Freeze On Home Foreclosures Says FOX

The White House is considering changes to its mortgage modification plan that could include a freeze on home foreclosures, sources tell FOX Business.

According to industry officials who have been briefed on the plan, the administration is considering changes that would require home-loan servicing companies to push delinquent borrowers into the Home Affordable Modification Program before they consider foreclosure.

Lenders, investors and mortgage-service companies would be prevented from foreclosing on a homeowner while a home buyer is solicited, responds and eventually goes through a  trial period under HAMP.

Analysts tell FOX Business that the possible changes, if adopted, effectively prevent virtually all foreclosure action in the country for an extended period.

While home prices have recovered and sales activity has picked up, the latest statistics show that the number of foreclosures nationwide continues to rise. Loans that have headed into the foreclosure process rose to 4.58% of all mortgages in the fourth quarter, the Mortgage Bankers Association said Friday.  New delinquencies, however, declined.

The freeze on home foreclosures would be a new step for the Obama Administration, which has pushed banks towards mortgage modifications as part of a solution to solve the ongoing problems in the housing market.

Embracing HAFA – (Home Affordable Modification Alternatives)

Mark Hansen is a mortgage market researcher and analyst.  He has an interesting perspective and a clear understanding of the issues.

By Mark Hansen http://mhanson.com/archives/396?shortsaleleads.org

Embracing HAFA – (Home Affordable Modification Alternatives)

It is time to move on. The best solution going forward is for the banks to fully embrace Treasury’s HAFA (short sales and DIL’s) program, begin to foreclose in earnest like they started to in 2008, and get these properties into the hands of new owners.

We know there is huge demand for distressed real estate from investors and those that really can afford to own a home and prices in the hardest hit regions have stabilized somewhat, at least temporarily. There is a lot of excitement around this one. The initial reaction from the lenders I talk to is very positive — if forced to chose, they much rather have a short sale or DIL than a foreclosure because loss severities are much less for obvious reasons.

They are not doing distressed homeowners any favors through loan mods — the distressed homeowner will be in a better position renting a property that they can really afford instead of being saddled to hundreds of thousands in debt that chews up the majority of their gross income every month. Obviously, this will be painful on many financial institutions but the fact is they can’t kick the can forever. And the longer they kick it, the greater the losses will be when the chicken finally comes home to roost.

One of the biggest unintended consequences of HAMP was creating a lack of distress inventory, which is most in demand. Without REO, which made up a large percentage of total sales last year, the depressed rate of existing home sales in 2009 was as good as it gets for a lot of years. HAFA is exactly what is needed to keep sales counts from tumbling in 2010. The only negative is that because DIL’s are REO and short sales considered ‘distressed’, there will be negative housing implications from significantly increased distressed sales as a percentage of total sales.

This is why I believe that 2010 kicks off a paradigm shift from pretend and extend to the first year of a multi-year drive to finally de-lever through increased asset liquidations spearheaded by the HAFA initiative. Over a lot of years, this is exactly what is need to essentially ‘reset’ the housing market and is where my research centers this year.

Not all short sales are tax exempt.

Former homeowners who had a short sale or foreclosure of their principal residence during 2009 are facing a challenge when preparing their income tax returns.

“When there is a cancellation of debt relating to a principal residence, different results may apply depending on the facts,” says Michael Gray, CPA, author of the Real Estate Tax Handbook. “If the loan was refinanced and cash was used for a purpose other than home improvement, like to buy a car or take a vacation, that part of the loan doesn’t qualify for the federal tax exclusion for cancellation of principal residential indebtedness. If the loan was ‘non-recourse’ (the lender can only look to the property for repayment), the short sale or foreclosure should be reported as a sale for the balance of the mortgage.”

“Some people are simply reporting the cancellation amount from information returns reported by the lenders as income, which is probably wrong, resulting in paying too much tax. To top everything else off, different rules may apply for state income tax reporting. For example, California hasn’t conformed to the federal exclusion for 2009.”

