the administration to use in its campaign to clean up the housing mess.
"We're making decisions on [loan modifications] and other issues, without being guided solely by profitability, that no purely private bank ever could," Mr. Haldeman said in late January in a speech to the Detroit Economic Club.
Besides playing a key role in the loan-modification program, Fannie and Freddie have jump-started lending by state and local housing-finance agencies by helping to guarantee $24 billion in debt. They also are lending support to the apartment sector by becoming the main funders of loans to builders and buyers of apartment buildings.
Freddie CEO Charles Haldeman says: 'We're doing what's best for the country.'
By using Fannie and Freddie for such initiatives, the White House doesn't have to go to Congress for funding. The Treasury and White House can simply issue instructions to Fannie and Freddie via their federal regulator, the Federal Housing Finance Agency, or FHFA.
The government is "running Fannie and Freddie as an instrument of national economic policy, not as a business," says Daniel Mudd, who was forced out as Fannie Mae's chief executive in September 2008 when the government took control.
Assistant Treasury Secretary Michael Barr says that because Fannie and Freddie are "owned by the taxpayers in the middle of the biggest housing crisis in 80 years," it would be unrealistic to expect the companies wouldn't be used to help stabilize the market. He says the administration's actions have been "prudent" and "consistent with taxpayer protection."
I pose the question: Are we stabilizing the market or prolonging the agony?
Some housing experts contend that prolonged government intervention will make it more difficult and costly to eventually wean the companies off government support. "The more aggressively we continue kicking the can down the road, the larger the losses become and the harder it becomes" to address the companies' future, says Joshua Rosner, managing director at investment-research firm Graham Fisher & Co.
As mortgage delinquencies rise, Fannie and Freddie are required to set aside more capital to cover anticipated losses. Each quarter, if their revenues are insufficient to meet those financial needs, the Treasury has to kick in more money.
With delinquencies still rising, the outlook is grim. At Freddie, 3.87% of single-family mortgages were at least 90 days past due at the end of December, up from 1.72% a year earlier. Fannie is worse: 5.29% were 90 days past due in November, up from 2.13% a year earlier.
With the fate of the two companies now largely in the hands of the government, employees have shifted their attention to the administration's loan-modification effort, called Home Affordable Modification Program, or HAMP. It provides financial incentives for banks and other owners of mortgages to reduce monthly loan payments for at-risk borrowers. Fannie and Freddie's job is to oversee how loan servicers—the firms that collect monthly payments on mortgages—are working with homeowners on the front lines.
The program is off to a slow start. The administration said it would offer three million to four million borrowers the chance to modify loans. Through December, loan servicers have signed up 903,000 borrowers for trial modifications. Just 66,000 have received a permanent fix so far.
Both Fannie and Freddie have struggled at times to adjust to the new marching orders. Fannie has warned in financial filings that the modification program had shifted "significant levels of internal resources and management attention" from other parts of the business, which could lead to a "material adverse effect" on the business.
He says he and others warned administration officials that the loan-modification goals were unrealistic, that borrowers whose homes weren't worth what they owed were unlikely to take part, and that many participants would be likely to re-default within months. "They really didn't want our views," Mr. Moffett says.
Freddie's current chief executive, Mr. Haldeman, 61 years old, says it was immediately "very clear" to him that the loan-modification program was a top priority of the Obama administration. But the program isn't his only headache. As foreclosures mount, Freddie finds itself with title to more and more homes. The company wants to price them to sell, but doesn't want to put downward pressure on overall housing prices.
"Imagine having to keep the lawns mowed, the lights on, and the property secured for one house, let alone more than 40,000 homes all over the country," says Mr. Haldeman. "It's not an easy process."
