Bankruptcy and Loan Modifications

Home Loan Modification and Bankruptcy to Prevent Foreclosure

marctow — Fri, 19 Jun 2009 19:10:25 +0000

The recent foreclosure epidemic has caused millions of American homeowners to scramble for more affordable home loan terms. Whether it’s a rising adjustable rate, loss of income, loss of equity or simply a poor decision to borrow money, people need loan revisions and very few people are able to accomplish that with the traditional method of mortgage refinancing. Mortgage loan modifications occur when a mortgage lender agrees to modify terms in accordance with their borrowers request. Most loan modifications happen after a borrower requests a payment reduction and the loss and mitigation department of the lender agree to the terms. Loan modifications have become a critical tool employed to prevent foreclosures.

Bankruptcy is a legal action filed by a consumer who is unable to pay his or her monthly debt payments. Bankruptcy formally stops all civil proceedings against the debtor while in bankruptcy. According to BK law, lenders must suspend their legal actions and this includes foreclosures. However, the lender still has the option of filing for an exception from the automatic stay. If the relief is granted the lending company is authorized to proceed with the foreclosure action. Bankruptcies do not always prevent or delay foreclosure and it does not necessarily enable the homeowner to remain in possession of the home unless the pay the deficiency owed to the lending bank. However, in most cases a bankruptcy will delay the foreclosure.

There has never been a better time to be delinquent on your mortgage. The foreclosure epidemic has created tremendous leverage for homeowners, because banks do not want more homes. Liquidity has become a serious issue with banking institutions; therefore they are negotiating and offering home loan modifications with lower payments for homeowners.

Mortgage banker, Bryan Dornan is a respected business owner who has copy-written many real estate related articles online. Dornan recommends going to the following websites: Loan Modifications and Bankruptcy .

Article Source: http://EzineArticles.com/?expert=Bryan_Dornan

I’ve been a real estate and bankruptcy lawyer for 30 years here in Orange County. Feel free to visit my website at www.TowLawBankruptcy.com.

Mortgage Loan Modification Tips – Apply Now And Qualify To Lower Your Home Mortgage Payment

marctow — Thu, 18 Jun 2009 18:22:08 +0000

Have you been wishing that you could lower your monthly payments in order to stay in your home and avoid foreclosure? You are hardly alone, as you have probably heard. You may be eligible for a mortgage loan modification, under the federal government’s new streamlined program. The stimulus plan, under President Obama, offers loan workarounds for up to nearly 5 million homeowners over the next several years. You may have been wondering, already, how to find out if you are eligible to apply with your lending bank. This article contains tips and useful information on how to approach your lender to qualify for a loan workaround.

No lending bank is obligated to offer a mortgage loan modification, but the new federal guidelines make it very attractive by offering incentives to both lenders and borrowers. Due to the steep drop off in home values, banks are reconsidering the cost of foreclosure versus working out a modified loan that their borrowers can live with. Basically, the bank will do whatever saves them the most money — that’s what banks do — but the federal government has stepped in to increase the odds in your favor.

So what is involved? Well, you need to complete some application forms, include a letter explaining your current financial hardship, and provide your lending bank with any necessary documentation in support of your claims. Your lender needs to see in black-and-white terms that you are qualified for a modified payment plan, and that you can afford and maintain a restructured agreement. Once you convince the bank of this, your odds of success are very good. Your lending institution will consider your ability to repay, your house’s current market value, and the outstanding balance on the loan. If you owe the bank close to or greater than your house’s current value, then keeping you in your current home under modified loan terms is probably the best bet.

Tip: Have a local realtor prepare a Comprehensive Market Analysis report, if you are unsure of your home’s current value. This report is an excellent tool for building your case with your lending institution. To succeed in your quest for mortgage loan modification, your lender wants to see a complete, accurate package. So all of your paperwork must be completed correctly, in order to meet the bank’s approval guidelines. The lender also wants to see you include all necessary documents on the first pass, in order for your file to move quickly through its system process. Incomplete or inaccurate files get set aside in favor of more accurately and completely prepared paperwork from other applicants. Don’t let your case be delayed. Prepare your forms to ensure the best odds for approval. How to do this? And which documents will you need in order to avoid delays? Learning what you need to know is easier than you think. Start with a professional to do your Loan Modification . Be prepared with an attorney at your side to talk to the lending bank.

