Equal Housing Lender emblem (Photo credit: Wikipedia)

A Loan Modification is a permanent change in one or more of the terms of a Borrower’s loan, allows the loan to be reinstated, and results in a payment the Borrower can afford.

Question 1: In utilizing the Loan Modification Option to bring an asset current, can the Lender include all fees and corporate advances?

Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified Principal Balance.

Question 2: May a Lender perform an interior inspection of the property if they have concerns about property condition?

Answer: Yes, per Mortgagee Letter 2000-05, page 20, the Lender may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the Borrower’s continued ability to support the modified mortgage payment.

Question 3: Can a Lender include late charges in the Loan Modification?

Answer: Mortgagee Letter 2008-21 states that the goal in providing the Borrower a Loan Modification is to bring the delinquent mortgage current and give the Borrower a new start; therefore, the Lender should waive all accrued late fees.

Question 4: When utilizing a Loan Modification Option, can a Lender capitalize an escrow advance for Homeowner’s Association fees?

Answer: HUD Handbook 4330.1 REV-5 (Paragraph 2-1, Section B, Escrow Obligations) states: Lenders must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

Question 5: Is there a new basis interest rate which Lenders may assess when completing a Loan Modification?

Answer: Yes, Mortgagee Letter 2009-35 states that the Lender shall reduce the Loan Modification note rate to the Current Market Rate. Please refer to Mortgagee Letter 2009-35 for more details.

Question 6: Are Lenders required to re-amortize the total amount due over 360 month period?

Answer: Yes, per Mortgagee Letter 2009-35, the Lender must re-amortize the total unpaid amount due over a 360 month period from the due date of the first installment required under the Modified Mortgage.

Question 7: What date is utilized when determining the correct interest rate for a Loan Modification?

Answer: The date the Lender approves the Loan Modification (all verification completed and servicing notes documented, reported to SFDMS) is the date that Lenders are to use in determining the interest rate.

Question 8: Will HUD subordinate a Partial Claim should a Borrower subsequently default and qualify for a Loan Modification?

Answer: If a Borrower subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.

Question 9: Are Lenders required to perform an escrow analysis when completing a Loan Modification?

Answer: Yes, Lenders are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

Question 10: Can a Lender qualify an asset for the Loan Modification Option when the Borrower is unemployed, the spouse is employed, but the spouse name is not on the mortgage?

Answer: Based upon this scenario, the Lender should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new Modified Mortgage Payment, but insufficient to pay back the arrearage. Once this process has been completed the Lender should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.

"Ask us about FHA loans to Remodel for Veterans" - NARA - 514242 (Photo credit: Wikipedia)

Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.

Purpose:

Section 203(k) fills a unique and important need for homebuyers. When buying a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.

For less extensive repairs/improvements, see Streamlined 203(k). For housing rehabilitation activities that do not also require buying or refinancing the property, borrowers may also consider HUD’s Title I Home Improvement Loan program.

Type of Assistance:

Section 203(k) insures mortgages covering the purchase or refinancing and rehabilitation of a home that is at least a year old. A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area. The value of the property is determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.

Many of the rules and restrictions that make FHA’s basic single family mortgage insurance product (Section 203(b)) relatively convenient for lower income borrowers apply here. But lenders may charge some additional fees, such as a supplemental origination fee, fees to cover the preparation of architectural documents and review of the rehabilitation plan, and a higher appraisal fee.

Eligible Customers:

All persons who can make the monthly mortgage payments are eligible to apply. Cooperative units are not eligible; individual condominium units may be insured if they are in projects that have been approved by FHA or the Department of Veterans Affairs, or meet certain Fannie Mae guidelines.

Eligible Activities:

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k) insured loans can finance the rehabilitation of the residential portion of a property that also has non-residential uses; they can also cover the conversion of a property of any size to a one- to four- unit structure. The types of improvements that borrowers may make using Section 203(k) financing include:

•structural alterations and reconstruction

•modernization and improvements to the home’s function

•elimination of health and safety hazards

•changes that improve appearance and eliminate obsolescence

•reconditioning or replacing plumbing; installing a well and/or septic system

•adding or replacing roofing, gutters, and downspouts

•adding or replacing floors and/or floor treatments

•major landscape work and site improvements

•enhancing accessibility for a disabled person

•making energy conservation improvements

HUD requires that properties financed under this program meet certain basic energy efficiency and structural standards.