The Mortgage Bankers Association estimates that mortgage delinquencies won't peak any sooner than the middle of this year. At the current pace, around 6% of Fannie's loans and 4.9% of Freddie's are expected to go into default over the next 18 to 24 months, producing losses that would raise the price tag on Treasury's bailout to $175 billion, according to October estimates by investment bank Keefe, Bruyette & Woods Inc. The bank has since said that even that dire forecast is too optimistic.
Former FHFA head James Lockhart, the companies' top regulator until last August, says the U.S. is unlikely to ever fully recoup its investment in the two companies.
As I've mentioned before, I don't think this is a political issue as both sides of the congressional aisle are culpable and there is simply no quick fix to this crisis. The government simply needs to decide if we are going to be socialists or capitalists. Pick one and go with it. Playing this game where we pretend to be capitalists, while acting like socialists will only prolong our problems.
For more information on the Foreclosure Crisis, consider contacting a Kirkland Foreclosure Attorney.
Our Information:
Weitz Law Firm, PLLC
5400 Carillon Point
Building 5000
Kirkland, WA 98033
Thursday, January 21, 2010
HAMP Program Results
Below are some excerpts from a recent article in the Wall Street Journal:
Modified Loans Helps Housing Market:
President Barack Obama's plan to ease mortgage terms for millions of distressed homeowners, announced nearly a year ago, now is widely panned for having fallen short of its ambitious goals.
But some analysts say the program is a success in one sense: By slowing the flow of foreclosed homes to the market, it has helped prop up housing prices, at least for now. The administration's Home Affordable Modification Program, or HAMP, and other state and federal efforts to avert foreclosures have helped "buy time" for the housing market, preventing steeper home-price declines.
The official goal of HAMP is to reduce monthly loan payments for distressed borrowers so they can afford to stay in their homes. But housing analysts at UBS Securities in New York, in a report last week, described HAMP as "a vehicle to delay the timing of new foreclosures hitting the market."
UBSis dead on. For many borrowers, HAMP has become nothing more thana a great tool to extend the Foreclosure process and remain in their home without paying their mortgage.
Most analysts assume that a large share of the people who get modifications will default again within a year or two. Thus, some critics say the government and banks are merely "kicking the can down the road" on foreclosures that will hit the market eventually. The unresolved question is whether the housing market will be better able to absorb foreclosed homes in a year or two. That depends on whether the economy and job growth recover.
Treasury officials argue that the loan-mod program is working out well in terms of keeping many people in their homes, but they also acknowledge the broader effect on home prices: "I think it has had quite a strong stabilizing influence" on the housing market, Treasury Assistant Secretary Michael Barr said in a briefing Friday.
In late 2008, banks dumped many of their foreclosed homes on the market, pushing prices down sharply in some areas. Around that time, though, banks began acquiring fewer homes through foreclosure. That was partly because of various moratoriums on foreclosures at the state and federal level, followed by HAMP. Because of HAMP, banks feel heavy political pressure to carefully screen borrowers to see which ones might qualify for loan modifications before proceeding with foreclosures. That has extended the time it takes to decide whether to force through a foreclosure, creating a huge backlog of unresolved cases.
As a result, there are fewer foreclosed homes on the market. The number of such homes available for sale dropped to 637,000 in November 2009 from 845,000 a year earlier, Barclays Capital estimated. Barclays expects the number to start rising again as people who don't qualify for a loan modification or don't want one lose their homes, and peak at 747,000 in April before declining gradually.
That has implications for pricing. The S&P/Case-Shiller 20-city home price index is down 29% from its peak in 2006 but has leveled off in recent months as fewer foreclosures have hit the market.
As of Sept. 30, about 7.5 million households were behind on their mortgages or in the foreclosure process, according to the Mortgage Bankers Association, a trade group. It isn't clear how many of those homeowners can ultimately be rescued. HAMP so far has resulted in about 900,000 loan modifications, most of which are still in a trial period.
