September 21, 2014

Facing Up to Foreclosures

 

What happened to the American Dream?

Homeowners are losing their homes and facing eviction notices in the combined area of Malibu/Topanga. More than 250 homes are behind in their mortgage payments as of March 20.

Average American home prices have plunged 34 percent from their peak in April 2006 as of the most recent reading in December 2011.

The U.S. housing market has recently started to improve but is still far from pre-recession levels.

Sales of U.S. existing homes rose 4.3 percent in January 2012, reaching the highest pace since May 2010, according to the National Association of Realtors.

Many first-time buyers have gotten the message and are opting for a more affordable home, even when they qualify for higher loan amounts.

To make a bad situation worse, there are attorneys who have found a way to capitalize on the housing crisis. No surprise there, but homeowners need to be careful before entrusting their hard-earned money to lawyers as they attempt to modify their loans.

What appeared at first as a reasonable solution, home loan modification turned out to be easily manipulated by banks. Even when they agree to a modification they will often tack the outstanding interest onto the end of the loan, which lowers your payment only temporarily. Read the fine print when you get your modification — if you get it. Many applicants have been unsuccessful in obtaining one.

Finding the Right Resources

What’s a homeowner to do? There are a number of resources available for those trying to modify their loans, refinance or avoid foreclosure:

The Neighborhood Assistance Corporation of America (NACA) (www.naca.com) is a non-profit community advocacy and homeownership organization with a tremendous track record of successful advocacy against predatory and discriminatory lenders, as well as providing the program in America with $10 billion in funding commitments.

Short Sales are an alternative to foreclosures and will free you of the debt. Oftentimes the banks will offer “Cash for Keys.” According to an article in Realtor Magazine, the Cash for Keys program is expected to become a more mainstream option for handling short sales, not just foreclosures. For example, Bank of America is piloting a program in Florida that will pay up to $20,000 to short sellers, as well as forgive their loan deficiency.

Making Home Affordable (http://www.makinghomeaffordable.gov) is a government program that offers a range of solutions that may help you refinance and take advantage of today's low mortgage interest rates; reduce monthly mortgage payments; get mortgage relief while searching for re-employment; get help when you owe more than your home is worth; and avoid foreclosure when homeownership is no longer affordable or desirable. Some people have been successful but not enough.

The Alliance of Californians for Community Empowerment (http://www.homedefendersleague.org/) is a statewide community organization working with thousands of members to help ordinary citizens organize and take action.

HOPE LoanPort® (http://www.hopenow.com) is a web-based tool that streamlines home retention applications on behalf of homeowners at risk of foreclosure or struggling with their mortgage, allowing housing counselors to efficiently transmit completed applications to mortgage companies. It eliminates lost paperwork and allows for a faster decision on a homeowner’s application.

Rally to Protect The American Dream, hosted by the National Association of Realtors (http://www.realtor.org/government_affairs) that invites realtors to attend this rally on May 17 in Washington, DC.

The HARP Program (http://harpprogram.org/) is for those whose loans are owned by either Fannie Mae or Freddie Mac. If you’ve been told you don’t qualify, you might be able to refinance your home even with a low credit score and no equity. The Harp II Program requires that the homeowner be two months behind with their mortgage payments, but don’t stop making payments to qualify. Speak with a lending professional before making that decision. Banks have been known to foreclose with little notice.

Occupy Foreclosures

Occupiers have expanded direct action by moving into bank lobbies and people’s homes that are on the brink of eviction to “convince” banks that loan modification might be a better alternative to foreclosure.

The Topanga Peace Alliance (www.topangapeacealliance.org) has joined forces with the Occupy movement (http://occupyourhomes.org) in an effort to help homeowners. The Occupy Wall Street movement and homeowners around the country are coming together to say, "Enough is enough" and demanding banks negotiate with homeowners instead of foreclosing on them.

By taking direct action and occupying the home, some banks have reconsidered, as in the case of Iraq war veteran Brigitte Walker in Atlanta, GA, on Dec. 6, 2011. At the end of that first week, JPMorgan Chase, which owns her mortgage, began discussing with the activists and Walker the possibility of a loan modification. Chase’s modification offer became official. The offer, Walker told The Huffington Post, resulted in hundreds per month in savings. Before Occupy Atlanta set up its tents on her lawn, Chase had set an eviction date for Jan. 3. Now, Walker gets to stay in her Riverdale, GA home.

If you or someone you know is struggling to make their payments, or they’ve tried a loan modification or to refinance and been rejected, try one of the many grass roots organizations, such as Occupy Los Angeles and the Topanga Peace Alliance.

Author's Note

One of the hardest parts of my job as a realtor is working with clients who are losing their homes. Sometimes it seems as if it’s harder for me than for them! By the time they reach me, and we are discussing a short sale, they seem to have “let go” and there is a sense of freedom or resignation. When I show prospective buyers a bank-owned (REO) or foreclosed home, the energy in the house remains. I feel the remnants of a loving family, of holidays and family gatherings and a connection to community and neighbors. As I drive through my community, I see homeowners packing, eviction notices posted on vacant houses and properties under renovation for a quick sale. It seems as if all of us know someone who has been affected.