By: Lindsy Emery

For more information contact Marc Tow at 1-888-445-4140 or visit www.towlawbankruptcy.com

Tags: loan modification, bankruptcy, attorney, lien stripping, cram down, removing second mortgage, loan audit

I’ve been a real estate and bankruptcy lawyer for 30 years here in Orange County. Feel free to visit my website at www.TowLawBankruptcy.com.

No California Foreclosure Moratorium But You Can Save Your Home With Loan Modification Programs in Los Angeles and Throughout California

marctow — Thu, 18 Jun 2009 18:16:46 +0000

LOS ANGELES, June 17, 2009 /PRNewswire via COMTEX/ —-The new “foreclosure moratorium laws” do not guarantee homeowners a loan modification and will do little to stop a trustee sale. Governor Schwarzenegger’s signature on the recent California Foreclosure Prevention Act, similar to the Obama Making Homes Affordable Plan, is unlikely to stop or delay most foreclosures. The bill is a step in the right direction by adding 90 days to the 3 month time frame between a notice of default and a notice of trustee sale, but leaves loopholes that allow lenders to be excluded upon application to the state or by implementing a loan modification program. The law only applies to certain loans for owner occupied properties and does not require lenders to stop a trustee sale that has already been scheduled. In addition, the lenders are not required to give borrowers a modification under these laws, but they do need to implement loan modification programs to avoid delay.

“Do not trust your mortgage company’s nice customer service person telling you that you are covered by the foreclosure moratorium. You are dealing with a huge organization with thousands of foreclosure calls per day. I have clients who were told by their lender that they were postponing their sale and then sold the home anyway. Once the trustee sells your house, it is extremely difficult to get it back, even in court,” said loan modification attorney Chris Barsness, Esq. “In order to assure you protect and save your home, don’t assume you are covered by the moratorium. The good news is that many lenders are successfully implementing their new loan modification programs, so there really is hope for homeowners, but you must act.”

I’ve been a real estate and bankruptcy lawyer for 30 years here in Orange County. Feel free to visit my website at www.TowLawBankruptcy.com.

US GOVTS: Treasury Allocates $3.1 Bln In Loan Modification Incentives 06.16.09, 05:45 PM EDT

marctow — Thu, 18 Jun 2009 18:14:05 +0000

Washington, June 16 – The Treasury Department on Friday readjusted its home loan modification program incentive allocations to nine mortgage loan servicers by a net $3.1 bln, with most of the new funds being directed to Countrywide Home Loans Servicing.

Countrywide will receive another $3.3 bln in incentive payments in addition to the $1.9 bln it already received as incentive for its loan modifications. GMAC ( GJM – news – people ) was allocated an additional $385 mln, Select Portfolio Servicing of Utah was given $285 mln, while another 4 servicers were allocated additional sums of less than $200 mln. Meanwhile, Treasury subtracted $992 mln from CitiMortgage’s allocation and $106 bln from that of Ocwen Financial Corporation ( OCN – news – people ) of West Palm Beach, Florida.

Before Friday’s readjustment, $15.2 bln had already been allocated to sixteen servicers. One of the servicers – Residential Credit Solutions of Fort Worth – had just been added on Friday, with an initial incentive payment of $19.4 mln.

I’ve been a real estate and bankruptcy lawyer for 30 years here in Orange County. Feel free to visit my website at www.TowLawBankruptcy.com.

Foreclosure freeze prods banks to modify loans

marctow — Thu, 18 Jun 2009 18:09:33 +0000

(06-15) 18:25 PDT — California implemented a new foreclosure moratorium on Monday to goad banks into modifying mortgages for struggling homeowners.

The California Foreclosure Prevention Act, signed by Gov. Schwarzenegger in February, adds 90 days onto the time period between when homeowners default on a loan and when their home can be repossessed in foreclosure. Banks can avoid the 90-day holdup by having a comprehensive program in place to make mortgages more affordable by reducing the interest rate, extending the loan term, or reducing or deferring some of the principal. Such programs must be approved by regulators.