Louis Amaya, chief operating officer of National Asset Direct Inc., a New York-based asset manager whose affiliates purchase and service troubled mortgage loans, said the administration has used HAMP to shame lenders into offering lots of loan modifications but that a large share of those aren't sustainable. "The reality is that most people aren't going to qualify for a loan mod" that makes economic sense for both the borrower and lender, Mr. Amaya said. Those who can't afford their homes should be allowed to exit with dignity, such as through a short sale, in which the house is sold for less than the loan balance, he said.
Instead, HAMP is "dragging out" the foreclosure process, Mr. Amaya said, and "we need to let the market correct itself." Until the huge backlog of loans headed for foreclosure is cleared, he said, the housing market can't recover.
For better or for worse, we have mitigated the foreclosure problem in the short term. The question remains whether the economy can improve sufficiently to overcome the current credit hurdles before the next waves of foreclosures come.
For more information on the HAMP Program or other Foreclosure issues, you should consider talking to a Seattle Foreclosure Attorney.
Modified Loans Helps Housing Market:
President Barack Obama's plan to ease mortgage terms for millions of distressed homeowners, announced nearly a year ago, now is widely panned for having fallen short of its ambitious goals.
But some analysts say the program is a success in one sense: By slowing the flow of foreclosed homes to the market, it has helped prop up housing prices, at least for now. The administration's Home Affordable Modification Program, or HAMP, and other state and federal efforts to avert foreclosures have helped "buy time" for the housing market, preventing steeper home-price declines.
The official goal of HAMP is to reduce monthly loan payments for distressed borrowers so they can afford to stay in their homes. But housing analysts at UBS Securities in New York, in a report last week, described HAMP as "a vehicle to delay the timing of new foreclosures hitting the market."
UBSis dead on. For many borrowers, HAMP has become nothing more thana a great tool to extend the Foreclosure process and remain in their home without paying their mortgage.
Most analysts assume that a large share of the people who get modifications will default again within a year or two. Thus, some critics say the government and banks are merely "kicking the can down the road" on foreclosures that will hit the market eventually. The unresolved question is whether the housing market will be better able to absorb foreclosed homes in a year or two. That depends on whether the economy and job growth recover.
Treasury officials argue that the loan-mod program is working out well in terms of keeping many people in their homes, but they also acknowledge the broader effect on home prices: "I think it has had quite a strong stabilizing influence" on the housing market, Treasury Assistant Secretary Michael Barr said in a briefing Friday.
In late 2008, banks dumped many of their foreclosed homes on the market, pushing prices down sharply in some areas. Around that time, though, banks began acquiring fewer homes through foreclosure. That was partly because of various moratoriums on foreclosures at the state and federal level, followed by HAMP. Because of HAMP, banks feel heavy political pressure to carefully screen borrowers to see which ones might qualify for loan modifications before proceeding with foreclosures. That has extended the time it takes to decide whether to force through a foreclosure, creating a huge backlog of unresolved cases.
As a result, there are fewer foreclosed homes on the market. The number of such homes available for sale dropped to 637,000 in November 2009 from 845,000 a year earlier, Barclays Capital estimated. Barclays expects the number to start rising again as people who don't qualify for a loan modification or don't want one lose their homes, and peak at 747,000 in April before declining gradually.
That has implications for pricing. The S&P/Case-Shiller 20-city home price index is down 29% from its peak in 2006 but has leveled off in recent months as fewer foreclosures have hit the market.
As of Sept. 30, about 7.5 million households were behind on their mortgages or in the foreclosure process, according to the Mortgage Bankers Association, a trade group. It isn't clear how many of those homeowners can ultimately be rescued. HAMP so far has resulted in about 900,000 loan modifications, most of which are still in a trial period.
Louis Amaya, chief operating officer of National Asset Direct Inc., a New York-based asset manager whose affiliates purchase and service troubled mortgage loans, said the administration has used HAMP to shame lenders into offering lots of loan modifications but that a large share of those aren't sustainable. "The reality is that most people aren't going to qualify for a loan mod" that makes economic sense for both the borrower and lender, Mr. Amaya said. Those who can't afford their homes should be allowed to exit with dignity, such as through a short sale, in which the house is sold for less than the loan balance, he said.
