Las Vegas Mortgage Lender Calls Other Lenders To Action: Help With Note Modification

Aaron Gordon is a mortgage lender in Las Vegas. I don't know him, but I just read one of his posts and it inspired me to link to it. He is asking all mortgage lenders to do some pro bono work and help people who might be upside down in their mortgages by calling their lenders for them and asking for a note modification. Aaron's post is here. I found out about it through a post I wrote asking if the recent efforts by Save The American Dream could actually help (they are calling for a 2 year ARM moratorium).

Lou Tisler of NHSGC pointed out that people are reluctant to do it on their own. Aaron points out that instead of calling their original lenders, they are calling him and others like him to refinance. So he helps them. For free.

Read Aaron's post! I plan on calling all the lenders I know personally tomorrow and asking them if they are doing this. Peace Out - 3C

Cleveland Home Owners In a Bind Take Note: Neighborhood Housing Services of Greater Cleveland Can Help

Lou Tisler of Neighborhood Housing Services of Greater Cleveland (NHSGC) made an important point on my latest post on short sales. Many of us know we should 'call our lenders' before it's too late but we are still too timid or worried to do that. NHSGC can do the legwork for you.

His second important point was that you should never pay anyone to be the intermediary, to help you with your mortgage issues. Lou has sent me a press release on NHSGC and I'm going to post it here in it's entirety. Please call your lenders. Or please call Lou at NHSGC.

Ohio Housing Finance Agency Adds $3.1 Million
to Ohio NeighborWorks® Foreclosure Prevention Tool Box

New Fund is to Assist Middle Income Homeowners
Neighborhood Housing Services of Greater Cleveland Creates New Loan Product to Fight Foreclosures in Cleveland
Cleveland, Ohio – Neighborhood Housing Services of Greater Cleveland (NHSGC), part of the Ohio NeighborWorks® Foreclosure Prevention Initiative, will distribute $3.1 million in flexible grants from the Ohio Housing Finance Agency (OHFA). In combination with an investment of over $3 million from NeighborWorks® America, this is a much-needed foreclosure prevention boost in Ohio.
The OHFA grant will assist middle income homeowners and provide up to $3,000 in a zero percent deferred soft second loans to borrowers facing foreclosure, with a possibility of going up to $5,000 depending on the amount of the mortgage payment. Overall 12 organizations throughout Ohio will use the funds.
The OHFA funds, together with the previous award of $1.5 million from the Office of Housing and Community Partnerships (OHCP) and the NeighborWorks grants, are expected to enable the Ohio NeighborWorks® organizations to assist over 1,500 Ohio families avoid foreclosure.

“This is another tool in the toolbox that will help us rebuild Cleveland communities,” said Lou Tisler, executive director of NHSGC, the organization administering the OHFA funds. “We were missing a way to help people who are just getting by but are behind on their mortgage and on the verge of getting into trouble. Now NeighborWorks organizations can help more low- and middle-income borrowers, which is important because this problem is spreading into middle-income neighborhoods.”

NHSGC educates homeowners through financial literacy, homeownership education and counseling, working with the Homeowner’s™ HOPE Hotline -- 888-995-HOPE (4673) -- to connect homeowners at risk of foreclosure with HUD-certified counselors.

“OHFA generally focuses on first-time homebuyer products, so this is one of their first sustainability-focused products,” said Tisler. “Coupled with a refinance product they recently made available, OHFA is enabling NeighborWorks organizations in Ohio to develop the cutting edge products that will help all levels of homebuyers get out of this crisis.”

Sparked by 1978 legislation, NeighborWorks America created the NeighborWorks network of community development nonprofits charged with closing the homeownership gap; improving financial literacy; rebuilding and repairing properties; developing affordable multifamily units; and, using community development strategies to improve safety and build wealth. In 2007, NeighborWorks America will provide over $75 million in grants to its national network of 244 nonprofit organizations operating in nearly 4,500 communities.

The need for NeighborWorks organizations has never been greater. High quality, affordable rental housing is needed to build healthy and sustainable communities. Personal debt is rising among consumers. Mortgages are becoming increasingly complex and risky, which means homeowners are becoming progressively more susceptible to foreclosure. And, stubborn wealth gaps persist.
“As stewards of taxpayer dollars, NeighborWorks ensures our investments are working in ways that truly make a difference,” said NeighborWorks America Great Lakes District Director Paul Poston. “We thank Congress and our other private, philanthropic and public funders who make our work to empower consumers and strengthen neighborhoods possible.”
About Neighborhood Housing Services of Greater Cleveland
Neighborhood Housing Services of Greater Cleveland is not-for-profit community development corporation incorporated in 1975 to promote investment and revitalization of communities in Northeast Ohio As one of the original chartered members of NeighborWorks® America, a network of over 230 organizations working in nearly 4,400 urban, suburban and rural communities nationwide, the mission of Neighborhood Housing Services of Greater Cleveland is to provide ongoing programs and services for achieving, preserving and sustaining the American dream of homeownership. www.nhscleveland.org.