“The goal is to compel banks to do systematic loan modifications across California to reduce our foreclosure rate, which is the highest in the nation,” said Assemblyman Ted Lieu, D-Torrance, who wrote the bill. “Until we slow that down, the California economy cannot recover.”

Experts said the California initiative should complement the Obama administration’s foreclosure prevention plan, which offers financial incentives to servicers who complete loan modifications.

“This law is most useful as a stick to supplement the Obama administration’s carrots to get loan servicers to adopt a much more systematic framework for doing loan modifications,” said Paul Leonard, director of the California office in Oakland for the Center for Responsible Lending. “It is a useful nudge to get more servicers to sign contracts to adopt the Obama modification plan.”

In the past few months, 15 servicers have agreed to implement the Obama plan, according to the Web site MakingHomeAffordable.gov. Government spokesmen have said that about 100,000 homeowners nationwide have been sent offers for trial modifications, a relatively modest number compared with the administration’s goal of helping 3 million to 4 million homeowners avoid foreclosure.

In California, the Department of Corporations will determine whether banks qualify for an exemption from the moratorium. About a dozen servicers had applied as of last week, said department spokesman Mark Leyes; they will now have a 30-day grace period while their applications are reviewed. A list of the participating banks will be at www.corp.ca.gov.

Leyes said the department will monitor the servicers’ success rate regularly, not just accept their word that they have a program in place. Still, he added, “There is no guarantee in the law or anywhere else that anybody is going to get a loan modification. What we’re looking for is a good-faith effort on the part of the servicer to do what they can to make the loan affordable and sustainable for the homeowner.”

The California law, like the Obama plan, says that servicers can determine whether a foreclosure or a loan modification is more cost-effective and can pick the cheaper option.

Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, said lenders generally do not like moratoriums because they haven’t worked in this past, but they are taking a wait-and-see attitude toward the new California law because it includes a pathway for banks to avoid the delay.

“Because there is so much similarity between some of the provisions and requirements in this law and the new programs at the federal level, my guess is that a lot of the larger servicers will have no trouble qualifying,” he said.

In September, California implemented another law that required servicers to make more efforts to contact homeowners before foreclosing. That law caused a dip in the number of foreclosure filings throughout the fall months, but they have resurged this year now that lenders have caught up with the requirement.

I’ve been a real estate and bankruptcy lawyer for 30 years here in Orange County. Feel free to visit my website at www.TowLawBankruptcy.com.

Foreclosure and Loan Modification Scams on the Rise

marctow — Thu, 18 Jun 2009 18:05:18 +0000

RISMEDIA, June 15, 2009-National Short Sale Center, a large short sale company, has warned homeowners of the rise

in foreclosure and loan modifications scams. The FBI is currently investigating more than 2,100 mortgage fraud cases-a 400 percent increase from five years ago. The fraud includes sale-leasebacks, quitclaims, stripping homeowner equity and misleading homeowners into signing over deeds.

“As new legislation aims to help troubled Americans avoid foreclosure, a growing number of con artists are taking advantage of unsuspecting homeowners,” said Travis Hamel Olsen, president of National Short Sale Center. “The fraud usually comes through in the fine print, but foreclosure rescue teams and highly suspect scammers are basically taking homes through a variety of means, resulting in foreclosure and eviction.”

Dozens of fake websites mimic the fonts and layouts of government websites that are designed to help struggling homeowners modify their mortgages. Some unsuspecting homeowners have fallen prey to unscrupulous companies that charge up to $7,000 before disappearing.

“Considering that there could be more than 3 million foreclosures starts in 2009, it is safe to assume that frauds and scams will affect a large number of American homeowners,” said Olsen. “In fact, more than 50 percent of homeowners working on short sales with NSSC have been approached by circumspect individuals or companies.”

With 20 percent of the nation’s homeowners underwater, the government is introducing new legislation aimed to steer struggling homeowners toward short sales. The government’s new plan will pay a servicer $1,000 for completing a successful short sale, it will pay the borrower $1,500 to assist with relocation expenses, and it will pay second-lien holders who release their claims up to $1,000.

The government is prosecuting several mortgage scam companies, but new ones pop up every day. The government’s Fraud Enforcement and Recovery Act of 2009 allocates $500 million to the FBI, Justice Department, Secret Service and Postal Service to combat mortgage fraud.