Instead, HAMP is "dragging out" the foreclosure process, Mr. Amaya said, and "we need to let the market correct itself." Until the huge backlog of loans headed for foreclosure is cleared, he said, the housing market can't recover.
For better or for worse, we have mitigated the foreclosure problem in the short term. The question remains whether the economy can improve sufficiently to overcome the current credit hurdles before the next waves of foreclosures come.
For more information on the HAMP Program or other Foreclosure issues, you should consider talking to a Seattle Foreclosure Attorney.
Tuesday, January 19, 2010
Strategic Foreclosure - Immoral or Smart Business?
There was an interesting piece on Yahoo.com/finance regarding the ethical issues involved with walking away from your mortgage.
Click Link Here:
When making the decision to 'strategically default', you should consult a Washington Foreclosure Attorney, or an Attorney who does a lot of Foreclosure work in your State. The law varies State to State in regards to deficiency options, and the ability of the banks to pursue other assets.
Basics of Washington Law:
In Washington, the general rule is that the foreclosing party (Bank) cannot pursue a deficiency. The foreclosing party will simply be able to foreclose on the secured collateral. Washington does, however, allow the parties with Jr. Liens (ie. 2nd & 3rd mortgages)to the foreclosing party to seek a deficiency judgment. Accordingly, the decision to walk away should be well thought out based on the facts of your particular situation.
For more information, see a Seattle Foreclosure Attorney.
Our Firm:
Weitz Law Firm, PLLC
5400 Carillon Point
Building 5000, 4th Fl
Kirkland, WA 98033
T: (425) 889-9300
Click Link Here:
When making the decision to 'strategically default', you should consult a Washington Foreclosure Attorney, or an Attorney who does a lot of Foreclosure work in your State. The law varies State to State in regards to deficiency options, and the ability of the banks to pursue other assets.
Basics of Washington Law:
In Washington, the general rule is that the foreclosing party (Bank) cannot pursue a deficiency. The foreclosing party will simply be able to foreclose on the secured collateral. Washington does, however, allow the parties with Jr. Liens (ie. 2nd & 3rd mortgages)to the foreclosing party to seek a deficiency judgment. Accordingly, the decision to walk away should be well thought out based on the facts of your particular situation.
For more information, see a Seattle Foreclosure Attorney.
Our Firm:
Weitz Law Firm, PLLC
5400 Carillon Point
Building 5000, 4th Fl
Kirkland, WA 98033
T: (425) 889-9300
Sunday, January 17, 2010
Nationwide Foreclosure Update
Here is an interesting video from WSJ.com featuring Rick Sharga of Realty Trac, a group that tracks foreclosures nationwide:
Click Link here.
Mr. Sharga explains that we are currently in the 2nd phase of 3 phases in the foreclosure/ credit crisis. In Washington state, I would argue that we are closer to the first phase. That said, you should be aware of your rights in protecting your home from the Banks.
For more information on the Foreclosure process in Washington State, please consider contacting a Kirkland Foreclosure Attorney.
Click Link here.
Mr. Sharga explains that we are currently in the 2nd phase of 3 phases in the foreclosure/ credit crisis. In Washington state, I would argue that we are closer to the first phase. That said, you should be aware of your rights in protecting your home from the Banks.
For more information on the Foreclosure process in Washington State, please consider contacting a Kirkland Foreclosure Attorney.
Tuesday, November 24, 2009
Short sales & Your Credit
Facts about Short Sales:
Effects of Short Sale on your Credit Report:• 200-300 point reduction on your FICO score, depending on the borrower.
• Inability to obtain a mortgage for at least 24 months.
