New Foreclosure Firms Getting a Foothold

Foreclosure Home

The worst of the financial crisis is over and the number of foreclosures is down sharply from only a few years ago, yet many of the mortgage firms, however, remain the same — Wells Fargo, Bank of America, JP Morgan Chase & Fannie Mae. The latest rankings, however, now include several smaller firms including Lone Star Funds, Penny Mac, Carrington (some of these firms were not even in existence when the crisis started in 2007).

Many of these newer firms bought soured mortgages at steep discounts and are now looking to profit by restructuring the loan terms and trying to get the borrowers to repay. And generally, the smaller firms have a better ability to modify loans because they are more flexible with less investor requirements. The new smaller firms are taking some risks that bigger banks are no longer interested in taking, but when the homeowner can’t repay the loan or qualify for a modification, the new firms and/or their loan servicers foreclose in more aggressive ways than the older, larger foreclosure firms. Fannie Mae and Freddie Mac are looking to sell thousands of distressed mortgages within the next year or two, and while the large banks still own the majority of these mortgages, count on the smaller firms to continue to catch up to them.

Leading Reverse Mortgage Lenders Fined for Deceptive Practices

Mortgage

The Consumer Protection Financial Bureau fined the 3 leading reverse mortgage lenders in January, 2017 for using deceptive advertising to sell reverse mortgages. The fines totaled $800k and the bureau ordered the company to stop using misleading ads, some of which dated back to early 2012.

A reverse mortgage is a type pf loan that is usually targeted towards older Americans. A reverse mortgage can be a good tool for a homeowner who expects to remain in the home for many years and continue to pay the taxes and insurance but as borrowers age, these payments can become surprisingly unaffordable. These television and print ads, however, are often marketed featuring reassuring celebrity spokesmen (Fred Thompson/ Tom Selleck). Revere mortgages ae loans that carry interest and fees and can look deceptively alluring but they usually are fraught with dangerous details. Reverse mortgages let borrowers, 62 or older, draw on the equity in their homes, and they can be useful for home owners who have little in retirement savings but have substantial equity. Borrowers can receive the funds in lump-sums, monthly payments or lines of credit and repayment is deferred until the borrower dies, moves out or sells the home.

In the advertisements, the companies promoted the loans as risk free, but the homeowners can easily default on these loans and lose the homes in foreclosure if they fail to make certain payments like property taxes, insurance or maintenance. That is what the CPFB was targeting when it levied these fines. The CFPB said that the companies were tricking consumers into thinking that they could never lose their homes through a reverse mortgage, a claim that the CFPB asserts is patently untrue. The companies did not admit or deny the allegations but they paid the fines.

Since its peak in 2009 the use of reverse mortgages has fallen dramatically. Only about 49,000 reverse mortgages were made between September 2015 and September 2016.

It May Be Time to Think About Refinancing Your Mortgage (Again)

House made of dollar bills

Due to shifts in global bond markets, the average interest rate on a 30-year fixed-rate mortgage was 3.49 percent on Monday, which is down from 4.2 percent a year ago. Therefore, it’s a good time to check the rate on your home mortgage because you might be able to save money from refinancing.

According to The New York Times, mortgage rates could even fall further in the upcoming weeks as banks begin to pass more of the savings from low rates in the bond market through to customers. Since refinancing makes sense when rates have fallen by a full percentage point, people who took out loans before 2010 or at the prevailing rates in 2013 and 2014 might see favorable economics for refinancing. Additionally, lower rates make it a good time for people to refinance if they want a different type of mortgage. In addition to talking with a mortgage broker or a banker, you can use this link to figure out whether refinancing might make sense in your situation. Unfortunately, as has always been the case, there is no way to know whether rates will pop back up or continue to drop.

Should I Buy or Rent A Home?

Mortgage calculator. House, money and document.

Deciding whether to buy a home or rent a home is a huge financial decision. Yet, some of the factors that go into this decision are difficult to account for in dollar terms.

First, for whatever reason, rental prices may skyrocket in a particular place so to avoid escalating rental prices, buying a home is a way of “locking in an affordable place to live.” If you rent, there is always a chance that the region you live in will attract a flood of people and high-paying jobs, resulting in rent increases.

Second, another factor that makes a case for buying over renting is that buying a home forces you to save money. More specifically, when someone buys a home with a standard mortgage, he or she gradually pays off the balance and as time goes on, this person will have less debt. Assuming that the value of the home is stable or rising, once the home owner hits retirement age, he or she could have a nice pile of cash savings by either renting or selling the house and moving somewhere cheaper.

