Event Focuses on Stabilizing Homeownership after Foreclosures in California

First Time Homebuyers Losing to All Cash Investors

Street Corner in San Jose, California

Editor’s note: This is post #1 in a two-part series.  You can read part 2 here.

By Sean Coffey, Program Manager, Foreclosure Help

The California Housing Consortium recently sponsored the 1st Annual  Homeownership Forum.  The theme for the day was “Stabilizing Homeownership and Communities in the Post-Foreclosure World” and panelists and participants discussed current efforts to repair the housing market, while creating and retaining affordable housing.    To see the agenda and speaker slides, visit the CHC website.

Two themes emerged during the day:

1) While many potential homebuyers are ready (including first time homebuyers), engaged and excited to buy a home in the Bay Area, many of them are unsuccessful when they make offers right now because they are competing with all-cash offers from investors.

2) There is not one “single bullet” policy or program that will fix the housing market, but it will likely be a combination of programs, policies, and financing mechanisms, both from the public and private sector that will help the housing market to recover.

Repairing credit after an improper foreclosure?

One of the most interesting comments of the day came during a conversation with a fellow audience member when she asked me if there are any plans to assist homeowners with fixes to their credit reports if they were the victim of an improper foreclosure. I am not aware of this being included in the Independent Foreclosure Review, but it seems logical that if a homeowner’s credit was damaged because of an improper foreclosure, (and the bank admitted it was an improper foreclosure by paying compensation under the Independent Foreclosure Review), then the bank/servicer could also notify the three credit reporting agencies that the foreclosure proceedings were improper.

Upon receiving this information, the credit agencies could code the person’s credit report appropriately, and there should be a subsequent “bounce” in the person’s credit score, and a lower cost of credit for that homeowner.  Given the increased scrutiny that Experian, Equifax, and Transunion now face by the Consumer Financial Protection Bureau, this is an idea worthy of consideration, and could potentially restore some faith in the credit bureaus, who have faced criticism recently over errors in a substantial number of consumer’s credit reports.  (See our previous post on this topic: “New Report: 1 in 10 Consumers Have Incorrect Credit Score“)

FHA’s Role in “Healing” the Market

Carol Galante, recently confirmed as the Assistant Secretary for Housing/Federal Housing Commission, opened the day and cited the importance of FHA loans in helping to repair the market, with nearly four million FHA loans completed since the beginning of the crisis, with 80% of these loans made to first time homebuyers.

Galante is the FHA Commissioner, and she discussed efforts FHA is making or considering making to repair the market, including selling pools of loans where all of the loans are at least six months delinquent.  In this model, investors could purchase a pool of delinquent loans, and then work with homeowners to modify the mortgage to an affordable level.

She also cited FHA’s 203K loan, which allows homeowners to pay for repairs to a home using the mortgage that they are using to buy the home to also finance the repairs.  However, she noted that the current limit of seven homes could prevent non-profits from using the program, and suggested that lifting this limit could allow non-profits to use this loan more broadly.

Galante also touched on a few other hot topics, including whether pre-purchase counseling should be mandatory, and how to pay for it, and do it in such a way that it’s meaningful for potential homeowners.  Audience questions touched on a recent settlement where a bank disclosed that it had inappropriately given homeowners FHA loans (when they didn’t need them), as well as the difficulty that first-time homebuyers are having in competing against all-cash investors.

This is post #1 in a two-part series.  You can read part 2 here.

Related articles:

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit us: www.foreclosurehelpscc.org

Our housing counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org or send us an email: help@foreclosurehelpscc.org.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org.Nuestros consejeros puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

Nếu bạn là một sinh hoạt chủ sở hữu nhà ở San Jose hoặc Sunnyvale và đang đấu tranh với nợ nhà, xin vui lòng liên ForeclosureHelpSCC, một chương trình được tài trợ bởi thành phố San Jose và thành phố của Sunnyvale ở (408) -293-6000 hoặc truy cập trang web của chúng tôi: www.foreclosurehelpscc.org.

Nhân viên tư vấn của chúng tôi đã được HUD chấp thuận có thể giúp bạn đánh giá các lựa chọn của bạn, tìm hiểu thêm về các chương trình của liên bang và tiểu bang có thể giúp bạn với các vấn đề thế chấp của bạn, và sẽ giúp bạn tạo ra một kế hoạch phía trước.Xin lưu ý: Tất cả các nội dung trên Blog ForeclosureHelpSCC được cung cấp thông tin duy nhất và không nên coi là hợp pháp hoặc tư vấn thuế. Nếu bạn có bất cứ câu hỏi , xin vui lòng liên hệ với chúng tôi qua đường dây nóng: (408) -293-6000, hoặc truy cập vào trang của chúng tôi: http://www.foreclosurehelpscc.org hoặc gửi email cho chúng tôi:help@foreclosurehelpscc.org.