Effects of late payments on Credit Report:• 30-60 day late payments: an “isolated occurence” (do not have 30-60 day late payments on multiple accounts) does not cause long term damage to your credit.
• 90-120+ day late payments: drop credit score for the long haul (around 7 years).
Effects of Collections (post Short Sale Deficiencies) & Debt Settlement• Credit score will suffer with both; with debt settlement, however, you’ll eventually repay your debt and thus helping to rebuild your credit score
• Do not simply leave your debt hanging with collections in hopes that they will charge off the loan. They will continue to report that you are in default of “installment payments,” etc. They can do this for years. It is better to settle your debt and move on. You especially do not want additional 90 day late payments reported as your credit score at that point will drop significantly.
For more information, feel free to contact us at (425) 889-9300 or @ ScottWeitz@weitzlawfirm.com.
For our website, please clink link for Short Sale Attorney in Kirkland.
Effects of Short Sale on your Credit Report:• 200-300 point reduction on your FICO score, depending on the borrower.
• Inability to obtain a mortgage for at least 24 months.
Effects of late payments on Credit Report:• 30-60 day late payments: an “isolated occurence” (do not have 30-60 day late payments on multiple accounts) does not cause long term damage to your credit.
• 90-120+ day late payments: drop credit score for the long haul (around 7 years).
Effects of Collections (post Short Sale Deficiencies) & Debt Settlement• Credit score will suffer with both; with debt settlement, however, you’ll eventually repay your debt and thus helping to rebuild your credit score
• Do not simply leave your debt hanging with collections in hopes that they will charge off the loan. They will continue to report that you are in default of “installment payments,” etc. They can do this for years. It is better to settle your debt and move on. You especially do not want additional 90 day late payments reported as your credit score at that point will drop significantly.
For more information, feel free to contact us at (425) 889-9300 or @ ScottWeitz@weitzlawfirm.com.
For our website, please clink link for Short Sale Attorney in Kirkland.
Thursday, November 19, 2009
Lowering Your Mortgage Payments
If you are like many people right now and behind on your mortgage payments, you can lower your mortgage payments in a variety of ways.
Loan Modification: This is negotiated between you and your lender. While it is at the discretion of your lender to approve the modification, here are a few ways through a Loan Modification to reduce your monthly mortgage payments:
Extend the Repayment Period -- By extending the repayment period on your loan, you bring down the monthly payments and allow your home to appreciate in value, gaining equity.
Reduce the Interest Rate -- Negotiate with the lender to apply the current market interest rate, assuming it is lower than what you are paying right now.
Forbearance: This allows for you to reduce or suspend your payments for a period of time. The downside here is that at the end of the period, you must pay an extra amount on top of the payment due.
For more information, contact a Kirkland Real Estate Attorney.
Loan Modification: This is negotiated between you and your lender. While it is at the discretion of your lender to approve the modification, here are a few ways through a Loan Modification to reduce your monthly mortgage payments:
Extend the Repayment Period -- By extending the repayment period on your loan, you bring down the monthly payments and allow your home to appreciate in value, gaining equity.
Reduce the Interest Rate -- Negotiate with the lender to apply the current market interest rate, assuming it is lower than what you are paying right now.
Forbearance: This allows for you to reduce or suspend your payments for a period of time. The downside here is that at the end of the period, you must pay an extra amount on top of the payment due.
For more information, contact a Kirkland Real Estate Attorney.
Monday, November 16, 2009
Economic Considerations of Foreclosure
Foreclosing on your home requires serious consideration for any homeowner. Besides the emotional strain, homeowners must also look at the economic considerations involved in possibly foreclosing on their home. Here is what you should ask yourself:
(1) Do I have equity in my house?
This is a highly important question for any homeowner considering foreclosure. To find out what your home is worth, put your address in at www.zillow.com, www.housevalue.com, or similar websites.
If your home is worth at least as much as you owe on it, foreclosure may not be your best option. Or you can sell the house and free yourself from the mortgage.