“Under no circumstances should anybody be paying an upfront fee to complete a short sale,” said Olsen. “Unscrupulous companies use myriad ways to take advantage of unsuspecting homeowners.”

Many struggling homeowners are confused about short sales and fall for deceptive offers, including phone calls, letters, advertisements and e-mails (also known as phishing).

“Usually if the deal seems too good to be true,” cautioned Olsen, “then it probably is.”

For more information contact Marc Tow at 1-888-445-4140 or visit www.towlawbankruptcy.com

Stripping a Second Home Mortgage

marctow — Thu, 18 Jun 2009 17:58:35 +0000

In the present economic times many individuals are living with financial decisions causing them to hold assets, such as houses, automobiles and boats, whose values have plummeted. Individuals are living in properties whose values have dropped far below the mortgages or driving cars, which are valued at a third of the loans. Those individuals with financial difficulties are looking for assistance through the bankruptcy courts in an attempt to get out from underneath all of the debts and liens acquired, which now vastly exceed their current assets.

There are two types of liens, which can be attached to an individual’s property or assets. The first is a voluntary lien, which is basically a situation where you have agreed to use the asset as collateral for a debt, i.e. mortgages and auto loans. A non-voluntary lien is one that a creditor imposes on you and that gives them the right to force you to sell the asset so that they can be paid, for example: judgments against you or tax liens. These liens are either secured or unsecured as to the asset they are attached to.

The most common issue for an individual nowadays is the situation where a homeowner who has a first and second mortgage on a primary residence is facing bankruptcy and wondering if they have the ability to save the family home. As real estate markets fall and the fair market values of the homes fall, homeowners are left with mortgages that far exceed the current fair market value of their homes. There is a process which could be of help to many in this situation and it is called “lien stripping”.

“Lien stripping” refers to the process of reducing a secured claim to the value of the underlying collateral. It uses the combined effect of 11 U.S.C.A. § 506(a) and 11 U.S.C.A. § 506(d) to bifurcate the lien into secured and unsecured. The secured lien is allowed in the amount up to the fair market value of the property at the time of the stripping. The balance of the lien, which exceeds the fair market value of the property, is now deemed unsecured.

Liens can be stripped off of the debtor’s assets in Chapter 11 or Chapter 13 when there is not enough equity in the assets. Section 506(a) and 506(d) of the Bankruptcy Code acknowledges that a lien is only a secured claim to the extent there is value in the asset to which it attaches. To the extent that the claim exceeds the value of the collateral, that portion of the lien is now unsecured. The most common application of lien stripping is the reduction of car loan liens to the present value of the vehicle however it is currently used more often with home mortgages in bankruptcy situations. Lien stripping with car loans has been limited to vehicles purchased over 910 days.

The Bankruptcy Code does permit a bankruptcy plan to “modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence”. Section 1322 (b)(2). This section provides protection to the holder of a claim secured only by a lien on the debtor’s principal residence by prohibiting any modification of the terms, however the issue arose as to if this section precluded “lien stripping” of undersecured residential mortgages in the face of Bankruptcy Code section 506 which appears to permit bifurcation of undersecured mortgages and voiding of unsecured portions of the mortgage lien. At least two bankruptcy court judges sitting in Massachusetts have permitted such bifurcations.

In any event, there is an exception as to the lien on a principal residence lien and that is if there is a second or third lien on the same property. In this instance those liens, lien stripping is available to render them totally unsecured if the first mortgage balance equals or exceeds the value of the personal residence. The exception is only if there are two distinct mortgages on the property, not a refinancing situation. It should also be noted that the limitation of lien stripping of first mortgages only apply to personal residences, it will be allowed for a mortgage on a building used for business or renting.

As always, all situations relative to a strategy for bankruptcy and lien stripping should be discussed in detail with a bankruptcy attorney to understand all your avenues open to you.

The forgoing article on lien stripping as a chapter 13 bankruptcy tool was written by the Law Office of Goldstein and Clegg, LLC.

