No Documentation Loan Modification

On April 18, 2013, in Foreclosure, by Robbie L. Vaughn, Esq.

No Documentation Loan Modification

Fannie Mae and Freddie Mac to offer No Documentation Loan Modification Program

The Program

Fannie Mae and Freddie Mac will offer a simplified loan modification process. Beginning July 01, 2013, servicers will be required to offer borrowers who are at least 90 days, but not more than 24 months, delinquent on their mortgage a trial modification without requiring financial or hardship documentation.

If the homeowner makes three  timely trial modification mortgage payments, their mortgage will be permanently modified. Additionally, homeowners who provide documentation of their finances and hardship could receive “a modification with additional savings.”

The Eligibility Requirements:

“The loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners must be 90 days to 24 months delinquent, and have a first lien mortgage that is at least 12 months old with a loan to value ratio equal to or greater than 80 percent. Loans that have been modified at least two times previously are not eligible. Click on these links to see if your loan is owned or guaranteed by Fannie Mae or Freddie Mac.”  The program ends August 01, 2015.

Our View

This appears to be a good initial program.  This program has the potential to help many homeowners avoid foreclosure. While much remains to be seen, we do like the following aspects of the program:

  • No documentation– Many of our clients get frustrated and exasperated by the constant requests to provide the same documents over and over again.
  • No action required– Servicers will contact the homeowners directly. Homeowners will not have to hire a third-party to help them with the loan modification (equals more savings for the homeowner).
  • Length of trial modification– Three months is a reasonable amount of time. We have seen some trial modification go on for 6 months or more (this can be very stressful for the homeowner).
  • Investment properties are eligible.

Read the full press release here.

New York Foreclosure Defense Attorneys

We are here to assist you! Call (516) 858-2620 to schedule an appointment with the Law Firm of Vaughn, Weber & Prakope, PLLC.

Bank of America Reduces Mortgages!

On May 8, 2012, in Foreclosure, by John A. Weber IV, ESQ.

Bank of America Reduces Mortgages by Forgiving a Portion of the Principal.

For those of you who have not heard the breaking news, Bank of America has begun to forgive a portion of the principal on certain people’s mortgages. The NYT is reporting that “Bank of America has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each.” In a press release announcing the new practice, Bank of America claims to have developed this program under the terms of a settlement involving five major banks, the Federal Government, and 49 state attorneys general. This may mean that other banks will begin taking similar actions in the near future, but that remains to be seen.

In some instances, the reduced principal could end up lowering mortgage payments by approximately 30%. By forgiving a portion of the principle and lowering monthly payments, Bank of America is able to turn mortgages that would otherwise default into long-term performing mortgages. At the same time, this will allow many individuals to remain in their homes. Bank of America will be contacting about 200,000 potential candidates.

If you have any questions about mortgages, feel free to contact The Law Firm of Vaughn and Weber at (516) 858-2620 to speak with a foreclosure attorney. We would be happy to speak with you about this or other mortgage issues.

Bank of America’s Press release summarizing its new policy can be seen by clicking here.

The May 7, 2012 New York Times article by Natasha Singer can be accessed by clicking here.

*Contributions to the research and preparation of this blog were made by Jason Mays, J.D. (awaiting admission in NYS).


Home Affordable Refinance Program (HARP) changes

On October 25, 2011, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

Home Affordable Refinance Program

The Federal Housing Finance Agency has announced a series of changes to the Home Affordable Refinance Program (HARP). This is an effort to help some borrowers refinance their underwater home mortgage.

Borrower Eligibility:

  • The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to: http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET) https://ww3.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)
  •  The program will continue to be available for loans with LTVs above 80 percent.
  • Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months.
  •  Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.

Read more here.

For assistance with HARP questions, call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620.

Stop paying my second mortgage?

On December 13, 2010, in Foreclosure, by Robbie L. Vaughn, Esq.

Can you stop paying your second mortgage?

Sure.

Should you stop paying your second mortgage?

Maybe not.

The prevailing theory is that if your home is worth less than what you owe on your 1st mortgage it is highly unlikely that the holder of your 2nd mortgage will bring a foreclosure action against you.

Well, although it may be rare, we did have a homeowner come into our office this year whose 2nd mortgage was being foreclosed although his home’s value was less than the amount owed on the 1st mortgage.  Additionally, lenders can, and some will,  “sue on the note” (bring an action against you to recover the money you promised to repay them) rather than bring a mortgage foreclosure action.

On the brighter side, we have seen 2nd mortgage payments reduced by as much as 80% a month.  Also, some lenders are willing to accept as little as 10% of what is owed on the 2nd mortgage as full payment. Additionally, if bankruptcy is an option, you might be able to “strip off” a totally unsecured second mortgage by filing a chapter 13 bankruptcy (see filing bankruptcy to save home from foreclosure).

We are often asked about paying and not paying second mortgages. Our answer: We can not advise you without knowing your specific situation and considering the particular options available to you.  So, make sure you are fully informed before making a final decision.

As always, The Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in Mineola, NY.  You can Contact us at (516) 858-2620 to speak with an attorney.


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