CALIFORNIA HOMEOWNER BILL OF RIGHTS

On July 11, 2012, Governor Jerry Brown signed the California Homeowner Bill of Rights into law to bring fairness, accountability and transparency to the state’s mortgage and foreclosure process.

More than one million California homes were lost to foreclosure between 2008 and 2011-with an additional 700,000 currently in the foreclosure pipeline.
Seven of the nation’s 10 hardest-hit cities by foreclosure rate in 2011 were in California.

The California Homeowner Bill of Rights marks the third step in Attorney General Harris’ response to the state’s foreclosure and mortgage crisis.
The first step was to create the Mortgage Fraud Strike Force, which has been investigating and prosecuting misconduct at all stages of the mortgage process. The second step was to extract a commitment from the nation’s five largest banks of an estimated $18 billion for California borrowers. The settlement contained thoughtful reforms but are only applicable for three years, and only to loans serviced by the settling banks.

Two key bills of the Homeowner Bill of Rights contain significant mortgage and foreclosure reforms. The major provisions of

AB 278 (Eng/Feuer/Mitchell) and SB 900 (Leno/Corbett/DeSaulnier/Evans) include:

Dual track foreclosure ban:Single point of contact:Enforceability:Verification of documents:
The recording and filing of multiple unverified documents will be subject to a civil penalty of up to $7,500 per loan in an action brought by a civil prosecutor. Enforcement will also be allowed under a violator’s licensing statute by the Department of Corporations, Department of Real Estate or Department of Financial Institution. Borrowers will have authority to seek redress of “material” violations of theCalifornia Homeowner Bill of Rights. Injunctive relief willbe available prior to a foreclosure sale and recovery of damages will be available following a sale. Mortgage servicers will be required to designate a “single point of contact” for borrowers who are potentially eligible for a federal or proprietary loan modification application. The single point of contact is an individual or team with knowledge of the borrower’s status and foreclosure prevention alternatives, access to decision makers, and the responsibility to coordinate the flow of documentation between borrower and mortgage servicer. Mortgage servicers will be required to render a decision on a loan modification application before advancing the foreclosure process by filing a notice of default or notice of sale, or by conducting a trustee’s sale. The foreclosure process is essentially paused upon the completion of a loan modification application for the duration of the lender’s review of that application.

The Homeowner Bill of Rights goes into effect on January 1, 2013.

For more information contact: DiJulioLawGroup.com

LETTING YOUR HOUSE GO TO FORECLOSURE

What Happens if You Abandon Your Home and Let it Foreclose?

When you are facing foreclosure, it can be tempting to just give up and walk away from the home. Before abandoning your mortgage, you should consider the possible consequences of letting your home foreclose. Sometimes abandoning a house might seem like the best option, but foreclosing on your home often does more harm than good.

Besides losing your home and possibly having no place to live, allowing your home to be foreclosed will dramatically affect your credit rating and make it more difficult for you to qualify for a new loan in the future. There are also tax consequences of foreclosure that you should be aware of before you make the decision to let your home go into foreclosure.

So what happens if you abandon your home and let it foreclose? This article will help you understand what the consequences will be if your home ends up being foreclosed. It will also give you an idea of what to expect and offer some options for those who want to try to save their homes and avoid foreclosure.
The Effect of Foreclosure on Your Credit Rating
You may be wondering what happens to your credit with a foreclosure. You are probably aware that a foreclosure will hurt your credit score. How much it affects your score can vary, but keep in mind that every late payment will show up on your credit report. Also, when your home does go through foreclosure, an entry will be made in the section of your credit report that covers legal actions.

A foreclosure tends to affect your credit score more if you have very little other debts. If you have credit cards and car payments that are all up to date, this can help buffer the effect of the foreclosure on your credit rating. However, if you have few other items on your credit report, or those bills are also falling behind, the effect will usually be much greater.

The foreclosure and late payment record can remain on your credit report for up to seven years, but that doesn’t mean that you will be unable to get a loan for seven years. As soon as your financial situation improves, you should start making an effort to pay every bill you have on time. Many people find that after as little as two years of doing this, they are able to qualify for a new loan.

After going through a foreclosure, it is likely that you will need a large down payment next time you borrow money to buy a home. Your interest rate is also likely to be higher. Keep in mind that government programs such as Fannie Mae and Freddie Mac are unavailable to people who have had a home foreclosed within the past two years.

