Patti's Blog - Advocate for Elders, People with Disabilities and Their Families

Schuette Informs National Mortgage Settlement Monitor About Concerns with Banks' Settlement Compliance

Excerpt from:(click for full article)

 

Attorney General Bill Schuette today sent a letter to Joseph A. Smith, Jr. head of the Office of Mortgage Settlement Oversight to alert him to concerns that certain terms of the National Mortgage Settlement are not being met by the banks that signed on.

"As we continue to sort through the aftermath of the mortgage foreclosure crisis, Michigan homeowners can rest assured that we will hold all five banks accountable to the terms of the national morgtage settlement," said Schuette.

"I take any violations of the requirements of the settlement very seriously, and as a member of the monitoring committee, will work closely with all involved to ensure that the settlement is properly enforced," noted Schuette in the letter to Smith.

Surviving Spouses Challenging Reverse Mortgage Rules Get Their Day in Court

Excerpt from: AARP Foundation (click for full article)

 

Reverse mortgages — in which a homeowner receives money for a home’s equity, each month incurring a slightly greater debt to be repaid when the home is sold — can sometimes help older people on fixed incomes. Available to those over age 62, the loans are regulated by the U.S. Department of Housing and Urban Development (HUD).

The amount of equity that can be drawn from a reverse mortgage is a function of the value of the property and the age of the youngest borrower: the older the borrower, the higher the loan. Evidence has been mounting that couples considering reverse mortgages are often persuaded into taking the younger spouse off the deed. They report that mortgage brokers (whose fees are based on loan amount) assured them that this would be financially beneficial and could later be undone. What the couples do not understand is that the lender can call the mortgage due and foreclose after the death of the borrower. As a result, surviving spouses of reverse mortgage borrowers are faced with foreclosure once the borrowing spouse dies.

The federal reverse mortgage statute should provide protection: It states that the mortgages may not be called due and payable until both spouses have died or the home is sold. In addition, HUD regulations provide that, after the death of the borrower, the property can be sold for the lesser of the mortgage balance or 95 percent of its current value.

The Home Affordable Refinance Program Gets an Overhaul: How It Could Help You

Excerpt from: Housing for Seniors (click for full article)

 

In 2009, President Obama introduced the Home Affordable Refinance Program—an attempt to help a predicted three to four million people struggling with their mortgages to refinance. However, as of July 2010, only about 390,000 people had had their mortgages permanently altered under the program.

Recently, the government implemented new changes in an attempt to expand the program’s eligibility. The most recent overhaul, enacted in November 2011, is designed to help homeowners refinance their mortgages to today’s interest rates, which are currently around 4%--approximately 70% of people behind their mortgages in the US pay 5% or more in interest.

Homeowner Can't Reopen Voluntarily Dismissed Foreclosure Case, Despite Claims Bank Falsified Docs: Court

Excerpt from: Huffington Post (click for full article)

 

Florida's highest court has ruled a homeowner cannot re-open a voluntarily dismissed foreclosure case despite allegations that the bank falsified documents, giving a win to banks in a closely watched ruling that could have affected thousands of cases in a state hit hard by the foreclosure crisis.

The Florida Supreme Court had been asked to decide whether banks accused of using fraudulent documents to file foreclosure lawsuits could dismiss the cases, and then later re-file them with different paperwork.

On Thursday, the Florida Supreme Court decided that it could not, unless the plaintiff - in this case, the bank - had obtained some kind of affirmative relief, and the dismissal had kept the fraud from being remedied by the court.

However, the court acknowledged the "multiple abuses that can occur from fraudulent pleadings," and asked Florida's bar association to review civil litigation rules to determine if changes should be made to address the issue.

A lawyer for Pino, Amanda Lundergan of the Ice Firm, said she believed the ruling "will have the unintended effect of encouraging underhanded tactics" by plaintiffs in foreclosure and other cases.

Reverse Mortgage Payments and Court-Ordered Judgments

Excerpt from: AARP (click for full article)

 

Despite Wells Fargo's argument, the court found that a reverse mortgage is "unique" and can be distinguished from a typical loan because Ewing is not liable for repayment. Assuming he does not breach any reverse mortgage provision or move, Ewing's obligation to repay Wells Fargo is satisfied when the bank takes ownership of the house after his death.

Finally, the court said that the law favors giving creditors like the Camerons assistance enforcing their claims, especially where a debtor has the means to pay but is trying to evade that obligation.

Anne McHugh, an attorney for the Camerons, cautions homeowners to be "hyper-vigilant" if they get a reverse mortgage. Consult with a financial adviser, attorney or accountant. Be aware that a reverse mortgage may not shield your home equity from creditors, despite what a bank might tell you.

Reverse Mortgage Features and Terms Summary

Excerpt from: Beth's Reverse Mortgage Blog (click for full article)

 

There are many loan documents with the reverse mortgage (all mortgages actually) and it’s hard to remember all the details through the life of the loan.  To help you have a better understanding initially as well as be a reference in the future, this article summarizes the reverse mortgage features and terms.

• A reverse mortgage is a mortgage or lien against your property allowing you to use the equity in your home.
• Monthly mortgage payments are not required.
• Through FHA, the Home Equity Conversion Mortgage (HECM) is a government insured program and regulated by HUD.
• As a loan against your property, the funds are not considered income so Social Security and Medicare are not affected; and generally SSI and other public benefits are not affected; Medicaid can also be received under certain situations – consult with legal services for your situation.
• Generally the funds received are considered tax free – consult your tax advisor regarding your situation.

Mortgage-modification program still has a long way to go

Excerpt from: The Washington Post (click for full article)

 

“The hardest thing for me is working with the older clients who have owned their homes for years,” Williams said. “Whoever did their mortgages took advantage of them. And there is no way for many of them to undo what was done to them.”

In response to the housing crisis and the onslaught of foreclosures, the federal government established the Making Home Affordable Program, which includes several strategies to help financially distressed homeowners. Recently, the National Consumer Law Center took a look at one of the largest of those strategies, the Home Affordable Modification Program, or HAMP, which was launched in 2009.

Under HAMP, borrowers can apply to have their monthly mortgage payments lowered so they’re more affordable over the long term. Lenders and mortgage loan servicers don’t have to participate. But to encourage modifications, participating servicers are provided with financial incentives to modify loans to help homeowners avoid foreclosure.

New Rules Issued For Mortgage Servicing Companies

Excerpt from: NPR (click for full article)

 

Last week, the Consumer Financial Protection Bureau unveiled new rules for mortgage lenders. On Thursday, it releases new rules for the companies that service those loans.