Mortgage Foreclosure & Refinance Resource

Mortgage giants Fannie Mae and Freddie Mac have directed their network of servicers to halt all foreclosure and eviction proceedings between Nov. 26 2008 and Jan. 9, 2009, meant to give a recently announced rescue plan time to work.

The Streamlined Modification Program, set to launch Dec. 15, enables delinquent borrowers to get a modified mortgage that lowers payments to no more than 38% of their gross incomes.

“By delaying these foreclosure sales, the nation’s servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new [program],” said Freddie Mac CEO David M. Moffett in a statement. [Read more →]

 The federal government announced plans Wednesday to modify a program to make it easier for troubled homeowners to exchange problematic mortgages for more inexpensive ones. The new expedited regulations will expand on the Housing and Urban Development Department’s hope for homeowners program.
The changes will give lenders a greater incentive to participate, by allowing them to write off less of the loan value than under the previous rules. Homeowners will benefit from lower monthly payments, but the loan’s term may be extended to as much as 40 years. The provisions will change the rules based on “Hope for Homeowners” legislation passed by Congress in July.
Under the new rules, homeowners won’t have to spend more than 31% of their monthly income on their house payment. For the lenders, the rules will allow them to write down a loan to 96.5% of the home’s actual value, rather than to 90% as under the old rule. [Read more →]

Neither one of the choices should be taken lightly, and of course you need to talk to your attorney, but here are some facts if you’re thinking about filing for bankruptcy to avoid foreclosure.  First, we caution against falling for some of the schemes that have been developed that entice a homeowner who is facing foreclosure to transfer a portion of the title to his home to a third person, who then files for bankruptcy. While that may temporarily delay the foreclosure courts are getting wise to the scheme and the delay may be very temporary. Typically the homeowner pays large fees and loses his or her home anyway. Some of the people engaging in such schemes have also been charged with fraud.  But now, with that warning out of the way…

When you file either a Chapter 13 or Chapter 7 bankruptcy, the court automatically issues an order (called the Order for Relief) that includes a wonderful thing known as the “automatic stay.” The automatic stay directs your creditors to cease their collection activities immediately, no excuses. If your home is scheduled for a foreclosure sale, the sale will be legally postponed while the bankruptcy is pending—typically for three to four months. However, there are two exceptions to this general rule:

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