Real Estate Investing

I have no intention - none whatsoever - of suing my mortgage lender.  However, if you want to take this kind of action, there’s new help available for homeowners, according to the Foreclosure Industry blog,

I’ve established a relationship with a law firm that is ready to help homeowners fight their lenders in court with meaningful court action. This is the “big stick” I’ve been talking about for homeowners – a loan audit and an attorney who isn’t afraid to stand up to the bank.

If this is you, I’d like to hear from you to figure out your goals with the property and what your desired outcome is. At a minimum, you will need to have a loan audit done first and the ability to pay a reasonable amount for legal fees. The law firm will use the loan audit report for the basis of the lawsuit around your specific fact pattern.

I think clearly there are cases where homeowners have legitimate reason to seek litigation against their lender.  I found an article from MSN Real Estate that was published several months ago that outlined reasons someone would have to do this,

• Your broker falsified your income;

• Your broker hid his or her fees;

• You weren’t immediately given a copy of the good-faith estimate and weren’t given an accurate HUD-1 statement breaking down all fees at closing;

• After signing the contract to refinance your mortgage, you didn’t walk out with a “notice of rescission” that explains your rights to cancel the refi within three business days;

• You were led into a subprime loan though your credit would’ve qualified you for a better loan; or

• In short, you were lied to or deceived.

As I talk with buyers and sellers alike, it distresses me greatly to hear their stories of what was done illegally to get them in a home.  This should help!

First, I want to express my sincere gratitude to all the men and women who have served in the Armed Forces of the United States.  I grew up an Air Force brat, so I know the sacrifices made by our soldiers, airmen, sailors, and marines.  They have to be ready with just a moment’s notice to defend our country.  They often serve overseas - far away from home and loved ones.  They are also sent on short-term missions the coincide perfectly with holidays.  Many have been injured, killed, or mentally wounded.  Others have been more fortunate.  But ALL OF THEM are heroes, whether they’ve served in wartime or in peace.

Fortunately, veterans are eligible for VA loans if they served on active duty - they must have been discharged under conditions other than dishonorable and must have served during or after World War II.  According to Mortgage 101,

Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years of continuous active duty…

The VA does not actually fund the home loan, but it guarantees the loan on behalf of the borrower so a lending institution is more willing to lend.  The U.S. Department of Veterans Affairs says,

When VA refunds a loan, the loan is purchased from the private lender. VA only refunds a loan when the veteran has had problems making the payments due to circumstances beyond his or her control, the problems have improved so that payments can now be made or will be in the near future, but the loan holder is not willing to wait before taking action to terminate the loan. Refunding is rare because most lenders prefer to work out the problems, if at all possible, rather than selling the loan to VA and thereby giving up the right to future income from that loan.

Loans are transferable - as long as the person taking it over meets the same qualifications as the original borrower.  The VA will also require the house being purchased to be livable - it must have heat/air, flooring, finished walls, and the ability to cook.   A VA appraiser will visit the property prior to funding to be sure the requirements are met.

If you’re a lender or a Realtor, be sure to mention the availability of VA loans to your veterans.  If you’re a veteran,  take advantage of this government benefit there to help you.

Again, my gratitude to all of our veterans and current service members.

In California, Governor Arnold Schwarzenegger signed Senate Bill 94 today which bans the collection of advanced fees for a loan modification.  The Foreclosure Industry blog spoke against the measure,

To summarize, the bill prohibits persons from charging advance fees to borrowers in connection with the modification of the terms of the borrower’s loan, require those who wish to charge a fee for loan modification services (after performing them) to provide a specified notice to borrowers regarding other options available  to the borrower, prohibit servicers from imposing any interest or charge for performing services for borrowers in connection with loan modifications or other forms of loan forbearance of forgiveness; and close a loophole in the California Finance Lenders Law.

The post complains that the the state’s attorney general’s office labels everyone in the loan modification field as a scam artist.

The California Attorney General’s advice to do your own loan modification is highly irresponsible. He assumes that the banks have borrowers’ best interests at heart, which we all know is not true. If you’re worried about scammers, let’s take a look at the banking industry, which is the biggest scam artist of them all.

On the flip side, the California Reinvestment Coalition was disappointed the Governor didn’t sign another stronger measure proposed by the General Assembly,

Kevin Stein of the California Reinvestment Coalition expressed disappointment in the Governor’s action. “All the evidence that we’ve seen, or the bulk of the evidence, is that that there’s a huge amount of fraud in this industry.”  Stein said he was only modestly pleased that the Governor chose to sign Senate Bill 94 by Senator Ron Calderon of Montebello. That bill would ban the collection of advanced fees for a loan modification. He called it better than nothing, but weaker than AB 764.

It will be very interesting to see if he loan modification industry in California survives. I suspect it will, perhaps with higher fees on the tail end.