Article Source: http://EzineArticles.com/?expert=Michael_A._Goldstein

For more information contact Marc Tow at 1-888-445-4140 or visit www.towlawbankrputcy.com

Interview with Marc R. Tow

marctow — Fri, 12 Jun 2009 17:41:07 +0000

What is your opinion regarding clients educating themselves on legal issues?
I encourage clients to read, question and find answers. A client that is informed has the power to make an intelligent decision regarding their situation. As a lawyer, I often give my clients articles and information to read so that they can be knowledgeable about their case. Even though I have 30+ years in the field I still know that it is necessary to stay informed on the new laws and bankruptcy regulations.

Are you willing to review documents prepared by clients?
I am not willing to review documents prepared by clients. There’s an old adage that says, “He who has himself for an attorney has a fool for a client.” There’s a reason why this is true. Bankruptcy and financial issues, like most legal issues, are extremely complex. It requires a thorough analysis of the situation and a strong understanding of the laws and regulations. I cannot advise on a document that was created by someone else because I don’t have a full understanding of the situation and where the information has come from.

Are you willing to coach clients who want to represent themselves?
I am not willing to coach clients to represent themselves. Bankruptcy is used to discharge hundreds of thousands of dollars in debt, and if the process: factual, financial and legal are not integrated into a plan, things can go horribly wrong. The last thing that I want, as a lawyer, is for a bankruptcy to get denied, which is something that can happen if people choose to represent themselves. Bankruptcy is not a simple thing. People need the help of an experienced lawyer to evaluate and handle their case when such large amounts of money and their livelihood are at stake.

Why did you decide to be a lawyer?
From a young age I knew that I had the skills to be a lawyer. I was always the most diplomatic and problem-solving member of my family so it seemed natural for me to grow up and go into law. My mind thinks in logical and problem solving ways. Give me a puzzle or riddle and I will get it solved, tell me to write a novel, and that’s another story!

What work experience and education helps you be a better lawyer?
Since my offices opened in 1978 I have been working in financial, bankruptcy and real estate law. I thoroughly understand real estate lending, investments and foreclosures. I have advised hundreds and hundreds of clients on their financial hardships and no two cases are the same. I am a good listener when it comes to my clients and am an avid reader after work, which helps me keep up to date on the laws regarding my cases.
As for education, I worked my way through college and law school and then went on to get my real estate license. I now use my education, work experience and real estate and business know-how to solve the different problems of each of my individual clients.

Why did you decide on your primary area of practice?
I have been a practicing lawyer for over 30 years and find that assisting everyday people with financial difficulties is the most rewarding. In this day and age people from all across America are facing financial issues and need competent, reliable and accurate advice. I see many companies out there trying to scam and take advantage of those who are at their lowest point in life, so I feel as though it is my duty to get out there and give good, solid advice. I like the feeling of giving clients hope and restoring their dreams through practical solutions.

What do you like best about your career?
My career allows me to provide insight, solutions and assistance to individuals companies and families that are going through difficult times. It allows me to help, and it allows me to see the success of clients whom I’ve helped to rebuild their financial losses.

Tell us about your law firm:
Our law firm provides advice, counsel and direction in the techniques to resolve financial and real estate problems and crises. I established the law firm in Newport Beach in 1978 and we have been going strong ever since. Besides offering law services and counsel, we provide seminars and workshops that educate those interested on how to solve their financial problems and how to rebuild after bankruptcies.

What are your strengths and style?
I feel as though my greatest strength is listening to my clients and empathizing with them. My goal for my first meeting with a client is to really hear their problems before assessing the situation. This way, I feel comfortable that I am providing the correct solutions.

I also feel that it is important to keep these lines of communication open throughout the case. I am the type of lawyer that lives and breathes the law, so my clients can rest assured that they can reach me, even after hours, for help with their case.

Personal Interests:
I enjoy reading a good book, watching old movies, playing a round of golf and going to watch baseball games. Go Yankees

Hello world!

marctow — Fri, 12 Jun 2009 17:15:12 +0000

My name is Marc Tow. I’ve been practicing law here in Orange County for 30 years. I help people in financial trouble understand their options, make choices, and take actions to prevent debt problems from spiraling out of control. My goal is to empowers my clients so that they can make informed decisions that protect the security of their families.

Thank you for visiting my blog, if you need to contact me you can call 1-888-445-4140.