Michael Gray “wrote the book”, the Real Estate Tax Handbook, about real estate taxation and can give your audience vital information they need right now. To interview him, call 408-918-3161.

Where the "Real Money" is being made in short sales.

This video will shock you.  Watch and learn how Goldman Sachs and others at the top of the oligarchy are participating in the fleecing of America.

 www.thinkbigworksmall.com/mypage/player/tbws/23088/1000148

Bank of America Fires Employees Of 21 Years Then Forecloses on Loan He Paid Off!

Here is yet another example of the B of A and their strong arm heavy handed lets rip-him-a-new-one, business practices.

This is a letter to B of A's Brian Moynihan from an ex-employee.

January 17, 2010

Bank of America
Brian Moynihan
100 N. Tryon Street
NC-1-007-18-01
Charlotte, NC. 28255

Dear Mr. Moynihan,

First of all, thank you for taking the time to read and respond to the following request. I have included as much documentation as I currently have available to save you the time of having to do a lot of research.

To begin with, I was laid off from Bank of America in January, 2009, after 21 years of extremely dedicated service. I was a GWIM employee that was one of many that had fallen victim to the business decisions of the bank. This layoff resulted in my being unable to afford my primary residence and we ended up having to complete a short sale to avoid foreclosure. We completed the sale of the property on August 25th, 2009 and Bank of America received the payoff funds on September 1st 2009. Please see pages 1-5 of the attached documents for verification. In addition, page 6 shows the letter from Bank of America acknowledging that my loan has been paid in full.

I assure you the story that follows is 100% accurate and true, however one can only think it to be fiction because it sounds so absurd. From the date the bank received my payoff, and all the way up to today’s date, my nightmare with Bank of America will never seem to end.

It began with the deficiency balance left after the short sale. I am fully aware this would happen and am also aware that I am responsible for that deficiency. The issue is that Bank of America relentlessly called me daily at 4:00am for weeks at a time. This is covered in Case number xxxxxxxx filed with the Office of the Comptroller of Currency. Every time they called, I simply asked if they would call at a more reasonable time and they never would. They only wanted to talk about collecting the deficiency at 4:00am. It was relentless and I finally sent an email to Ken Lewis at the end of September asking for relief and a phone call at a decent time to work out an arrangement. Well, I am sure this email was read by someone in executive relations and not Ken Lewis which I fully expected. The problem you will see comes from page 7 of the attached documents. They obviously had no idea how to read as their response had nothing to do with what I was asking about, and it was talking about my letter to some website I had never heard of in my life.
Since this got me nowhere fast I called executive relations to get someone to understand the issue. They forwarded me to Michelle McCall who handles the mortgage side of executive relations. She listened to my story and said she would handle it. Well, her way of handling it was to put a cease and desist order on my account and turn me over to a collection attorney. See page 8. I never said I was not paying; I only wanted a call at a decent time to work something out. Since these were robocalls, there was never a number I could call back on. After calling the bank again, I was finally able to have the file retrieved from the collection attorney and the representative and I have worked out a payment arrangement. It is very small but you have to remember, I am sending you part of my unemployment check and I am barely able to keep my head above water as it is.

While all of this has been happening with my deficiency balance, I am still receiving tons of mail from Bank of America in reference to my mortgage secured by the property I sold in August. It is October and they still had not paid off my loan. See pages 9 and 10.

Then I start receiving these letters telling me that I do not have insurance and unless I provide proof they will force place insurance. Well, I think the insurance industry frowns upon insuring items you do not actually own or have an interest in. See pages 11 and 12. Each time I received a letter, I would call the bank and try to get them to understand that I sold this property in August and they have had my payoff since September. I was told either that was not their department or some reps would actually look and verify that they did in fact receive my payoff check in September and would open a case to get it resolved. I probably had a total of 10 cases opened from my calls just to get someone to clear this loan off the books and it has still never happened. All of those cases fell into some black hole never to be seen again.