(2) Can you make your monthly payments?
An old rule of thumb is that a homeowner should not pay more than 25% of their gross income for shelter. If your mortgage payment exceeds 25% of your gross income, you may need to evaluate whether this is sustainable for the future.
Additionally, there are also online calculators that, while imperfect, can give you an idea of how much house you can afford. Google "home affordability calculators" and choose one for yourself.
Finally, ask a Budget-Counseling Agency to look over your income and expenses to help determine if you can afford your monthly payments.
For more information, contact Kirkland Foreclosure Attorney.
(1) Do I have equity in my house?
This is a highly important question for any homeowner considering foreclosure. To find out what your home is worth, put your address in at www.zillow.com, www.housevalue.com, or similar websites.
If your home is worth at least as much as you owe on it, foreclosure may not be your best option. Or you can sell the house and free yourself from the mortgage.
(2) Can you make your monthly payments?
An old rule of thumb is that a homeowner should not pay more than 25% of their gross income for shelter. If your mortgage payment exceeds 25% of your gross income, you may need to evaluate whether this is sustainable for the future.
Additionally, there are also online calculators that, while imperfect, can give you an idea of how much house you can afford. Google "home affordability calculators" and choose one for yourself.
Finally, ask a Budget-Counseling Agency to look over your income and expenses to help determine if you can afford your monthly payments.
For more information, contact Kirkland Foreclosure Attorney.
Sunday, November 8, 2009
Washington Deficiency Judgments Post-Foreclosure
One of the major components of deciding whether to stay in your home or simply walk away is whether you will owe in money should you decide to walk away. In Washington State, the foreclosing lender (typically your 1st mortgage) can not pursue a deficiency judgment except under rare circumstances (a judicial foreclosure - which is extremely rare). Unfortunately, all other mortgagees & lines of credit can pursue a deficiency, however, it is possible to wipe them out by filing a Ch. 7 Bankruptcy or Ch. 13 Bankruptcy.
In sum, if you have just one mortgage, you will be able to walk away from your mortgage without owing any money. If you have multiple mortgages, the decision process will be more complicated.
For information on Washington Foreclosure Laws, please consider seeing a Washington Foreclosure Specialist.
Our Firm:
Weitz Law Firm
Kirkland, WA 98033
(425) 889-9300
weitzlawfirm.com
Washington Foreclosure Timeline/ Process
Over the course of this blog, I will provide detailed information on the Foreclosure porcess in Washington. Detailed information on the foreclosure process, tips to stop foreclosure, arguments to fight foreclosure, and ways for consumers to maximize their time in their homes throughout this process. Millions of people throughout the country find themselves struggling to stay in their homes, we want to a valuable resource for people in this unprecedented economic times. While this information will be helpful, it should not be construed as legal advise, and should not take the place of Seattle Foreclosure Attorney.
PLEASE SEE RCW 61.24 for any updated laws to the Washington Foreclosure Laws.
The Washington Foreclosure Timeline:
1) The Mortgage holder (ie. bank, investor) generally must provide an option for the homeowner to elect a Face to Mediation to review their loan rights and avoid foreclosure whether that be short sale, loand modificaiton or otherwise at least 30 days before serving a Notice of Default. This is will come in the form of a 'Notice of Pre-foreclosure Options'.
Note that this law is new as of July, 2011 and there are exceptions to this rule that should be discussed with a Attorney or HUD Counselor.
2) A Notice of Default must be served on a Homeowner at least 30 days prior to serving a Notice of Trustee Sale.
3) A Notice of Trustee Sale must be served at least 90 days prior to the actually Trustee Sale (Foreclosure sale).
4) The Trustee Sale is the actual foreclosure
5) After the sale, a homeowner has 20 days to abandon the property under Washington law.
Homeowner Tip: Without any additional delays like a loan remodification request, or bankruptcy, a Homeowner can have 170 days of rent free living!!!