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Five Reasons Working With A Housing Counselor is Better Than “Going Alone”

By Aurora Olivares, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC

Did you call your mortgage company because you are having problems with your mortgage payment? If you live in the state of California you were given the phone number for HUD (HUD stands for The U.S. Department of Housing and Urban Development), a requirement under California law. (This requirement was included in Senate Bill 1137 which was passed in 2008 and is set to expire in January 2013).

If you called that number, you were likely referred to a local HUD approved agency where you can receive free housing counseling services. Many folks wonder about what the benefits may be to working with a housing counseling agency.

Here are my top 5 reasons to work with a housing counselor at a HUD-approved agency:

  1. Honest Advice: A housing counselor will help you by assessing your situation. We will talk to you about the good and the bad with an unbiased opinion, but we bring the background knowledge of the best practices and we uphold the national Industry Standards for Homeownership Education and Counseling. In addition, we have worked with many homeowners, banks, and servicers, and this experience means we know how to keep the process moving forward, and we know the programs that may help your situation.
  2. Explanation of bank letters: A certified housing counselor can help you dissect the terminology used in the correspondence issued by your lender and in the paperwork of the loan modification process. While a bank or servicer may say your loan is “going into foreclosure,” we can help you understand what the actual timeline is for foreclosure and how to look out for important things like a Notice of Default. Understanding letters from your bank or servicer can be especially beneficial for non-English speaking homeowners.
  3. Your Budget: A counselor will work with you to review your budget. Counselors can provide budget counseling and calculate your housing ratios so you understand your ability to afford your mortgage and explain how these same ratios could impact your eligibility for assistance. For example, a counselor can review your income vs. your housing expenses and explain to you how that will impact your eligibility for a program like Making Home Affordable.
  4. Communication with your Bank or Servicer: Have you submitted paperwork to your bank or servicer multiple times, or called your designated representative but were not able to speak to them? While these types of issues can’t be completely eliminated, a certified counselor may have a reliable contact with your lender or have an efficient method of submitting your documents which can help smooth out some of the bumps along the way during the lender’s review.
  5. Resources: We provide you with resources. Did your lender tell you if you were eligible for the Keep Your Home California program? (English Website for Keep Your Home California, Spanish Website for Conserva Tu Casa California) Were you advised if you are a good candidate for a reverse mortgage? Did your lender tell you about an up and coming program your county may be working on to aid homeowners in distress or where you could go to get the much needed repairs to your home? Odds are you were not told about some of the resources that are right in your own back yard. We are local, just like you and we know what programs are truly out there to help the community we live in.

Are you having trouble paying your mortgage and do you live here in San Jose or Sunnyvale California? If so, contact ForeclosureHelpSCC by telephone: (408) 293-6000, email: help@foreclosurehelpscc.org, or visit our website: www.foreclosurehelpscc.org.

ForeclosureHelpSCC is a program that is supported by the Cities of San Jose and Sunnyvale, and staffed by housing counselors from four local, HUD-approved counseling agencies. Our housing counselors can speak to you about what your options are if you’re having trouble paying your mortgage, including programs like Making Home Affordable, Keep Your Home California, the Independent Foreclosure Review, and private, in-house modifications offered by banks and servicers as well. Your housing counselor can work with you to develop a plan of action to begin dealing with the problem instead of ignoring it.

Remember, the sooner you start working with a housing counselor, the more options you will have to address your mortgage situation and potentially remain in your home.Time is not on your side, so pick up the phone and give us a call.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org

Nancy’s Nine Rules for an Effective Relationship With Your Housing Counselor

By Nancy Rueda, Housing Counselor at Asian Inc., one of the members of ForeclosureHelpSCC

Trying to find assistance during a difficult time with your mortgage may be overwhelming, but there are trained housing counselors who can help you learn about your options so that you can make an informed decision. Today I’m sharing a few tips that will help you get the most out of your time with your housing counselor.

1) Take notes – At a housing counseling appointment you will learn a lot of new information about mortgage assistance programs, and what your options are if you are having trouble paying your mortgage. As part of your appointment, we will also give you a handout that explains the foreclosure timeline and process in California. It can be really helpful to take notes so that you have something to refer back to after your appointment.

2) Bring questions to the appointment: Before meeting with your housing counselor, write your questions and bring them to your appointment. That way you won’t forget any important questions or concerns you have about your mortgage.

3) Arrive on time: Housing counselors are assisting a number of homeowners at any given time. By being on time, you can ensure that you get the full time allotted for your appointment with your housing counselor.

