How to Stop a Foreclosure
Or Get a Cash Settlement Following Foreclosure
By Dr Stuart Jeanne Bramhall
Fix My Payment (http://www.fixmypayment.com) is a free website and advisory service for homeowners who have lost homes to foreclosure or who are currently struggling with mortgage payments.
Many of the mortgage relief programs listed on the Fix My Payment website stem from settlements the banking industry has made with the Department of Justice, the Federal Reserve, the Office of the Comptroller and various states following criminal indictment for predatory lending practices (i.e. banks sold subprime mortgages to low income borrowers they couldn’t possibly repay) and fraudulent so-called “robo-signing” foreclosures. Others are federal programs enacted in 2009 as part of the Obama administration’s recovery package.
Below are some specific programs:
1. Department of Justice Settlement with Ally/GMAC, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo in predatory lending indictment
Homeowners (and foreclosed homeowners) with mortgages issued by any of the above banks are eligible for mortgage relief under the following conditions:
- Financial hardship ($17 billion available for principal reduction)
- Upside down mortgages in which the property is worth less than the mortgage loan ($3 billion in refinancing relief)
- Borrowers lost property to foreclosure between January 1, 2008 and December 31, 2011
2. Federal Reserve and Office of Comptroller settlement with Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Aurora Loan Services. MetLife Bank, PNC Financial Services Group, Sovereign Bank, SunTrust Banks and US Bancorp in wrongful “robo-signing” foreclosure indictment (i.e. banks foreclosed on homes without proof of legal title).
Borrowers with mortgages with the above banks are eligible for $3.3 billion in cash settlements if they have lost their home due to foreclosure and $5.2 billion in principal and/or interest reduction to existing mortgages (in cases of financial hardship).
3. Home Affordable Modification Program (HAMP)
Federal assistance the Obama administration enacted in 2009 providing financial incentives for banks and loan servicing companies to rewrite loan terms to help troubled borrowers (excludes mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac).
4. HAMP-VA, HAMP-FHA, HAMP-USDA
The above programs provide incentives for banks and loan servicing companies to write loan terms for mortgages guaranteed by the VA, the Federal Housing Administration or the US Department of Agriculture. (excludes mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac).
5. Housing Affordable Refinance Program (HARP)
Federal assistance the Obama administration enacted in 2009 providing financial incentives for banks and loan servicing companies to rewrite loan terms to help troubled borrowers with mortgages owned or guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac.
6. Keep Your Home California (KYHC)
California residents are also eligible for four state programs:
- The Unemployment Mortgage Assistance Program – helps homeowners who are currently unemployed and receiving California EDD unemployment benefits.
- The Mortgage Reinstatement Assistance Program – helps homeowners who have fallen behind on their payments and need help in reinstating their loan.
- The Principal Reduction Program – helps homeowners who have experienced a financial hardship along with a drop in the home’s value.
- The Transition Assistance Program – provides relocation up to $5,000 in relocation funds to help eligible homeowners transition into a new housing situation after going through a deed-in-lieu or short sale.
Free Personal Assistance
In addition to the numerous options listed on their website, people can also phone (909) 937-2400 or visit a mortgage adviser (without charge) if they live in Los Angeles. In addition to recommending specific programs homeowerns can apply for, Fix My Payment customer service representatives seem to know exactly what documents to file to halt foreclosure proceedings.
The Non-Existent Recovery
Economists predict no end in sight to the present foreclosure crisis. Despite manipulation of the “official” unemployment rate by the Obama administration and the corporate media, the percentage of employed Americans of working age has flat lined. According to the Department of Labor’s own statistics, the percentage of American families in which no one has a job stands at 20%. The percentage of unemployed working age adults stands at 41%. Prior to the 2008 economic downturn, this figure had been stable at 35-37% for nearly a decade.
With the recent news that the US economy shrank by 1% (annualized) in first quarter 2014, the potential for new job creation looks extremely bleak. The technical term for a shrinking economy is deflation. Deflation leads to a downward spiral. A shrinking economy means less money in circulation. Low demand forces retailers to reduce their prices, while consumers postpone purchases in anticipation prices will drop further. As sales continue to decline, companies lay off more workers, which makes finding new jobs even more difficult.
photo credit: JefferyTurner via photopin cc