The next wave of mailings about my loan that was to be paid off 3 months earlier started again. This time they were more upsetting than ever. I was now receiving legal notices telling me I owed $423,572.92. See page 13. Can you imagine, after closing on this property in August, now in November I am receiving threatening legal notices knowing that you have been in full receipt of my funds this entire time. Can you imagine my level of frustration and grief over this issue, knowing that I have called on a weekly basis for months just trying to find someone to take ownership of the situation and get this loan off the books?
I was at my wits end when they started calling again day and night relentlessly. It was the robocaller and when the rep comes on the line they start telling me I owe them $25,000.00 in back payments and when can I send in the funds. What???? Are you kidding me I am thinking, and start to tell them the same thing I have told for months now that I sold this property, someone else lives there and has a mortgage on it. They would apologize and hang up. But then the next day the calls just keep coming and coming again. I had finally had enough of being called for payments and insurance so I faxed two short letters pertaining to these matters asking you to cease and desist. See pages 14 and 15. You can see I was quite frustrated with this ordeal. I thought relief was finally on the way as I did receive correspondence back confirming receipt of my letters. See page 16. The calls kept coming so I thought I would reach out to Michelle McCall again as I had her name from my previous dealing with executive relations. She looked and agreed my loan should have been paid off in September. I told her I was extremely frustrated that no one would take ownership of this issue. She said if I received more calls just have them call her. Well, obviously she did nothing because I have received 10 more calls since then, and every time I ask them to contact her they simply ignore the request and it goes back to some queue for them to start ringing my phone again day and night. The fact that my loan has still not been paid off leads to OCC case #xxxxxxxx

As the days go by and the phone keeps ringing, I am finally sent over the deep end when I open the mail and see that Bank of America has actually managed to force place insurance in the amount of $4,242.00 dollars on a property that I sold in August. See page 17. Can you tell me how it is possible to buy insurance on a property you no longer have an interest in? This leads to yet another OCC case #xxxxxxxx.

So, it is now January 17, 2010. A year since I have been laid off from the bank and 5 months since I sold my home that you cannot manage to remove from your books. Can you stop for a minute and think what it felt like for me to lose my home because I could no longer afford it when I lost my job? Can you imagine having to have your credit ruined via a short sale after being a banker for 21 years?

Well, let me tell you it sucks. But to make it worse, it will not go away. Every phone call and piece of mail I receive is just a reminder of what I have lost because I was laid off for doing nothing wrong. The emotional toll is astounding and Bank of America is doing everything possible to keep it going.

I have been seeking legal advice as to what course of action to take next, but it will take awhile. I simply do not have the funds to hire an attorney yet to pursue this matter. I went from earning $100,000/year to $100.00/week. I really have nowhere else to turn but to you and to the media. I have sent this story to all of the major news networks in hopes of someone hearing my plea for assistance. This story sounds so absurd that you would think it cannot be true. I am just one man, but I wonder how many others you have done this to? I will tell you the same thing I told the story editors,” I spent 21 years doing my due diligence for the bank and then I get laid off because they did not do theirs.”

In closing, I am asking you to please take ownership of this issue and finally clear this loan off of your books. As stated earlier, I am paying a very small amount to you monthly to help cover my deficiency balance left from the sale of this home. I will never recoup the funds I once earned and will have to go back to school to earn 1/3 of my previous salary. If there is any way you can forgive this deficiency it would be greatly appreciated. I would also ask to have our credit restored back to normal in relation to the 2 mortgages surrounding this short sale. This is the only derogatory item I have and my credit has always meant a great deal to me. A charge off has killed everything I have worked so hard to maintain.

Thank you for your time and I look forward to your response.

Sincerely,

Vince K.

Source: http://consumerist.com/2010/02/ex-employee-cant-get-bofa-to.html