If your foreclosure was not caused by an injury or other unexpected circumstances that prevented you from being able to make your payments, perhaps you have issues with debt management that should be addressed.
Deficiency Judgments

One question that is asked often is, “If my house is foreclosed, can they make me pay?” In many states, the answer is yes. This is happening much more often now that it used to. The reason is that real estate prices have fallen, so it is much more likely that your home will be sold for less than the amount of the loan. If your state allows deficiency judgments, the lender can come after you for the difference between the amount you owed on your mortgage and the price the house sold for at the foreclosure auction.

Under California law Deficiency Judgments are generally not available. If the loan was made as part of the purchase then there is no possibility of a deficiency judgment. If the loan was part of a refinancing and the bank foreclose without going to court, then there is no possibility of a deficiency judgment.

However, if there is more than one loan, then the picture is more complicated. If the second forecloses first then the above rules apply. If the first foreclose first, then the second can file a lawsuit to try to collect on the second loan. In these situation, you should consult with us. DiJuloLawGroup.com

One thing many people don’t realize is that there is often a tax penalty that goes along with foreclosure. What happens is, if the house sells for less than the amount owed, the rest of the loan balance is considered “forgiven.”

The IRS looks at this as income because it is something you would have had to paid but are getting out of. As a result, you may be taxed on the difference between the amount you owed and the amount the house sold for. However, it appears that until the end of 2011, there are no tax consequences.

It is a good idea to talk to an accountant or tax lawyer about the possible tax consequences before you allow your home to foreclose.

 
Other Real Estate and Property
One thing people often worry about when facing foreclosure is whether the lender will be able to take other property and real estate that they own as well. Because real estate loans are secured by the property that is being financed, that property is usually all that the lender can take. However, if you specifically listed another piece of real estate as additional security when you applied for the loan, that property can also be taken.

When your lender forecloses on your home, your personal property is not included in the foreclosure. The lender has no claim on any property that is not permanently attached to the house.
Options for Avoiding Foreclosure
Instead of walking away from the house, it’s a good idea to contact your lender as soon as you start to have trouble making your payments to try to work something out. Many lenders have programs available to help homeowners who are going through short-term financial difficulties.

If it looks like you will not be able to work out a way to keep your home, some lenders will offer a “deed in lieu of foreclosure” or “cash for keys.” If you can get your lender to pay you to move out quickly and leave the home in good condition, that could help you pay the cost of moving into a new home. However, a deed in lieu of foreclosure usually has about the same effect on your credit rating as an actual foreclosure.

One alternative to abandoning your home is a short sale. Unfortunately, you need the bank’s cooperation to do it. When you sell your house in a short sale, the bank agrees to accept the amount that the house is selling for as full payment on the mortgage. Some banks will not do short sales at all, and those that do will make you jump through a lot of hoops and fill out tons of paperwork to get the sale approved. As a result, short sales are rare. However, if you can do it, a short sale is better that letting your house go into foreclosure.

A loan modification is an agreement between you and the bank that changes the terms of the loan. It is just about as hard to convince a bank to enter into a loan modification agreement as a short sale, maybe harder. If you pursue this option, it is a good idea to have an experienced attorney or loan modification company help you through the process.

As of December 2011, there is a new program for houses where the loan is owned by the government- Fannie Mae or Freddie Mac. If so, you can refinance at the current value of your house at a below 4% rate. See our blog on this< issue. You can check to see if your has qualifies on the links there.

Loan Modification

Short Sale

Deed in Lieu of Foreclosure

The Tax Consequences of Foreclosure

Deficiency Judgments Are Unlikely in California

STOP FORECLOSURE– REFI AT THE CURRENT VALUE

STOP FORECLOSURE THE EASY WAY, REFINANCE YOUR HOUSE FOR THE CURRENT FAIR MARKET VALUE WITH A NEW PROGRAM

 

If you’re underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal under the revised HARP program .

Here are the details:
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What Is HARP?
HARP was started in April 2009. It goes by several names. The government calls it HARP (Home Affordable Refinance Program.)

The program is also known as the Making Home Affordable plan, the Obama Refi plan, DU Refi +, and Relief Refinance.

In order to be eligible for the HARP refinance program:

1. Your loan must be backed by Fannie Mae or Freddie Mac.

2. Your current mortgage must have a securitization date prior to June 1, 2009

If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.