Prefab/mobile homes for sale in Monroe, Washington. (Photo credit: Wikipedia)

These pages contain a list of properties that are owned by the Department and are currently for sale. All of the properties listed are repossessions and may include single family residences, condominiums and planned unit developments, farms, land, mobile homes on land, and mobile homes in parks. There are no multiple unit properties, as the Department does not lend on them. In these pages, highlighted words link to other CalVet pages.

You may access the list of properties for sale by either clicking on the county name or the city name that you wish to search. If a county or city name does not appear in the list, then there are currently no properties available in that location. In most cases, the Department displays a photograph of the property.

For most of these properties, we have entered into an exclusive listing agreement with a local real estate agent. Occasionally, some properties are sold directly by CalVet. Repossessed properties are available for purchase by anyone (you do not have to be a veteran).

The properties are marketed by the listing agent shown. Please contact them for additional information about the property or our procedures. The listing section contains their address, telephone number, and a link to a page where you may e-mail them, if e-mail is available. While most inquiries can be answered by the listing agent, you may also contact the CalVet Property Agent listed or call CalVet at (800) 952-5626.

Please read our additional information below if you are considering purchasing one of these properties. All properties are subject to prior sale.

Properties For Sale

This is a continuation from our “CalVet Properties for Sale” page, which we recommend you read first. These pages contain a list of properties that are owned by the Department and are currently for sale.

Each property is initially offered for sale through a sealed offer advertising period, which is a competitive process. A “for sale” advertisement shall appear in a local newspaper which services the area where the property is located, for a period of at least fourteen consecutive days. An asking price will be stated in the advertisement, but all offers will be considered. Only sealed offers are accepted during this period. Our form, “Offer To Purchase Repossessed Property” is available for downloading. Contact the listing agent shown for the starting and ending dates of this period.

The Department attempts to sell repossessed properties to the highest qualified offeror, however, we may make the determination that there are no acceptable offers. Highest qualified offeror is defined as the person who submits the highest acceptable offer (provides the highest net dollar amount from the sale) and who verifiably qualifies for the necessary loan. If the property does not sell as a result of the sealed offer advertising process, then it will remain listed for sale and open to offers at any time.

We recognize two different “As Is” concepts. The first involves selling the property “As Is without representation or warranty”, thus ending our involvement with the property when it is sold. We will do this without exception. The second “As Is” concept involves our willingness to do repairs during the escrow period. We may consider requested repairs, however they would be figured into the Department’s calculation of net dollar amount from the sale.

Prevailing CalVet loan terms, fees, and rates shall apply. CalVet financing involves several different loan programs and funding source types. Down payment requirements vary with the different loan programs. The availability of some funding source types depends upon the eligibility of the veteran. See a CalVet loan application package for further information. Also, non-qualifying veterans and non-veterans purchasing CalVet repossessed properties are limited in the loan programs and funding sources available to them, and are subject to an interest rate which is .5% (one-half percent) above the stated rate. A buyers signature on the CalVet application shall be evidence of the buyer’s acceptance of CalVet financing policies.

The properties are marketed by the listing agent shown. For additional information about the property contact them at the address or telephone number shown, or use the web site’s e-mail form. You may contact the CalVet Property Agent shown on matters which cannot be resolved by the listing agent. All properties are subject to prior sale.

United States Department of Housing and Urban Development Seal (Photo credit: Wikipedia)

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

How the Program Works

Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

How to Participate in Good Neighbor Next Door

Check the listings for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

The number of properties available is limited and the list of available properties changes weekly.

To learn more, please see our Good Neighbor Sales Frequently Asked Questions!

Comments and Questions

Every short sale is dependent upon the seller’s lender(s) consenting to the transaction and agreeing to release the lender’s security interest in exchange for less than what is owed. In some cases however, the lender’s approval of a short sale does not necessarily mean the lender relieves the seller of liability for repayment of the entire debt.

It is possible the seller can sell the home and still owe the unpaid difference, plus interest and penalties, to the lender (the “deficiency”). The lender may then seek a deficiency judgment against the seller for this difference. If the judgment is issued by a court, it could be in effect for up to 20 years if not paid sooner. This is one of the most fundamental issues that sellers must address in considering whether to sell property as a short sale.

Simply “walking away” from the property through foreclosure also does not necessarily relieve a seller of these debts as while Washington State is a “non-deficiency” state that only pertains to the foreclosing party. A homeowner could lose their property to foreclosure generally to the 1st mortgage lien holder and still owe the balance(s) from the 2nd mortgage or other lien holders.