Third, buying a home can give you certain tax benefits. For example, if you had plenty of cash and were deciding whether to rent or buy a home, you may be tempted to rent and invest in stocks and bonds. When you invest money in financial assets, however, you have to pay taxes on the returns that they offer. On the other hand, when you buy a home, the return it pays you (giving you a place to live, not interest or dividend payments), is tax free. Economists refer to this as “imputed rent” and it is truly a subtle yet important advantage to buying.

There are also advantages to renting over buying. For example, a fourth factor to consider is that a renter will not have to worry about the unpredictable costs of maintaining a home. A renter pays a set monthly payment covering the costs of repairs and maintenance while homeowners are faced with much more unpredictability, ranging from an urgent $2000 air-conditioning repair bill to a $15,000 roof repair. Overall, when deciding whether to buy or rent a home, it is important to weigh these factors carefully. While one should compare numerical factors such as monthly mortgage payments, closing costs, etc., it is also essential to examine these four factors that cannot necessarily be plugged into a calculator. For more information, click on this link.

Homeownership Obstacles

There are many obstacles that stand in the road to homeownership. Prospective buyers need to take many preventative measures to ensure their deal. A simple precaution a buyer can take is evaluating all financial information with their lender. Any surprises could disrupt the lending process. Another step to take would be not to make any major purchases when the deal is being closed. This is because lenders can recheck the buyers credit history right before closing, and any new credit obligations may cause for concern.

In today’s competitive market, buyers must obtain more than just pre-approval, but also obtain a loan commitment. A loan commitment is a guarantee that the needed money will be made available to the buyer. This commitment can help ensure the buyers success in this competitive house market.

Contact Shaffer & Gaier – Protecting Homeowner Rights

The law firm of Shaffer & Gaier protects the rights of those who are facing foreclosure or seeking mortgage modifications in New Jersey and Pennsylvania. To set up a free initial consultation, contact our office online or call our foreclosure hotline at 855-289-1660. Or call our office location in Philadelphia at 215-751-0100, or in New Jersey at 856-429-0970.

SoFi and Online Mortgage Lending

SoFi – How Millennial Usage of Online Mortgage Lending is Changing the Home Lending Landscape

A young couple each in their early 30’s found themselves buying a house outside of San Francisco. Being first time buyers, they searched for sources of financing on the Internet. Online they found a lender called social finance (SoFi). They received pre-qualification in 15 minutes and then got the documents for pre-approval and submitted a formal offer within a week. Because of SoFi’s simplicity, they were able to easily close on their new home.

Large groups of millennials are changing the mortgage industry because more and more lenders are using technology that enables borrowers to submit documentation online. This allows more non-bank start a blenders to compete in the mortgage industry and it also gets mortgage brokers out of the mix (who many blame on the crisis of the last decade) . Online lenders like SoFi are so appealing to millennials because of their online tools and fast closing times. Borrowers feel much more in control of their financial status due to the DIY system provided by online lenders. This freedom is what banks are unable to match.

Contact Shaffer & Gaier – Protecting Homeowner Rights

The law firm of Shaffer & Gaier protects the rights of those who are facing foreclosure or seeking mortgage modifications in New Jersey and Pennsylvania. To set up a free initial consultation, contact our office online or call our foreclosure hotline at 855-289-1660. Or call our office location in Philadelphia at 215-751-0100, or in New Jersey at 856-429-0970.

The Home Affordable Modification Program’s Paltry Lifeline

A Slack Lifeline for Drowning Homeowners

JULY 31, 2015 By GRETCHEN MORGENSON

“After Lucy Circe became disabled and could no longer work, she applied to Bank of America for a mortgage loan modification on her Vermont home. Over more than two years, starting in 2012, the bank repeatedly requested copies of documents that had already been provided, asked for proof that she was no longer married to a man she did not even know, and made other errors, like asking why Ms. Circe had indicated that she didn’t want to keep her property when she had actually told the bank she did….” READ MORE HERE.

Contact an Aggressive Foreclosure Defense Lawyer at Shaffer & Gaier Today

We provide a free initial consultation to anyone with concerns about foreclosure or who is involved in foreclosure proceedings. To schedule an appointment, call our foreclosure hotline at 855-289-1660 or contact us online. Evening and weekend meetings can be arranged upon request. We will travel to your home if necessary to meet with you.

Foreclosure Settlements for Pennsylvania Homeowners

We recently settled two contested cases involving a family home in Bucks County, Pennsylvania. The set of facts required that I file an action against Chase Bank in Federal Court in the Eastern District of Pennsylvania and it is my belief that the Federal Court litigation is what spurred the global settlement.