 
FAQs

Yes, the names HARP and Making Home Affordable are interchangeable.
How do I know if Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie Mac have “lookup” forms on their respective websites.

Check Fannie Mae’s first because Fannie Mae’s market share is larger.

If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.

If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
My mortgage is held by Fannie/Freddie. Now what do I do?
Find a recent mortgage statement and write “Fannie Mae” or “Freddie Mac” on it — whichever group backs your home loan — so you don’t forget. Give that information to your lender when you apply for your HARP refinance.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?

If neither Fannie nor Freddie has record of your mortgage, your loan is HARP-ineligible.Does HARP work the same with Fannie Mae as with Freddie Mac?

Yes, for the most part, the HARP mortgage program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For everyone else, the guidelines work the same.

 
Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP.

 
Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It’s meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today’s low mortgage rates.
What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP mortgage program before — only one HARP refinance per mortgage is allowed.

 
If I refinanced with HARP a few years ago, can I use it again for HARP II?
No. You can only use the HARP mortgage program one time per home.

 
Is there a loan-to-value restriction for HARP?
No. All homes — regardless of how far underwater they are — are eligible for the HARP program.

 
I am really far underwater on my mortgage. Can I use HARP?
Yes, you can. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use an adjustable-rate mortgage, your loan-to-value is capped at 105%.

Sort of. Although your home’s value doesn’t matter for the HARP mortgage program, lenders will run what’s called an “automated valuation model” (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway — just to make sure your home is “standing”.

Is HARP the same thing as an FHA Streamline Refinance?
No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.

Do I have to HARP refinance with my current mortgage lender?
No, you can do a HARP refinance with any participating mortgage lender.

 
I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
No, you won’t need to pay mortgage insurance. If your current loan doesn’t require PMI, your new loan won’t require it, either.

My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?
No. If your mortgage has lender-paid mortgage insurance (LPMI), you are HARP-ineligible.

HARP refinances are limited to your area’s conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $635,500. You can lookup your area’s conforming loan limits by clicking here.

 
Can I do a cash-out refinances with HARP?
No, the HARP mortgage program doesn’t allow cash out refinance. Only rate-and-term refinances are allowable.
Can I refinance a second/vacation home with HARP?

Yes.

Can I refinance an investment/rental property with HARP?
Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you’re an “accidental landlord” via HARP. The loan must meet typical program eligibility standards.

I rent out my old home. Is it HARP-eligible even though it’s an investment property now?
Yes, you can use the HARP Refinance program for your former residence — even if there’s a renter there now.

 
Are condominiums eligible for HARP refinancing?
Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.

 
Can I “roll up” my closing costs with a HARP refinance?
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however.
I am unemployed and without income. Am I HARP-eligible?
Yes, you do not need to be employed to use the HARP mortgage program. HARP applicants do not need to be “requalified” unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.

 
My original mortgage was a stated income loan. Will my income be verified with a HARP refinance?
No, your income will not be verified via the HARP refinance program unless your new principal + interest payment increases by more than 20 percent. If your new principal + interest payment increases by less than 20%, or falls, there is no income verification necessary.

 
I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?
Yes. With HARP, a borrower on the mortgage can be removed via a HARP refinance so long as that person is also removed from the deed; and has no ownership interest in the home.
http://themortgagereports.com/ratequote
What are the HARP program’s mortgage rates?
Mortgage rates for the HARP mortgage program are the same as for a “traditional” refinance. There is no “premium” for using the HARP program.

Is there a minimum credit score to use the HARP program?
No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

You go the the HARP website :http://harp-mortgage.com/?ctt_adid=9437652998&ctt_nwtype=search&ctt_adnw=Google&ctt_kw=harpprogram&gclid=CNbSncjf9awCFQh9hwodQTTWTw

Or you can go to FHA or FREDIE MAC’s website.

 

You can call DiJulio Law Group or go to their website. DiJuilioLawGroup.com

If I still need help, what should I do?

If I need more informatation what can I do?

 

 

Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.

 

What’s the biggest mortgage I can get with a HARP refinance?

 

 

 

Will my home require an appraisal with the HARP mortgage program?

 

Is “HARP” the same thing as the government’s “Making Home Affordable” program?

If you’re underwater on your mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.

UPDATE (December 8, 2011)

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