Posted on September 14, 2012 in Loan Modification

Finding yourself in hot water with your mortgage and trying to stay out of foreclosure? There may be a solution.

Whether it's called a loan modification, mortgage modification, restructuring, or workout plan, it's when a borrower who is facing great financial hardship, having difficulty making their mortgage payments and is facing foreclosure, works with their lender to change the terms of their mortgage loan to make it affordable. The workout plan varies by lender, but changes could include temporary or permanent changes to the mortgage rate, term and monthly payment of the loan, the past due amount could be rolled into the loan, and the new balance re-amortized.

In February 2009, the government unveiled the Making Home Affordable Program, which is made up of two main programs: one for loan modifications and one for refinance loans. The loan modification portion is called the Home Affordable Modification Program (HAMP). It is designed to reduce mortgage payments struggling homeowners pay per month to sustainable levels.

Continue Reading ››

 Posted on September 10, 2012 in Foreclosure

Today, we will discuss an alternative to foreclosure that may not be available to everyone, but is nonetheless an excellent option if you qualify for it. Refinancing your home requires good credit to qualify and your lender will also consider aspects such as income, assets, debts, and current value of the property. Refinancing can be considered for a number of reasons. These include lowering your interest rate, adjusting the length of your mortgage, changing from an adjustable rate mortgage to a fixed rate mortgage or to get an adjustable rate mortgage with better terms. Refinancing fees can greatly vary by lender, but they can amount to 2% to 6% of your outstanding principal.

If you think refinancing is an option for your property, please talk to one of our many qualified attorneys that can help walk you through the process.

Continue Reading ››

 Posted on July 04, 2012 in Loan Modification

If you're a typical homeowner, you probably feel like David facing up at Goliath when you speak with your lender about modification of your home mortgage. Despite efforts to put the odds more in the consumer's favor, most aspects of modification are in the bank's hands. But there are some ways to make easier.

Hire an experienced attorney. The bank has plenty of legal advice and firepower on their side. Plus, they're the ones who make the contracts you sign. So they're at a distinct advantage when negotiating anything with you. In order to even things up, secure an attorney who is knowledgeable and experienced with loan modification.

Write our a concise hardship letter. Explain why your circumstances have changed to the point that you can no longer afford your payments. Were your hours cut back at work? Do you have unexpected medical bills?

Be honest about your financial situation. You'll have to compile a lot of paperwork about your current financial situation. Don't lie about your current assets, or try to make things sound worse than they actually are.

Continue Reading ››

 Posted on June 18, 2012 in Foreclosure

For some homeowners, especially those who are significantly underwater, walking away from the property is the desired outcome. They ask themselves “Why should I payoff or modify a loan for $200,000 for a property that is only worth $100,000?” This is a very good question, and an important one to ask. The problem in this situation, however, is a personal deficiency judgment. This is when the bank can take a judgment against the borrower personally to satisfy the outstanding amount of the debt that remains after the property is sold.

For some homeowners, sentimentality is the answer. The property is very important to them as it is the only home they have ever owner or it is where they raised their children. If this is the case, then a modification is an excellent option, if possible.

If, however, the sentimental value associated with the property does not rise to the level of wanting to payoff or modify an underwater property. For those homeowners, the a big concern is a personal deficiency judgment against their personal property or assets.

Continue Reading ››

 Posted on May 06, 2012 in Foreclosure

Attorneys General from over ten states including Illinois have penned a letter to theFederal Housing Finance Agency to encourage loan giants Freddie Mac and Fannie Mae to reduce loan principals for homeowners who are struggling to avoid foreclosure on their homes.

The letter states that by using principle forgiveness, the cost to investors and banks would be minimal. Despite a statement in January by Federal Housing Finance Agency head Edward DeMarco that principal forgiveness would result in a burden to tax payers, the coalition of Attorneys General argue that forgiveness could result in savings of almost $1.7 billion.

As Freddie Mac and Fannie Mae own the majority of home loans in the United States, the letter urges them to act as a leader in principal forgiveness, rather than a hindrance in restarting the economy.

The attorneys further argue in the letter that increasing incentive payments to investors under the Home Affordable Modification Program (HAMP) would help ally concerns that forgiveness would negatively impact Freddie Mac and Fannie Mae. While many lenders have complained that participating in in forgiveness would involve costly changes to existing computer programs, the recent Foreclosure Settlement proves that lenders are capable of handling any resulting changes in their existing programs and procedures when dealing with home mortgages.