For further tips on navigating the foreclosure process, please see a Seattle Foreclosure Attorney.
Our Firm Contact information is below:
Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033
(425) 889-9330
scottweitz@weitzlawfirm.com
PLEASE SEE RCW 61.24 for any updated laws to the Washington Foreclosure Laws.
The Washington Foreclosure Timeline:
1) The Mortgage holder (ie. bank, investor) generally must provide an option for the homeowner to elect a Face to Mediation to review their loan rights and avoid foreclosure whether that be short sale, loand modificaiton or otherwise at least 30 days before serving a Notice of Default. This is will come in the form of a 'Notice of Pre-foreclosure Options'.
Note that this law is new as of July, 2011 and there are exceptions to this rule that should be discussed with a Attorney or HUD Counselor.
2) A Notice of Default must be served on a Homeowner at least 30 days prior to serving a Notice of Trustee Sale.
3) A Notice of Trustee Sale must be served at least 90 days prior to the actually Trustee Sale (Foreclosure sale).
4) The Trustee Sale is the actual foreclosure
5) After the sale, a homeowner has 20 days to abandon the property under Washington law.
Homeowner Tip: Without any additional delays like a loan remodification request, or bankruptcy, a Homeowner can have 170 days of rent free living!!!
For further tips on navigating the foreclosure process, please see a Seattle Foreclosure Attorney.
Our Firm Contact information is below:
Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033
(425) 889-9330
scottweitz@weitzlawfirm.com
Thursday, October 8, 2009
Protest Your King County Property Tax Assessment
General Facts about King County Property Tax Assessments:
King County property owners who believe the assessed value of their property exceeds its true value may appeal following the receipt of the Assessor’s revaluation notice by timely filing a petition to the King County Board of Equalization on OR before July 1st of the assessment year OR within sixty (60) calendar days after the date listed on the Assessor’s value change notice (whichever date is later). For more information, please see an experienced King County Real Estate Attorney.
How to Appeal
Filing an appeal with the BOE only requires the submission of two sets of the BOE’s petition form. As long as your petition includes sufficient information or statements to apprise the Board and the Assessor of the reasons why you believe the Assessor’s determination is incorrect, it is not necessary to include all the documentary evidence you intend to submit within you initial filing.
Factual Error Corrections
Assessor’s Response to Your Appeal
You can expect a response from the Assessor in two to six months. Based on the evidence included within your petition, the Assessor may choose to recommend an adjustment in the assessed value. If this occurs and you agree to the Assessor’s stipulated or recommended value amount, the need for a hearing will likely be eliminated. About 20% to 25% of the petitions filed each year are resolved in this manner.
For assistance in appealing your property value, consider contacting a Kirkland Real Estate Attorney.
King County property owners who believe the assessed value of their property exceeds its true value may appeal following the receipt of the Assessor’s revaluation notice by timely filing a petition to the King County Board of Equalization on OR before July 1st of the assessment year OR within sixty (60) calendar days after the date listed on the Assessor’s value change notice (whichever date is later). For more information, please see an experienced King County Real Estate Attorney.
How to Appeal
Filing an appeal with the BOE only requires the submission of two sets of the BOE’s petition form. As long as your petition includes sufficient information or statements to apprise the Board and the Assessor of the reasons why you believe the Assessor’s determination is incorrect, it is not necessary to include all the documentary evidence you intend to submit within you initial filing.
Factual Error Corrections
Assessor’s Response to Your Appeal
You can expect a response from the Assessor in two to six months. Based on the evidence included within your petition, the Assessor may choose to recommend an adjustment in the assessed value. If this occurs and you agree to the Assessor’s stipulated or recommended value amount, the need for a hearing will likely be eliminated. About 20% to 25% of the petitions filed each year are resolved in this manner.
For assistance in appealing your property value, consider contacting a Kirkland Real Estate Attorney.
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