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Showing posts with label REOs. Show all posts
Showing posts with label REOs. Show all posts
Thursday, June 18, 2009
Monday, June 1, 2009
New Federal Law Affecting Distressed Properties
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
NEW FEDERAL LAW AFFECTING DISTRESSED PROPERTIES
This week, President Barack Obama signed into law the Helping Families Save Their Homes Act of 2009 to help homeowners and lenders avoid foreclosure. Previously included in this bill was a measure to allow bankruptcy judges to modify mortgage loans for principal residences, but the U.S. Senate did not pass this "cram-down" legislation.
The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect California REALTORS® and your clients include the following:
HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.
LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.
NEW FEDERAL LAW AFFECTING DISTRESSED PROPERTIES
This week, President Barack Obama signed into law the Helping Families Save Their Homes Act of 2009 to help homeowners and lenders avoid foreclosure. Previously included in this bill was a measure to allow bankruptcy judges to modify mortgage loans for principal residences, but the U.S. Senate did not pass this "cram-down" legislation.
The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect California REALTORS® and your clients include the following:
HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.
LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.
Friday, May 22, 2009
Wednesday, May 13, 2009
Definitions: REO, Bank Owned, Foreclosure, Short Sale..Homes for sale...What's the difference?
Because I sell Real Estate in Ramona, and we have seen our fair share of distressed properties as of late, many of my clients have been asking me what is the difference between Bank owned homes, Shortsales, foreclosures, and REO'S. There is a quick answer and a more detailed answer to this question. So, Let's start with definitions:
REO - definition of REO - Real Estate Owned. Property which is in the possession of a lender as a result of foreclosure or forfeiture.
Bank Owned Homes- Home has foreclosed and bank now owns the property.
Short Sales- Could also be a pre-Foreclosure Short Sales- homes sold prior to foreclosure sale and "short" of a payoff.
Foreclosures- the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default.
The first two- the bank now owns the property. Short Sales and Foreclosures are generally still owned by the seller not the bank yet.
I will continue to explain in further detail these types of properties. Depending on where the home lies in the continuum, could have an impact on your buying process. There can also be legal and tax implications upon sale, so please, if you are a seller, contact your attorney and CPA for more details on your particular situation, each is different and unique and your Real Estate Agent, unless they are a practicing Attorney cannot advise you on the legal aspects.
REO - definition of REO - Real Estate Owned. Property which is in the possession of a lender as a result of foreclosure or forfeiture.
Bank Owned Homes- Home has foreclosed and bank now owns the property.
Short Sales- Could also be a pre-Foreclosure Short Sales- homes sold prior to foreclosure sale and "short" of a payoff.
Foreclosures- the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default.
The first two- the bank now owns the property. Short Sales and Foreclosures are generally still owned by the seller not the bank yet.
I will continue to explain in further detail these types of properties. Depending on where the home lies in the continuum, could have an impact on your buying process. There can also be legal and tax implications upon sale, so please, if you are a seller, contact your attorney and CPA for more details on your particular situation, each is different and unique and your Real Estate Agent, unless they are a practicing Attorney cannot advise you on the legal aspects.
Copyright 2009-Regina Flores
Free list of ACTIVE MLS listings for all homes in Ramona or San Diego County
Ramona REOs, Ramona Forclosures, Ramona Bank Owned properties, which so much to choose from where to begin??? You can start on my website under MLS Listings and get all the latest Ramona Homes for sale or call me and I would be happy to send you a list of what's available. Happy Home shopping!Copyright 2009-Regina Flores
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