A short sale is a very complex transaction that involves numerous issues as well as legal and financial risks. All sellers are advised to seek the advice of a lawyer and tax professional before proceeding with a short sale.

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Before proceeding with a short sale

•Understand a lender’s creditors options upon loan default

There are many types of liens and other obligations that are secured by real estate. These may be purchase loans, refinance loans, home equity lines of credit, contractor liens, IRS tax liens, DSHS liens for unpaid child support, or other obligations. The type of debt and type of property will determine what remedies a lender may have if you fail to make the required payments. The lender’s policies regarding forgiveness of debt, the tax consequences, your overall current or potential future financial strength, the lender’s willingness and procedure for processing a short sale request, and the number and nature of other recorded encumbrances (second mortgages for example) on the property are some of the many factors a seller should consider in deciding whether to pursue a short sale.

•Be aware of predatory rescue scams and short sale fraud

Homeowners worried about foreclosure may be susceptible to predatory “rescue” scams which may cost money with no results, result in the loss of the home entirely, or involve the seller in a fraudulent scheme. For more information, see this advisory from Fannie Mae (PDF)*.

Red flags of fraudulent schemes include:

◦Guarantees to stop the foreclosure

◦A promise that you can buy the house back or stay in the house following transfer of title

◦Upfront fees

◦Instructions not to contact the lender

◦Transfer of title or lease of the property

◦Requests that the homeowner execute a power of attorney

Report suspected scams to the Department of Financial Institutions at: www.dfi.wa.gov or 1-877-RINGDFI (746-4334).

•Contact a free HUD-approved housing counselor or contact your lender directly

Contact a HUD-approved housing counseling agency online at portal.hud.gov/portal/page/portal/HUD/i_want_to/talk_to_a_housing_counselor or call (800) 569-4287 or TDD (800) 877-8339 for advice on your options.

For additional HUD resources visit portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure

You may also contact the Neighborhood Assistance Corporation of America at: www.naca.com/refinance/refinanceTenStep.jsp

Try contacting the lender directly. To find the lender’s contact information, check the loan billing statement, or coupon book. Ask for the lender’s home retention department, loss mitigation department, (or other department that handles negotiation of loans in default); explain the situation and find out if the lender is willing to discuss options.

•Utilize free services available to Washington residents

Non profit foreclosure counseling is available by calling: 1-877-894-HOME (4663). If legal advice is needed, callers will be referred to a pro bono attorney through the Washington State Bar Association. More help and resources are available at www.WAHomeowners.com.

•Obtain legal advice

An attorney can advise you about your options and legal liability. You may be able to receive free or reduced fee legal assistance from one of these sources:

Northwest Justice Project, www.nwjustice.org, (206) 464-1519 or 1-888-201-1012

Your county’s local Bar Association

•Obtain tax advice

For Mortgage Forgiveness Debt Relief Act and Debt Cancellation tax information, go to www.irs.gov/individuals/article/0,,id=179414,00.html

•Be aware of the consequences of committing waste

Damaging the property or removing fixtures such as sinks, toilets, cabinets, air conditioners, and water heaters may result in liability to the lender for “waste.” In other words, the lender may be able to sue you for damages if you have physically abused, damaged or destroyed any part of the property.

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Short sale considerations

•First, understand that a short sale may not discharge the debt. You should know whether you will still owe your lender money (a deficiency) after the short sale. You should know this before you close the sale of your home.

Even if a lender agrees to a short sale, the lender and any junior lien holders may not agree to forgive the debt entirely and may require you to pay the difference as a personal obligation. This outstanding personal obligation could result in a subsequent collection action against you. For example, a lender may accept the short sale purchase price to “release the lien” on the property but still require you to pay the full amount of the original debt. You must be certain of the terms of any short sale before making a decision. All agreements between you and the lender must be in writing. Consult an attorney regarding whether the lender is entitled to pursue collection of any deficiency. Obtain any debt forgiveness agreements with the lender in writing but be aware that the language used in these agreements can be extremely confusing and even misleading. Seek the advice of legal counsel before accepting the lender’s terms.

•Second, under that a short sale may result in a higher tax debt

A short sale in which the debt is forgiven is considered a relief of debt and may be treated as income for tax purposes. The Mortgage Forgiveness Debt Relief Act of 2007 created a limited exemption to allow homeowners to pay no taxes on debt forgiveness; however, only cancelled debt used to buy, build or improve a principal residence or refinance debt incurred for those purposes qualifies for this tax exemption. For more information on the tax consequences of debt relief, seek professional tax advice and go to www.irs.gov and conduct a search regarding the Tax Relief Act.