My clients had owned their home for nearly 20 years and always paid their own local property taxes. My client was out of town for three months tending to her elderly mother and they missed a tax payment by two weeks. They quickly made up the late payment, but when Chase found out that it was late, Chase took it upon itself and mailed its own tax payment to the township. This then caused a domino effect of confusion, but ultimately ended up in Chase charging my client an additional $20,000 for the next year of taxes (so Chase could hold it in reserve), even though my client was always ready, willing, and able to pay the taxes. My client spent hours and days on the phone with Chase trying to explain that it was a one-time occurrence and therefore was no need to surcharge her the $20,000. She got nowhere.

While my client was trying to work things out with Chase, Chase filed a foreclosure action in Bucks County Court of Common Pleas. I responded to that lawsuit and we litigated that case for about 18 months; at the same time, I filed a lawsuit against Chase for wrongful foreclosure, claiming that my client did not breach the mortgage contract, but rather it was Chase that did. We conducted depositions and engaged in extensive motion practice, but then Chase reached out with a settlement offer which reduced the principle balance on my client’s property by $235,000. Chase, however, required that my clients pay off the mortgage in full (this is called a short-payoff) and my clients are able to do that by securing other sources of financing.

We stipulated in the settlement agreement that Chase would file a mortgage satisfaction, which was done approximately 45 days after my clients paid off the loan.

Contact Shaffer & Gaier – Protecting Homeowner Rights

The law firm of Shaffer & Gaier protects the rights of those who are facing foreclosure or seeking mortgage modifications in New Jersey and Pennsylvania. To set up a free initial consultation, contact our office online or call our foreclosure hotline at 855-289-1660. Or call our office location in Philadelphia at 215-751-0100, or in New Jersey at 856-429-0970.

U.S. Supreme Court Finds in Favor of Homeowners

In 2007, a couple from Minnesota, Larry and Cheryl Jesinoski, refinanced their mortgage with Countrywide. Exactly three years later the Jesinoskis tried to rescind the loan by writing a letter to Bank of America Home loans, which purchased Countrywide during the housing crisis. This meant that Larry and Cheryl, through the Truth in Lending Act, had the right to cancel their mortgage as long as they did so within three years after the transaction was completed.

Yet, Bank of America tried to block the rescission and the Court of Appeals for the Eighth Circuit ruled in favor of the bank, stating that the borrower must not only give notice but also file a lawsuit within three years. However, on Tuesday Jan 13, 2015, the U.S. Supreme Court ruled in favor of the couple, with Justice Antonin Scalia interpreting the law, stating that it without a doubt requires only a notification of rescission within three years and not litigation. Please note that when a loan is rescinded, however, the homeowners often have to give the mortgage loan funds and fees back to the bank or lender.

Contact Philadelphia Foreclosure & Mortgage Modification
Attorneys Shaffer & Gaier

To set up an appointment, call our foreclosure hotline at 855-289-1660 or contact us online. Your first consultation is free of charge. Evening and weekend meetings can be arranged upon request. We will travel to your home if necessary to meet with you.

New Jersey Foreclosures Lead the Nation

South New Jersey Foreclosure Attorneys

As of November 2014, information released by the Mortgage Bankers Association indicates New Jersey leads the nation in foreclosures. For the most part, the foreclosure crisis that followed the 2008 financial meltdown has abated and returned to levels seen before the 2008 recession. In New Jersey, however, one in six home mortgages is either delinquent or in foreclosure. While the percent of mortgages in foreclosure or delinquent is slightly less than this time last year (8 percent and 7 percent respectively in November of 2013), New Jersey is still posting foreclosure rates substantially higher than the national average.

Why Foreclosures are Higher in New Jersey

Part of the reason why New Jersey’s foreclosure rate is so high at this time is due to how foreclosures are handled in New Jersey. Under state law, foreclosures must go through the courts, which inevitably prolong the process. Additionally, due to a near halt in foreclosure activity in 2011 after questions regarding allegations of abuse and fraud in the mortgage industry, the system now has to play catch up.

Interestingly enough, most of the troubled mortgage loans are ones that were made prior to 2007.  According to Mike Fratantoni, the chief economist for the Mortgage Bankers Association, 74 percent of delinquent loans were made before the beginning of the 2007 sub-prime mortgage crisis.

Mortgage Troubles? Contact Foreclosure Attorneys at Shaffer & Gaier

If you’re facing foreclosure or the bank has already initiated foreclosure actions against you, it’s important that you understand your legal rights and protections. In some cases, foreclosure can be avoided if you bank is willing to refinance your home. If this isn’t an option, short-selling your home can help you avoid bankruptcy and other unwanted financial complications.

To learn how we can help you, contact the foreclosure attorneys at Shaffer & Gaier today. We have offices in Haddonfield, New Jersey, Philadelphia, Pennsylvania, and Fort Lauderdale, Florida.

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