Deed in Lieu of Foreclosure

On February 21, 2013, in Foreclosure, by Robbie L. Vaughn, Esq.

How can I do a Deed-in-lieu of Foreclosure?

Deed-in-lieu of Foreclosure- Occurs when the lender accepts ownership of the property in place of the money owed on the mortgage.

Basically, you simply sign over the property to the bank to avoid foreclosure.

Sounds easy, right? Not so fast!

Most lenders will require that the homeowner first attempt a short sale before they will even consider a Deed-in-lieu of foreclosure. Additionally, having multiple lenders can complicate things even further. We have yet to see a Deed-in-lieu accepted on a property with multiple lenders. Therefore, we don’t see Deed-in-lieu of Foreclosure as a viable first option for distressed homeowners.

However, things may be changing, we recently received a call from a client who has been asked, by their lender, if they are interested in completing a Deed-in-lieu of Foreclosure. We will have to see if this is an isolated occurrence or the new trend.

Call 516-858-2620 to speak with a foreclosure attorney. The Law Firm of VAUGHN & WEBER,  PLLC, is here to assist you!

Mortgage Forgiveness and Bankruptcy

On October 19, 2012, in Bankruptcy, Foreclosure, by Robbie L. Vaughn, Esq.

Bank of America mortgage forgiveness and bankruptcy

Recently we have written about Bank of America forgiving second mortgages and the National Mortgage Servicer Settlement. Many homeowners facing foreclosure are anxious to find out if their second mortgage will be forgiven by Bank of America.

Well, it appears that one pattern may have emerged. Many homeowners who have already filed bankruptcy are receiving letters stating that their 2nd mortgage will be forgiven. Great news, right? Maybe.  Some of these debtors are in active bankruptcy (chapter 7 & chapter 13). Some debtors have already received a bankruptcy discharge and are no longer personally liable for their mortgages. Other debtors have “stripped” their 2nd mortgages and BOA will likely receive much less than 100% of what is owed on the 2nd mortgage.

Not So Good

  • It appears that BOA may receive credit, against the amount it owes under the National Servicer Settlement Agreement, by forgiving mortgages they can could no longer collect or only collect a portion of. This may lead to fewer distressed homeowners actually benefiting from the Settlement.
  • There may be tax issues (the advice of a tax professional may be necessary).

Good

  • Distressed homeowners who are not in bankruptcy are receiving letters from BOA stating that their 2nd mortgages are being forgiven. This will make it easier for some homeowners to avoid foreclosure.
  • Debtors in bankruptcy who are paying back 100% of the arrears on their 2nd mortgages and their full 2nd mortgage payment have received notification that their loan is being forgiven. This could alleviate the need for a chapter 13 bankruptcy altogether.
  • Some homeowners may find themselves with instant home equity.

If you have any questions about this or other legal issues, call The Law Firm of Vaughn and Weber PLLC, at 516-858-2620, for a free consultation!

+This is not tax or legal advice.

Federal Trade Commission sues mortgage relief companies

The Federal Trade Commission recently filed three separate lawsuits against mortgage relief companies – Prime Legal Plans/Reaching U Network, American Mortgage Consulting Group, and Expense Management America.  According to the FTC’s allegations, these companies were fraudulently selling mortgage relief services.  The companies charged homeowners for various services that were supposed to reduce mortgage payments or otherwise relieve them of mortgage obligations.  In reality, the companies accepted payment without providing services.  Additionally, the companies violated other laws by, among other things, calling homeowners that were on the do-not-call registry, fraudulently claiming to be associated with government agencies, fraudulently claiming to be attorneys, collecting upfront fees, and claiming to be charities.

It is bad enough that these companies were charging distressed homeowners without providing services.  What’s worse is that, by convincing homeowners that their services would be effective, these companies prevented homeowners from pursuing legitimate services and defenses.

According to a recent press release, the FTC has filed more than 40 cases against fraudulent mortgage relief services since 2008.  This suggests that such practices might be quite common.  Homeowners should always be on guard against potential scams, and should gather as much information as possible about mortgage relief or other debt defense companies before making payments.

The Attorneys at Vaughn and Weber have experience in Loan Modification Negotiation and Foreclosure Defense.  If you have any questions about these areas and would like to schedule a free consultation, call our office at 516-858-2620 today to schedule a free consultation.

National Mortgage Servicer Settlement Progress

On October 2, 2012, in Foreclosure, by Robbie L. Vaughn, Esq.

National Mortgage Servicer Settlement Progress Report

We previously wrote about the 25 billion dollar National Mortgage Servicer Settlement and how it, supposedly, helps distressed NY homeowners.

The affected servicers are:

  • Bank of America: 877-488-7814
  • Citibank: 866-272-4749
  • Chase: 866-372-6901
  • GMAC/ALLY: 800-766-4622
  • Wells Fargo: 1-800-288-3212

The above servicers have agreed to provide at least $25 billion in relief to distressed homeowners, the 49 participating states, and the federal government.

Well, have they?

Joseph A. Smith, Jr., the Monitor of the National Mortgage Settlement, recently released a “Progress Report” that outlines  progress made by the five banks that are parties to the settlement. The Office of Mortgage Settlement Oversight stated the following in a recent Press Release:

“The report discloses that the banks have granted $10.56 billion in consumer relief to borrowers between March 1 and June 30, 2012. Additionally, first lien principal reduction trials were offered and begun for about 28,000 homeowners, totaling approximately $3 billion of potential relief,” said Smith. “This information is self-reported and has not been confirmed by the professional firms working with me. Further, it represents gross dollar amounts and cannot be used to evaluate progress toward the banks’ $20 billion obligation.”

In addition, the report provides an update on the banks’ implementation of the settlement’s servicing standards.

“As of July 5, the servicers reported to me that 56 servicing standards have been incorporated into their business processes,” continued Smith. “Implementation of the mortgage servicing standards outlined in the settlement can be an important contribution to reform of the mortgage finance system.

Our take: We find some of the language used and statements made in the press release somewhat vague and troublesome. Moreover, we have not seen much relief, under the Mortgage Servicer Settlement, for our clients facing foreclosure. However, it is our understanding that all the the new servicing standards must be implemented by October 3, 2012. Hopefully, we will see more help for distressed homeowners soon thereafter.

See the Press release here.
See the Progress Report here.

If you have any questions about this or other legal issues, call The Law Firm of Vaughn and Weber today, at 516-858-2620, for a free consultation!

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan