Standard Solutions To Mitigate Mortgage Default and Delinquency

Standard Solutions To Mitigate Mortgage Default and Delinquency
PENNSYLVANIA HOUSING FINANCE AGENCY Standard Solutions To Mitigate Mortgage Default and Delinquency Presented by the Pennsylvania Housing Finance Agency

Standard Solutions to Mitigate Mortgage Default and Delinquency
Important If your agency is viewing this webinar in a group setting, please each counselor’s name to or so each counselor may receive credit for attending today’s presentation. Utilize the “Chat Box” to write your questions or comment to the presenter only – questions may be answered during or at the end of the presentation.

PENNSYLVANIA HOUSING FINANCE AGENCY
Mission Statement In order to make the Commonwealth a better place to live while fostering community and economic development, the Pennsylvania Housing Finance Agency provides the capital for decent, safe, and affordable homes and apartments for older adults, persons of modest means, and those with special housing needs.

Course Agenda Training Goals Meet The Players PHFA Mortgage Servicing Departments Mortgage Loan Products The Counselor’s Role Strength Based Counseling The Three Step Process Know Your Options The Foreclosure Process Mortgage Foreclosure Scams Bankruptcy The National Mortgage Settlement Relief Bank of America Advocacy Team Resources

Training Goals To maximize the counseling services using preventive solutions Increase public awareness through the implementation of education Adopt and enforce the National Industry Standards for Homeownership Education and Counseling to ensuring consistency in the quality of preventive foreclosure techniques.

Meet the Players Primary Market – Banks, savings associations, credit unions, housing finance agencies, mortgage brokers and mortgage bankers Secondary Market – Financial markets such as Fannie Mae and Freddie Mac where mortgages are sold shortly after they are made Mortgage Originator – The bank or lending institution that makes the original mortgage to the mortgagor Mortgage Holder – Owns the mortgage and has the right to initiate the foreclosure action Source: Foreclosure Prevention Counseling: Preserving The American Dream

Meet the Players Mortgage Servicer –Responsible for customer service which includes making collection calls, collecting mortgage payments, managing the escrow related matters and providing and processing payoffs Government Mortgage Guarantors – Mortgages that are insured by the federal government. The guarantors protect against any risk of default Federal Housing Administration (FHA) Rural Housing Services (RHS) Department of Veterans Affairs (VA)

Mortgage Servicing Departments Escrow Department – Collects and pays taxes and insurance premiums Collection Department – Makes collection calls and mails default notices to homeowners Loss Mitigation Department – Negotiates workout plans or alternatives to foreclosure Bankruptcy Department – Tracks and monitors the bankruptcy cases Foreclosure Department – Tracks the foreclosure process Real Estate Owned Department (REO) – Assumes all responsibilities of ownership for the property after sheriff sale

Mortgage Loan Products Generally, there are 2 categories of mortgages: Fixed-rate Adjustable-rate All mortgages have 2 factors: How predictable the mortgage payments are How low or affordable the mortgage payments can be

Mortgage Loan Products Fixed Rate Mortgage – a mortgage loan where the interest rate remains the same throughout the term of the loan Hybrid Mortgage – a combination of a fixed rate mortgage and an adjustable rate mortgage Adjustable Rate Mortgage – a mortgage loan that has an interest rate that periodically adjusts based in a variety of indices

Mortgage Loan Products Option ARMS - the “pick-a-pay” or “pay-option” is typically a mortgage with an added flexibility of making 1 of several repayments monthly Reverse Mortgage - a mortgage available to homeowners who are 62 years and older and wish to use the equity that has built up in their property 2-28 Mortgage - 30 year adjustable rate mortgage that has a fixed interest rate for the first 2 years and then is fully adjustable for the remaining 28 years

Mortgage Loan Products 3/27 Mortgage – a 30 year adjustable rate mortgage that has a fixed interest rate for the first 3 years and then is fully adjustable for the remaining 27 years Interest–Only Mortgage – a mortgage where the mortgagor only pays the interest on the principal balance Convertible Mortgage – a mortgage that starts as one mortgage product (which can either be an ARM or a fixed rate mortgage) and turns into another

Mortgage Loan Products Balloon Mortgage – a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity of the mortgage. The final payment is called a balloon payment because of its large size. Graduated Payment Mortgage – is a flexible mortgage with low initial monthly payments which gradually increases over a specific time frame

Mortgage Loan Products Vendee Mortgage – a mortgage product offered to purchase VA Real Estate Owned properties. The mortgage is available to both veterans and non-veterans. The homebuyer does not have to be a veteran to qualify. Jumbo Mortgage – a mortgage loan in an amount above the conventional conforming loan limits set by Fannie Mae and Freddie Mac

Mortgage Loan Product Buydown Mortgage – a mortgage which enables the buyer to get a lower interest rate by paying a lump-sum fee or by paying a fee that is financed over the life of the loan There are 2 types of buy down mortgages: Temporary – lowers the interest rate and monthly payments for the first few years Permanent – lowers the interest rate for the life of the loan

Mortgage Loan Product 80/20 or 80/10/10 Mortgage – often called “piggyback” mortgage. Two different mortgages made at the same time. The 1st mortgage is made for 80% of the purchase price (down payment) and any amount that is not financed becomes the 2nd mortgage 103% or 107% Mortgage – a mortgage that does not require any up-front cash. The loan covers 100% of the appraised value and provides the mortgagor with an additional 3% or 7% in cash

The Counselor ’s Role Underst and the mortgagor ’s object ives and needs What is the homeowner trying to accomplish? Establish Reason for default Have homeowner write a letter of Circumstance/Hardship Letter? Work with homeowner to make realistic choices Are the homeowner’s goals realistic? Discuss ALL available options Determine the appropriate option

The Counselor ’s Rol e Determine the time constraints Identify any deadlines, especially if there is a pending foreclosure sale date Assist homeowner in preparing a spending plan Make sure the plan identifies ALL debts. Consider ways to i ncr eas e homeowner ’s inc ome or a vai la ble cas h Homeowner needs to find other sources of income Assist mortgagor in reducing their debt Consider repayment plans

The Counselor ’s Role Get EXACT totals on arrears Follow up with the homeowner’s lender Request delays or an extension Stay in contact with the homeowner’s lender Ask homeowner to set aside funds to prevent foreclosure Set aside and save funds Start paperwork if homeowner chooses to save home Secure all documentation

The Counselor ’s Role Manage Expectations Up Front – explain to the client that your organization works in a solution-oriented way Establish and build rapport early on – this is necessary to create a positive working relationship. Look for and acknowledge qualities that the client already has to help them recover Get clarity on the problem – what brings the client in today. What options have been tried that are useful?

The Counselor ’s Role Acknowledge the gravity of the situation – do not dwell on the problem. Say things like “I understand that you are going through a difficult time, and I am here to help you find ways to get through this” Set goals – what does the client want to be different as a result of their counseling session Collaboratively solve problems – seek to understand what has happened from the client’s point of view, explain your observations, and figure out options to move forward

The Counselor ’s Role Practice self-management – set expectations for how you want your counseling session to move forward. Be non-judgmental and calm. Be prepared to go into difficult conversations. Be aware of and maintain professional boundaries –Do NOT provide advice or other services that require a license or certification. Ask questions – encourage and empower your clients to tap into their creativity.

Strength Based Counseling Inspire with Praise Empower with Education Explain the Process Identify Options Guide Through Problem Solving Restore Hope and Confidence

The Three Step Process (1) Data Gathering Initial Face-To-Face Meeting with client In-take process What is the reason for the default/delinquency? What are the client’s intentions/goals? What is the loan type? What is the status of the mortgage? Get client to sign the Letter of Authorization Get client to write a Letter of Circumstance/Hardship Letter

In-take Form Close-Out Form 9/20/16

The Three Step Process (2) Analysi s of Homeowner ’s Sit uat ion Discuss client’s affordability Pull credit report Create a realistic action plan Develop a realistic budget Discuss curable and incurable options

The Three Step Process (3) Development of An Intervention (Action) Plan Selection of the best loss mitigation option Gather supporting documentation Write a cover letter Explain the homeowner’s situation Include any available cash reserves Include a copy of the Letter of Authorization Send all supporting information to the lender

Know Your Options

Know Your Options - Curable Forbearance Agreement - an agreement offered by the lender to temporarily suspend or reduce the monthly mortgage payments for a specified period of time Have time to improve the homeowner’s financial situation and get back on their feet Less damaging to the credit score than a foreclosure Stay in home and avoid foreclosure

Know Your Options – Curable Fannie Mae Unemployed Forbearance Agreement – eligible homeowners who become unemployed may qualify for this option which is an agreement offered by the lender to provide forbearance to unemployed homeowners who are a having financial hardship due to unemployment or imminent default May receive up to 6 months of relief and special consideration is given to homeowners who require 12 months of relief Prohibits the lender from proceeding with a foreclosure during the forbearance period

Know Your Options – Curable Military Forbearance Agreement - an agreement between a homeowner and their lender to temporarily suspend or reduce their monthly mortgage payments during a specific period of time which can continue for the entire term of the homeowner’s active duty and for another 3 months after the homeowner comes back home. This is an option for homeowners who are facing financial hardship due to injury or the injury of a spouse as a result of being in the military

Know Your Options – Curable Military Forbearance Agreement (Cont.) Lowers or temporarily suspend the monthly mortgage payment for up to 6 months, giving the homeowner time to improve their financial situation and get back on their feet No adverse credit reporting during the forbearance period Stay in their home and avoid foreclosure

Know Your Options - Curable Modification - an agreement between the homeowner and the lender to change the original terms of the mortgage (payment amount, length of loan or the interest rate), etc. May reduce the monthly mortgage payments to a more affordable amount Less damaging to the credit score than a foreclosure Stay in the property and avoid foreclosure

Know Your Options - Curable Home Affordable Modification Program (HAMP) - an agreement that is designed to help homeowners impacted by a financial hardship. The loan is modified to make the monthly mortgage payment no more than 31% of the gross (pre-tax) monthly income. The mortgage must be owned by Fannie Mae or Freddie Mac or serviced by a participating lender. The modification permanently changes the original terms of the mortgage. Resolves the delinquency immediately Reduce the monthly mortgage payments to a more affordable amount Gives the homeowner a new start Less damaging to the credit score than a foreclosure

Know Your Options - Curable HUD Partial Claim/Advance Claim – an option where the lender will advance funds on behalf of the homeowner in an amount necessary to reinstate the mortgage. Resolves the delinquency Can catch up on past due mortgage payments Homeowner must execute a Promissory Note and a Subordinate Mortgage

Know Your Options - Curable Refinance – a new loan with either new terms, interest rate or monthly payment that completely replaces the existing mortgage. Payments are more affordable No negative activity on the credit report Resolves the delinquency immediately Stay in the home and avoid foreclosure

Know Your Options - Curable Home Affordable Refinance Program (HARP) – an agreement that is designed to help homeowners who may be ineligible for traditional refinance due to loss of value or they have little (or no) equity. The homeowner will receive a new mortgage with: New terms New interest rate New monthly payment

Know Your Options – Curable Home Affordable Refinance Program (HARP)(Cont.) The mortgage must be owned by Fannie Mae or Freddie Mac Payments are more affordable Stay in the home and avoid foreclosure

Know Your Options - Curable Reverse Equity Mortgage A form of equity release available to seniors aged 62 or older. It enables eligible homeowners to access a portion of their equity Homeowners draw the mortgage principal in a lump sum, by receiving monthly payments for a specified term, or by receiving monthly payments for as long as they occupy the home.

Know Your Options - Incurable Straight Sale – also known as a regular home sale, which involves selling the home for an amount that will pay off the mortgage. In a straight sale, the home may sell for more than the mortgage amount and the homeowner may make a profit Any money that the homeowner receives for the house sale (above the amount needed to pay off the mortgage) belongs to the homeowner Resolves the delinquency immediately

Know Your Options - Incurable Hardship Assumption (Assumption of Mortgage) – a qualified 3rd party (buyer) accepts liability for an existing debt(s) secured by the mortgage. The homeowner remains liable to their lender until the lender releases the homeowner from further liability Resolves the delinquency Get a new start Short sale/Pre-foreclosure Sale– selling the home for less than the balance remaining on the mortgage Eliminates the mortgage debt Avoid the negative impact of a foreclosure Requires the approval of the mortgagee

Know Your Options - Incurable Home Affordable Foreclosure Alternative Option (HAFA) –designed to help homeowners who can no longer afford their home avoid a foreclosure and resolve their mortgage debt. If the homeowner qualifies for HAFA, the homeowner will go a traditional short sale. If the home does not sell or the short sale is not approved, the homeowner may be eligible for a Deed In Lieu of Foreclosure. The loan must be owned by Fannie Mae or Freddie Mac. Financial assistance for relocation may be available. May be able to get another Fannie Mae mortgage in as little as 2 years.

Know Your Options - Incurable Deed in Lieu of Foreclosure – is a process where the homeowner voluntarily transfers the ownership of their property back to their lender in exchange for a release from their mortgage obligations. Eliminates the remaining mortgage debt. Avoid the negative impact of a foreclosure. May be eligible for relocation assistance in some cases. Start repairing their credit sooner than if they went through a foreclosure. Deed For Lease – is an option (for loans that are owned by Fannie Mae) that allows the homeowner to lease their home back after they completed a successful Deed In Lieu of Foreclosure from their lender. The lease term is up to 12 months and the monthly rent is based on the current rental rates for the area. Eliminate the remaining mortgage debt. Resolve the delinquency and avoid foreclosure. Stay in their home and neighborhood. Pay no security deposit.

Know Your Options - Incurable Cash For Keys - an agreement between the lender and the homeowner in which the homeowner is given a cash settlement in exchange for vacating the foreclosed home. Homeowner can use the cash to begin a new life. Lender may make an offer of anywhere from $1,000 to $5,000. Helps lenders avoid the extremely expensive and time consuming eviction process.

Know Your Options - Curable Repayment Plan – an agreement between the homeowner and their lender that lets the homeowner pay the past due amount along with the current mortgage payment over a specified time period to bring the mortgage current. Resolves the delinquency. Can catch up on past due mortgage payments. Less damaging to the credit score than a foreclosure. Stay in home and avoid foreclosure.

Making Home Affordable Programs HAMP Home Affordable Modification Program HARP Home Affordable Refinance Program HAFA Home Affordable Foreclosure Alternatives UP Home Affordable Unemployment Program FHA Short Refinance Federal Housing Administration Refinance for Borrowers with Negative Equity Achieves a more affordable payment by adjusting interest rate, extending term, and reducing or forbearing principal Typically saves about $500 per month Helps with primary residence or rental property If significantly more is owed than the home is worth, homeowner is automatically evaluated for principal reduction By making timely payments, homeowner could earn up to $10,000, which would be used to reduce principal balance Deadline is December 30, 2016 Eligibility Must be struggling to make mortgage payments due to financial hardship Must be delinquent or in danger of falling behind on your mortgage Mortgage obtained on or before January 1, 2009 Property has not been condemned Up to $729,750 is owed on primary residence or 1-4 unit rental property Homeowner with a mortgage owned by Fannie Mae or Freddie Mac may be able to refinance into a more affordable mortgage Can help low interest rate and mortgage payment Homeowner could switch to a fixed-rate mortgage With a shorter-term mortgage, homeowner could build equity faster Deadline is December 31, 2016 Must be owned Fannie Mae or Freddie Mac Must be current on mortgage Must be primary residence, a 1-unit second home or a 1-4 unit investment property Loan must be originated on or before May 31, 2009 Current loan-to-value ratio must be greater than 80% Provides homeowners the opportunity to exit their homes and be relieved of their remaining mortgage debt through a short sale or a deed-in-lieu of foreclosure If short sale doesn’t work, homeowner may be able to give the title back to mortgage company in a deed-in-lieu of foreclosure Once short sale or DIL is completed, homeowner gets a waiver of deficiency. Offers $10,000 in relocation assistance Sometimes less negative affect on credit score than foreclosure Must be delinquent or in danger of falling behind on mortgage Temporarily suspends monthly mortgage payments or reduces them to no more than 31% of gross income Offers a break from regular mortgage payments for up to 12 months Can get homeowner a more affordable, more stable, FHA – insured mortgage Mortgage company reduces unpaid principal balance by at least 10% After FHA short refinance, what is owed on mortgage is in closer alignment with value of home Must owe more on mortgage than the current value of the property Must be current on existing mortgage, or have successfully completed a qualifying three-month trial payment plan Must be primary residence Must have a “FICO based” decision credit score greater than or equal to 500 Must qualify for the new loan under standard FHA underwriting requirements Must not have been convicted within the last 10 years of the following: (a) felony larceny, theft, fraud, or forgery; (b) money laundering; or (c) tax evasion in connection with a mortgage or real estate related transaction

PHFA Loan Servicing Staff It is extremely important to understand that ALL HFA’s (including PHFA) are exempt from the Dodd-Frank and the CFPB regulation that states that all delinquent borrowers must have a single point of contact up until the loan goes to foreclosure. It is important to understand that the PHFA loan servicing department is 1st broken down by the numbers of days delinquent: 15-45 days = Early Collectors 45+ up to foreclosure = Late Collectors

PHFA Loan Servicing Staff In order to receive any account specific information for a PHFA borrower, PHFA must have an executed Counseling Services Authorization (3-in-1) on file. It can be found on Counselor’s Corner under “Resources and Forms” then click Counseling Agency Update Forms. The 3-in-1 can be faxed to (717) 780 – 3804.

PHFA Loan Servicing Staff (cont.) Once the borrower is 45+ days delinquent, the loan is then assigned by loan type: Conventional RHS VA FHA Counseling agencies are prohibited from instructing a PHFA borrower not to contact PHFA and should not discourage PHFA borrowers from making their mortgage payment.

PHFA Loan Servicing Staff (cont.) Kate Newton, Director of Loan Servicing; (717) Jim Smith, Asst. Director of Loan Servicing Tom Gouker, Manager of Collections; (717) Kim Ayala, Manager of Conventional Default Servicing; (717) Richelle Strawser, Manager of FHA Default Servicing; (717)

PHFA Loss Mitigation Options It is imperative that counseling agencies understand the Investor of the loan, mortgage insurer and the loan type in order to assist a PHFA borrower with the appropriate loss mitigation option, therefore, it is recommended that counseling agencies gather this information when talking with the PHFA Loan servicing staff.

PHFA Loss Mitigation Options Investor: Ginnie Mae Pool: Investor Numbers 931,932,933 FHA, VA or RHS loan that have been secured by a Ginnie Mae Pool PHFA is prohibited from pulling a “current” PHFA loan out of the pool, however, if there is evidence of a verified imminent default and an ongoing default, PHFA may pull the loan once a request for loss mitigation has been submitted. If a Ginnie Mae loan is pulled out of the “pool” for a loan modification, the new loan term must be extended back out to 360 months.

Continued: PHFA Loss Mitigation Options Fannie Mae Pool: Investor Numbers 250,251,252,253,255,256,941,942 Conventional Loans only Must approve ALL Loss Mitigation requests Mortgage Revenue Bond: Investor Numbers 249 or less Can be VA, RHS, FHA, Conventional

Continued: PHFA Loss Mitigation Options Mortgage Insurer: The following mortgage insurers have stated guidelines and policies that PHFA is subject to, therefore, the mortgage insurer must approve ALL loss mitigation requests: The Pennsylvania Housing Insurance Fund (PHIF) PMI Mortgage Insurance Company Mortgage Guaranty Insurance Corporation (MGIC) Radian

Continued: PHFA Loss Mitigation Options Mortgage Insurer: Uninsured Not covered by any mortgage insurer Borrowers have paid the 20% down payment More flexibility for Loss Mitigation option Loan Type: Conventional RHS VA FHA

Continued: PHFA Loss Mitigation Options The following are the only acceptable PHFA Retention Options: FHA Waterfall Options Informal/Formal Forbearance/Repayment Plan Special Forbearance Loan Modification (Stand Alone) FHA HAMP (may include a Partial Claim) Conventional Options Repayment Plan Special Forbearance Agreement Loan Modification HEMAP

Continued: PHFA Loss Mitigation Options The following are the only acceptable PHFA Disposition Options: For ALL Loan types: Straight Sale Deed-in-Lieu of Foreclosure Short sale/Pre-Foreclosure

PHFA Foreclosure Attorneys and Partners Purcell, Krug and Haller; 1718 North Front Street Harrisburg, PA (717) This firms handles Conventional and FHA foreclosures and Mediation and Diversion court cases for central and western Pennsylvania. KML Law Group; 701 Market Street Philadelphia, PA. (215) This firm handles Conventional foreclosures and Mediation and Diversion court cases for eastern Pennsylvania. Vitti and Vitti Associates; 215 4th Avenue Pittsburgh, PA (412) This firm handles Conventional foreclosures and Mediation and Diversion court cases for western Pennsylvania.

The Foreclosure Process Foreclosure – is a legal process by which the lender or lien holder obtains a termination of the borrower’s equitable right of redemption either by a court order or by the operation of the law. A foreclosure could seriously affect a homeowner’s ability to qualify for credit in the future and should be avoided if at all possible.