###

Lou Tisler
Lou Tisler, Executive Director
Neighborhood Housing Services
of Greater Cleveland
5700 Broadway Avenue
Cleveland, OH 44127
216.458.HOME (4663) ext. 12
216.458.4672 fax
Email: ltisler@nhscleveland.org

A Short Sale Could Save You From Foreclosure

Short Sales are a valid alternative to getting completely mired in the foreclosure process. The important thing is to not ignore notices from your bank or lender; call their collections department immediately and see what kind of alternatives you have.

I love it when someone explains the process so well that I don't have to. One of my favorite bloggers is a Realtor® in Minnesota and she explains the short sale issue perfectly here. Read what Bonnie Erickson has to say; it might help you avoid getting into a real mortgage fix. Peace Out-3C

Housing Trends: Maybe We Can Make Saving Money to Buy A Home Sexy

I saw it in the faces of some of my clients; it may have seemed exciting to be a part of the 'gold rush mentality' of no money down purchases: ' why wait and miss the boat, buy a house now.' Meaning, why wait until you have money saved for a down payment or even closing costs!

The truth is always much less sexy, taking the form of foreclosures and sherrif sales at the bleakest end of the spectrum; and too much financial stress even at it's best. You can read a few past posts on the foreclosure issues here and here and here. You can also follow Callahan's Cleveland Diary, since Bill is keeping track, seemingly weekly, of new foreclosures filed.

Out of these dark clouds may be some better news for the future. At least that is what is being reported in Crain's Cleveland this week. Shawn Turner wrote about banks/lenders seeing an increase in the number of fixed rate and conventional loans filed, with a downturn in ARMs and No Interest, and subprime loans. The banking officials interviewed said some key things, at least according to this article:

1) People are taking to heart the negative press about sub prime loans. The good news is that people are learning they "...need to read the fine print..." (quote from Cindy Balser of KeyCorp)

2) Fifth Third Bank says it's conventional loan applications are up to 74% of all loans written, compared to conventional loans encompassing 63% for all of 2006.

Another aspect of mortgage loans to consider: if you don't put 20% down, you will be spending money that does not count towards your Principal or Interest on the loan, but will still have to come out of your pocket. This is because of PMI (Mortgage Insurance) that is 'tacked on' to your monthly loan amount if you provide a down payment of less than 20%. I looked around and of all places found an article on MSN Money. But the source is fairly good: Kiplinger. A question and answer session from a consumer looking to buy a home and get a mortgage led to a pretty concise discussion of what PMI is all about.

I am not saying no one should get a sub prime loan. But it has to be better if more people are focused on actually saving money before they decide to purchase.

Some of my 2007 clients have talked about not being sure if they will be able to stay in Cleveland and put down roots....maybe they are recently out of grad school; maybe they have moved here to accept a job transfer. Could be a lot of reasons. I encourage them to talk to their mortgage lenders about the advantages of a 20 pecent down loan, helping to build equity more quickly. It's been gratifying that a few of my clients were already doing this on their own, planning for their home purchases, saving money. The Kiplinger discussion in Money puts it this way:

"In the early years, you aren't building any equity with the mortgage payment," Eisenberg says. "If the market changes or your personal circumstances change and you're forced to sell, you could lose money" if you made little or no down payment. The equity in your home can also give you an extra source of cash in an emergency."

Peace Out - 3C

Cuyahoga County Bank Owned Property Sales: Some are Now Upgraded by the Banks

The National news is abuzz with the 2006 figures for foreclosures which are out now. This is not news to us in NE Ohio since our figures have been public and discussed for some time. I wrote about it several times, for example, here.

The end result is that I wind up showing many more bank owned homes to buyers than ever before. With so many homes in almost every market in Northeast Ohio for sale, there is a lot to pick from. Yes, it's a buyer's market. As it turns out, banks are realizing they have to be competitive in the same way private owners who put their homes for sale are being competitive. This means it's now possible to find bank owned homes that have been upgraded.

An example: I have a client with a contract on a home in Cleveland. We had looked at about six homes, and one of them was owned by Fannie Mae (which means the foreclosure occurred on a government loan. After Fannie Mae took it over, they made significant improvements to the home: upgraded the kitchen with new everything including appliances. Stuccoed the garage; replaced the roof on both the home and the garage. They also upgraded the bathroom. This is not your stereotypical bank owned behavior. I guess some banks are realizing there are so many foreclosed properties for sale and in order to get theirs sold they are going to have to put money into it. This is a savvy move on their part. And it also means, if you are looking to buy a home you might not want to pass over the bank owned properties because they may be in better shape than you expect. So ask your Realtor® to add them to your search for a home. The benefit to you is easily seen. The benefit to the community is they sell. Win-win? Peace Out - 3C

Clues to the Foreclosure and Housing Bubble Mess

Many of us have spent time scratching our heads about the housing bubble and the foreclosure issue. Mortgage lenders themselves were not the only ones involved in creating this mess. For example, if you got an overvalued loan from a predatory lender, how and more importantly why did the appraiser sign off on that loan?