4) Share all important information with your housing counselor. There are two really important reasons for you to make sure you’re sharing all relevant information with your housing counselor. First, similar to a doctor making a diagnosis, a housing counselor needs all information about your mortgage, financial, and income situation so that they can do a thorough analysis and make sure you’re informed about all options available to help you. If you only provide them with half the information, then you may miss out on learning about all of your mortgage options. Second, if your housing counselor is advocating on your behalf with your bank or servicer, they need to be operating with the same information that the bank or servicer has in order to be an effective advocate for you.

5) Awareness: While friends and family members may have received a loan modification, each mortgage situation is different. The banks and servicers (and in some cases, an investor who may or may not approve of a modification) all have different programs and policies. This could mean that the same bank provides two very different modifications for two houses on the same street. Or, because of investors, the bank may be allowed to modify one mortgage, but not the other.

6) Documents, documents, documents: If you are submitting a request for a loan modification, you will be asked to provide a lot of documents to your housing counselor. Housing counselors can’t submit incomplete packages to the bank or servicer. By providing all of the documents at one time, you can make your case go smoother and it will be easier for your housing counselor to submit a package to the bank. If a housing counselor has to wait on documents, it can slow them down in submitting a package to your bank or servicer. In addition, during the time your housing counselor is waiting for “late” documents, the documents you already submitted may become out of date, and you will have to submit new ones.

7) Follow up with your servicer – After your housing counselor informs you that your workout packet has been submitted to your servicer, follow up with your servicer. Do not wait for your housing counselor to remind you. It’s suggested that you follow up with them every week and make sure to write down what was discussed, the date, time, the name of the person you spoke with and their ID number on your note book. If you are giving information to the bank or servicer, it should match the information that your housing counselor submitted in the package. If circumstances change (i.e. you get an increase or decrease in pay), let your housing counselor know.

8) Keep your housing counselor updated – There will be times when your bank or servicer will contact you directly and may request additional information from you. Don’t forget to contact your housing counselor and inform them of what was discussed or what was requested from you. If you had to fax documents to your servicer, send them to your housing counselor as well, that way they are aware of what was provided to your servicer.

9) Be patient, polite and proactive – As overwhelming as this process is, housing counselors are here to assist you in learning about your options, which may include a short sale, modification, or in some cases, letting go of the home and planning a successful “exit strategy.” Regardless of which path you decide to take, it’s a “team approach” and your active participation is important. Being patient, polite, and proactive will also be helpful in communicating with your bank or servicer, since you may have to be the messenger between different departments at your bank or servicer.

Have you worked with a housing counselor before? Do you have any comments or tips you would like to share?

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org.

Maggie’s Five Rules for Working with Your Bank or Servicer

By Maggie McCarthy, Housing Counselor at Project Sentinel, one of the members of ForeclosureHelpSCC.

1.Calling Your Bank or Servicer: When you call your bank or servicer, always be prepared with information the lender may ask from you. They will probably ask for your:

  • Loan Information; loan number, mortgage payment amount, property taxes, insurance.
  • The servicer or bank will also ask about your income, both gross- (before taxes), and net (after taxes).
  • The servicer or bank will also want to know about your other household expenses, including utilities, food, transportation, insurance, credit card payments, and any other debt payments that you have to make (for example, car loans, school loans).

2. Hardship: When discussing your hardship with your lender, be clear and to the point. They want to know the cause of your hardship, any actions you may have taken to help yourself (for example, cut out cable or reduced other bills), and what kind of help you are looking for from your lender. For example, if you were unemployed for three months but now have a new job (and can pay your mortgage), then you could ask them to add the past due amount to the balance of your mortgage.

3. Documents: If you are seeking a modification, remember that you are essentially asking them to write a whole new loan. While modifications can take time, there are some steps you can take to make the process go faster:

  • Provide all documentation requested;
  • Double-check that you have completed and signed all forms that they are requiring;
  • Make sure all of your supporting documents are up to date. You may have to update some documents like your pay-stubs every month.
  • If you write the loan number on every page of any documents that you are sending to the bank or servicer, it reduces the chance your documents will get lost.

4. Follow-Up: Once you submit all of the documents, follow up with your lender every week to 10 days on status of your request, that also shows that you are very interested in resolving the problem. Start a notebook, and make sure you write the name and ID number of the person you talk to each time, and what you discussed. While this can be a frustrating process, the bank person may be able to help you, so be nice to them, and you may even try and make friends with them. You never know how much power they have to help move your case forward.

5. Other Options: There are other options and programs available to resolve your housing problem, so ask your lender for other options available if you do not qualify for a loan modification. Always ask questions and never agree to anything that you don’t understand or sign any documents that you don’t understand. If you are being offered something, ask if they can put it in writing.

Do you have any tips you have found helpful based on working with your bank or servicer?

Remember: You don’t have to go through this process alone. If you have questions, give ForeclosureHelpSCC a phone call and we can set up an appointment to meet with you: 408-293-6000.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice.  If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org