The Foreclosure Process Each state in the U.S. handles their real estate foreclosures differently and it is important to understand that states have: specific state’s procedure terms used time frames as they vary greatly from state to state One of the most important distinctions in a foreclosure process is whether the foreclosure is conducted through the court system (judicial) or outside the court system (non-judicial).

The Foreclosure Process: Judicial Foreclosure By Judicial Sale –known as Judicial Foreclosure is permissible in almost every state. The biggest benefit (for the lender) to doing a Judicial Foreclosure is that the lender can ask the court, (when appropriate) to enter a “Deficiency Judgment" against the borrower.

The Foreclosure Process Deficiency Judgment – unsecured money judgment against a homeowner whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan in full. Money owed to the lender Governed by state law Court order Can be negotiated

The Foreclosure Process Standard Foreclosure Fee by Loan Type State Method of Foreclosure Conventional HUD Fannie Mae Freddie Mac Pennsylvania Judicial $800.00 $1,300.00 1,250.00 1,000.00

Judicial Foreclosure Process/Timeline

Current Foreclosure Statistics – Pennsylvania As of August 2016: One in every 1,289 housing units received a new foreclosure filing. Source: RealtyTrac.com: 9/20/16

Mortgage Foreclosure Scams We have all heard the ads on the radio and seen the signs and fliers: “Having trouble with your mortgage?” “We can help.” “You may be eligible for mortgage aid.” These scam artists may: Advertise on the internet. Illustrate their materials with government logos. Give their companies official-sounding names. Use scare tactics.

Mortgage Foreclosure Scams Scam artists convince struggling homeowners to pay fees in return for false promises. They prey on the desperate and attempt to gain the trust of homeowners who are in financial distress. They are able to identify distressed homeowners through public foreclosure notices in the newspaper and/or online and target them with pressure sales tactics, pervasive marketing skills and exaggerated conversation.

Mortgage Foreclosure Scams Mortgage foreclosure scams are sweeping the nation and according to a recent report, homeowners (nationwide) made 16,000 reports from February 2010-July 2011 totaling $40 million in losses.

Mortgage Foreclosure Scams Mortgage foreclosure scams usually fall into one of the following three categories. Phantom help - the scam artist charges very high fees for basic phone calls and paperwork that the homeowner could have done or they make promises to represent the homeowner but will not follow through.

Mortgage Foreclosure Scams Bait out/Equity Stripping - the scam artist “rescues” homeowner by helping them to get rid of their home. The scam artist tricks the homeowner into surrendering the title to the house by promising that they can stay on as a renter and then buy back the house once things have been "fixed.“ In the end, the homeowner can't afford to buy back the house and the scam artist bleeds the house of most (or all of) the equity.

Mortgage Foreclosure Scams Bait and switch – the scam artist masquerades as a phony lender, agency, etc., armed with mounds of legal documents- often for a new loan that is going to “solve” the homeowner's problems. In reality, the homeowner signs forged documents that give the scam artist ownership of the home. To make things worse, the homeowner still owes the mortgage, but no longer has the asset.

Mortgage Foreclosure Scams Beware of other common mortgage foreclosure scams Forensic Loan Auditor Bankruptcy Scheme Short Sale Scam Rent-to-own/lease back scheme Phony Counseling Agencies

Mortgage Foreclosure Scams To determine if a homeowner was a victim of a scam, ask these two questions. Were you told you had to pay a fee to obtain counseling services? Were you guaranteed a loan modification or asked to do any of the following: Sign over title to your property? Redirect mortgage payments? Stop making loan payments?

Mortgage Foreclosure Scams Where To Go To For Help: File a complaint online through the Loan Modification Scam Prevention Network at a scam. Pennsylvania Office of Attorney General Pennsylvania Department of Banking

Mortgage Foreclosure Scams Where To Go For Help: If scammed by an attorney you may contact the PA. State Bar Association - Federal Trade Commission – NeighborWorks America’s Loan Modification Scam Alert Campaign -

Mortgage Foreclosure Scams
Standard Solutions to Mitigate Mortgage Default and Delinquency Mortgage Foreclosure Scams If It Sounds Too Good To Be True…. It‘s Too Good To Be True

Bankruptcy Bankruptcy or insolvency is a legal status of a person that cannot repay their debts owed to creditors. Legal procedure filed in federal bankruptcy courts: Relief or protection from all creditors Allows the debtor some breathing room Pre-Bankruptcy counseling is required

Bankruptcy Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went in to effect on October 17, 2005 Biggest reform to the bankruptcy laws since 1978 To prevent abuse of the bankruptcy laws Extensive changes were made to the Chapter 7 bankruptcy. Means test - any debtor with more than $ in monthly disposable income, would face a presumption of abuse Debtors have to wait 180 days before they can file another Chapter 7 or Chapter 13.