If you live in an area where housing prices skyrocketed, how did the homes continue to get past an appraisers eye at so much over the 'last home sold' amount?

This article by David Cho in today's Washington Post does not surprise me, probably will not surprise you. But it does give some specific insight, due to comments from a mortgage appraiser with a company called New Century, who talked about the pressure she and other apppraisers were under to look the other way and sign off on appraisals for 'bad loans.' Peace Out - 3C

Foreclosures: More Info on Possible Targets by Predatory Lending

The month of February had some poignant moments for me as a Realtor®. Early that month I was called by an out of town lender who had a website; he was trying to get a local contact to help a Cleveland resident save their home with a short sale (sell a home in order to avoid foreclosure, but at less than market value).

Unfortunately, the market value of this person's home was much less than they paid for it. You guessed it: predatory lending. And some complicit appraiser who helped the predatory lender sign off on the mortgage process. Before I found out I could not help this person, he had a friend call me. Then another person called. Before I knew it, over eleven people had sought me out to help them. One or two may have been able to just make enough money through a sale so that they could avoid foreclosure. But most of the homes were way over market value and there was no way to sell it and recoup....even if they sold the home themselves. It was the saddest month I have had in my professional career so far.

Today, on the News Net Five website, there was a recap of a law school Fair Housing seminar held at CSU. They heard from Housing Advocates and government leaders. Their conclusion is that three mortgage companies targeted minorities and that these lenders may have contributed to as much as 35 percent of the 15,000 foreclosures in our area last year. It makes me angry. This is a link to local Fair Housing groups. If you think you need them, please call them.

Also, don't forget, no matter where you live in NE Ohio, if you think you are in danger of losing your house if you don't take action...take action! Bellaire Puritas Development Corporation has their staff and people from organizations who can help direct you, hopefully help you find the light at the end of the tunnel. Their Foreclosure Workshop is Thursday.

FREE ANSWERS AND ASSISTANCE
on Thursday, April 26th
From 5:30pm to 7:30pm
at 14703 Puritas Avenue(use side entrance behind US Bank)

Peace Out - 3C

Ohio's 2006 Foreclosure Rates Jump 24% in One Year

The stats are "in" for 2006 on foreclosures and they are not going to make you happy. Depending on whether or not you use the measure of the Mortgage Bankers Assn. (which says we are first in foreclosures for 2006) or RealtyTrac (which says Ohio is 8th), the rise in precentages is mind blowing. The number of new cases rose 24% in one year. Policy Matters released their figures this week and in Cuyahoga County alone, there were 13,610 new foreclosures.

I was alerted to this in an article on Cleveland.com, written by Plain Dealer reporter Thomas Ott. I blogged before about the NeighborWorks program, and this article talks about a case involving Adjustable Rate (ARM) mortgages. A few years ago, while interest rates were about 5.5% on the National Level, people were getting ARMs for 10-14% interest rates.

Cuyahoga County Commissioners Dimora, Hagan and Jones issued a report (in pdf here) based on calls, meetings, public meetings and discussions. It's worth a read.

Folks, all I can say is, please contact one of these programs before it gets to the critical stage! It only takes about three months of missed payments for things to spiral out of control. And I have to say again, if the only way you can buy a home is to pay 13% interest rates when the going rate is 6.06)% (as of today), please wait until you can qualify for a much lower rate. The County Program is called 'Don't Borrow Trouble,' and if you have any inkling that you might have difficulty making your payments in the future, even for a few months, please call them at: 216-436-2000. There is also a United Way hot line and you can reach it by simply dialing 211.

Other relevant posts:
Professor Kathleen Engel discusses predatory lending
What to Look Out For: Avoid Predatory Lending

March 28th Follow Up: PD Reporter Ott has a very interesting follow up article you can read on Cleveland.com. It deals with a law proposed in Ohio to require lenders who foreclose on homes to file their deeds - maybe I am naive, I didn't know this was not required! I know Title technically does not transfer to new owners until the title is filed at the Court house...at least for us 'regular' people. This is a great article dealing with the thorny issue Cleveland has had to deal with, tracking down owners of long abandoned buildings, collecting taxes, etc.

Peace Out - 3C

Helpful Phone Numbers?

Browsing through any of the neighborhood redevelopment corporation websites is uesful. Today I was on the Kamms Corner site. They have a terrific list of useful telephone numbers -

Kind of a timely link here, since we have talked about predatory lending which can lead to foreclosures.

And maybe the best link; if you are worried about making your mortgage payments, DO NOT WAIT until it's too late to try to resolve the issue. Two things to do.

• Don't let letters from your lender sit unopened. talk to them!


• Call the Cuyahoga County Foreclosure Prevention Office

Peace Out - 3C