Continue Reading ››

 Posted on May 04, 2012 in Foreclosure

If you have been served with foreclosure documents, attached to the complaint is a document called a note. Also included may be various other documents and affidavits executed by banks. These documents, which claim to be executed by banks, must bear a signature from an authorized employee at that bank.

We have recently found that Margaret Dalton has executed different documents on behalf of at least ten different lenders, usually in her capacity as Vice President. This means that some of these documents may not be valid.

Please look over your foreclosure documents. If any of them were allegedly executed by Ms. Dalton, please contact an attorney.

Continue Reading ››

 Posted on April 21, 2012 in Foreclosure

A recent report from RealtyTrac indicates that March foreclosure filings in the Chicago metropolitan area rose by 18.5% from March, 2011, and by 1.8% from February, 2012. There were a total of 12,818 foreclosure filings in March, which is equal to one in every 296 homes.

Unfortunately, the foreclosure rate in the Chicago area and in Illinois as a whole was higher than the rest of the nation. In the first quarter of 2012, Illinois had the third highest foreclosure total in the United States, while the number of homes with new foreclosure filings nationwide actually dropped over last year.

Another recently released report shows that new foreclosure filings in the Chicago metropolitan area were based on a growing number of conventional mortgages, as opposed to government-backed fixed rate loans and adjustable rate or balloon mortgages. Additionally, almost 25% of new foreclosure filings concerned loans that originated before 2005. This information reveals that while homeowners have managed to maintain their monthly mortgage payments for six years or more, the deepening economic crisis has finally forced them into foreclosure. Moreover, even homeowners who took on conventional mortgages, as opposed to riskier adjustable rate mortgages, have fallen prey to the nation's wave of foreclosures in recent years.

Continue Reading ››

 Posted on March 30, 2012 in Foreclosure

In Illinois, if a homeowner misses a mortgage payment, their loan then goes into default. Although just one missed payment violates the mortgage contract. most lenders won't start foreclosure proceedings until a borrower is at least three payments behind. However, a Chicago foreclosure doesn't mean that the homeowner must immediately move out. In Illinois, the borrower is considered the lawful occupant of the property and is allowed to live in the property until a judgment of possession is entered, which takes a minimum of 9 months.

Illinois' Homeowner's Rights Act, requires that lenders take certain steps before filing for foreclosure proceedings. When a homeowner is at least 30 days behind on a mortgage payment, the lender must notify them that they have 30 days to seek assistance. Obtaining that assistance allows the borrower another 30 days to work out a payment plan.

If the borrower fails to do either of these things, the lender may begin foreclosure proceedings. The lender will send the borrower notification of its intention to foreclose and then file a lawsuit, detailing the reasons for the foreclosure request.

Continue Reading ››

 Posted on March 16, 2012 in Foreclosure

As it is now mid-march, it is time for the Final Four…affirmative defenses that can be raised in a Mortgage Foreclosure Defense

1. Unclean hands: Foreclosure actions in Illinois are filed with the Chancery Division of the Court in the County in which the property is located. In order to initiate a legal action in the Chancery, the parties must “be before the court with clean hands.” This essentially means that the lender cannot have engaged in any actions that have contributed to the borrower being in default.

2. Standing: a party must have standing for the Courts in Illinois to have jurisdiction over a matter involving that party. All indispensable parties must be included in the action and the Plaintiff must be in possession of the debt. If a party lacks standing, it cannot being a law suit in the Illinois courts.

3. Fraud: lenders have been known to commit fraud, in fact, in some cases homeowners have been induced to sign loan documents because of lender fraud. There are several different elements that must be examined to determine if the lender engaged in fraudulent actions. Two examples: a) was the appraisal over-inflated? b) were any fiduciary obligations violated?

Continue Reading ››

 Posted on February 27, 2012 in Foreclosure

Here are three more affirmative defense that may arise out of violation of the Unfair and Deceptive Trade Practices Act:

1. If your lender did not provide you with statements of the escrow account associated with your loan transaction, then an affirmative defense may exist.

2. If your lender failed to pay property taxes or insurance premiums for the subject property, there may be an affirmative defense.

3. The third is sort of a catchall catergory for actions or behavior that does not fit into the other affirmative defenses under the Unfair and Deceptive Trade Practices Act. If the actions of the lender were misleading or deceiving to the consumer in a way that could be construed as unfair or deceptive, there may be an affirmative defense.

If you believe that your lender has engaged in the above, please contact an attorney (especially for the third defense listed above).

(e) Otherwise misleading or deceiving the consumer in a way in which the practice can be construed as unfair or deceptive.

Continue Reading ››