Bankruptcy Chapter 7 – filing fee $ also know as a “Straight Bankruptcy” or a “Liquidation”. Liquidation of “most” debts to satisfy creditors Allowed to keep certain exempt property Stays on credit report for 10 years from the date of filing

Bankruptcy Chapter 13 – filing fee $310 - also know as a “Reorganization Plan” or a “Debt Consolidation”. Allows the debtor to develop a plan to repay all or part of their debts. Allows the debtor to undergo a financial reorganization supervised by federal bankruptcy courts. Debtor proposes a plan to pay creditors over a 3 to 5 year period. Stays on credit report for 7 years from the date of filing. The advantage to doing a Chapter 13 is the ability to stop foreclosures.

National Mortgage Settlement Relief After many months of negotiation, 49 State Attorney General Offices and the Federal Government reached an agreement on a state- federal set tl ement ” with the country’s 5 largest loan servicers. Ally/GMAC Bank of America Citibank JP Morgan Chase Wells Fargo

National Mortgage Settlement Relief The settlement provided $25 billion in relief to: Distressed borrowers in the states who signed on the settlement. Direct payments to signing states and the federal government. The agreement centered around 5 servicers who signed foreclosure related documents outside the presence of a notary public and without really knowing the facts they contained were correct.

National Mortgage Settlement Relief The settlement provided benefits to borrowers (in the signing states) whose loans were owned by the settling banks as well as to the borrowers whose loans they serviced. Provisions of the settlement include: Immediate aid to homeowners who needed loan modifications now. Immediate aid to borrowers who were current, but whose mortgage exceeded their home’s value. Immediate payments to borrowers who lost their homes to foreclosure. Immediate payments to signing states to help fund consumer protection and state foreclosure protection efforts (like HEMAP).

National Mortgage Settlement Relief First ever nationwide reforms to servicing standards: Single point of contact Adequate staffing and training Better communication with borrowers Appropriate standards for executing documents in foreclosure cases, ending improper fees and ending dual-track foreclosures

National Mortgage Settlement Relief Stat e AG’s over sight of nat iona l banks: National Banks are required to regularly report compliance procedures associated with the settlement to the state AG’s office. Servicers will pay a penalty (including missed deadlines) for non-compliance issues.

National Mortgage Settlement Relief For help with: Loan modifications and refinance options, borrowers may be contacted directly by one of the 5 participating servicers. Foreclosures between January 1, 2008 and December 31, 2011, a settlement administrator designed by the AG’s office sent a claim form to borrowers eligible for cash restitution. For more information about the National Mortgage Settlement Relief go to

Bank of America Advocacy Team Bank of America (BOA) has opened a housing counselor hotline to provide HUD approved counselors with direct access to assistance for BOA clients. BOA’s specialists are available Monday-Friday 8:00 am–8:00 pm (ET). Housing counselors may submit “com plet e” client files 2 ways: Via encrypted at (under no circumstance should loan-specific information be sent in an unencrypted ). HOPE LoanPort.

Bank of America Advocacy Team To ensure a fair decision, please submit a “complete” client file. Use the “HUD Counseling Agency Document Checklist as a guide for submitting your case file to BOA. Counseling agencies that have not been set up for encrypted should call For more information regarding HOPE LoanPort send an to

Bank of America Advocacy Team Urgent escalation case files can be submitted via encrypted at Reasons to escalate a client file: Pending foreclosure sale within 2 weeks. Have not received a response within 45 days. An error in identifying an appropriate solution. Not able to talk to a Case Relationship Manager. A “drastic” change in the customer’s financial situation since submitting the case.

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Resources Each Other Power Pay - Volunteer Income Tax Assistance - Partnership for Prescription Assistance - Non-profit Referral - United Way Homeless Resource Center - Law Help - Know Your Options - USA Government Made Easy - (formally Consumer Action) -

Thank you for attending!!
Standard Solutions to Mitigate Mortgage Default and Delinquency Thank you for attending!! Justin Coleman Patricia Breslin Business Development Officer II Compliance Officer (717) (717)

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