If you decide to pursue a short sale, understand that the process will likely take several months or more to complete. Consider taking the following actions.

•Contact a qualified real estate professional

Interview several real estate professionals and ask about their experience in short sales, the number of short sale transactions they have handled, their education and training in short sales and inquire about any past or pending lawsuits or disciplinary actions.

•Investigate documentation and eligibility

Documentation and eligibility criteria for short sales vary depending on specific lender and investor guidelines. Generally, you must prove that you are financially incapable of paying the loan. The lender will consider this when determining the costs of accepting the short sale versus foreclosing. You will have to document your financial situation. If you have funds to pay the deficiency, a lender will not necessarily allow a short sale. However, some lenders will not require you to dip into retirement accounts to fund the deficiency. These issues will have to be negotiated with your lender.

•Determine the amount owed on the property

All debt and costs must be factored in before a lender can determine whether a short sale is more economical for them. The analysis will include the delinquent loan, all other recorded debt (past due homeowner’s association fees, unpaid property taxes), and the costs of a sale (closing costs, brokerage commissions, and necessary repairs). If you have more than one loan on the property, a short sale will require the approval of all lenders.

•Determine the estimated Fair Market Value of the property

You must prove to the lender that the home is worth less than the unpaid loan balance plus closing costs. Consult a real estate professional or an appraiser for assistance in estimating the value of the property.

•Consult legal counsel

Legal counsel can help you determine whether a short sale is the best option and can advise you during the short sale process. A short sale is a complex transaction.

•Be aware of the impact on your credit score

The impact of a short sale on your credit score depends upon a variety of factors, including late or missed payments. A short sale may appear on your credit report as “pre-foreclosure redemption,” “paid in full for less than full balance” or other similar term. It is possible that a short sale will have a different impact on your credit than a foreclosure or deed in lieu of foreclosure (or any other outcome). But, beware that once you miss mortgage payments, your credit rating will be severely impacted. Some lenders will tell you that they will not consider you as a short sale candidate unless you are behind on payments. Do not intentionally withhold mortgage payments, solely for short sale consideration, without first consulting legal counsel.

•Understand there may be a waiting period before you can buy another home

Your ability to qualify for a loan to purchase another home after a short sale will likely be impacted because of the impact on your credit score. It may be some time before a lender will loan you the money to purchase another home.

•Home Affordable Foreclosure Alternative (HAFA) program

The HAFA program was designed to give homeowners alternatives to a foreclosure, which include incentives for completing a short sale. If your home sale can close as a HAFA transaction, you will emerge owing no deficiency. However, it can be very difficult to qualify as a HAFA transaction. For more information on the options available, visit the HAFA program website www.makinghomeaffordable.gov/hafa.html.

To find the option for which you may be eligible. See www.makinghomeaffordable.gov/eligibility.html.

To find out if your mortgage servicer participates in the HAFA program go to www.makinghomeaffordable.gov/get-assistance/contact-mortgage/Pages/default.aspx.

For more information, visit: the Washington Department of Financial Institutions website: www.dfi.wa.gov.

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Options other than short sale

A short sale may not be your best course of action. Consider all your options before making a decision.

•Loan workout

Reinstatement: Paying the total amount owed by a specific date in exchange for the lender agreeing not to foreclose.

Forbearance: An agreement to reduce or suspend payments for a short period of time.

Repayment Plan: An agreement to resume making monthly payments with a portion of the past due payments each month until they are caught up.

Claim Advance/Partial Claim: If the loan is insured, a homeowner may qualify for an interest-free loan from the mortgage guarantor to bring the account current.

•Loan modification

The lender may agree to change the terms of the original loan to make the payments more affordable. For example, missed payments can be added to the existing loan balance, the interest rate may be modified or the loan term extended. Lenders may use government program modifications or may use their own criteria. Loan modifications may be temporary or permanent. Loan modification resources include:

Making Home Affordable: www.makinghomeaffordable.gov

National Foreclosure Mitigation Counseling Program: www.findaforeclosurecounselor.org/network/home.asp

Homeownership Preservation Foundation: www.995hope.org or 1-888-995-HOPE

•Refinance

If the lender will not agree to a loan workout or modification, the homeowner may be able to refinance the loan with another lender. The HOPE for Homeowners program will refinance mortgages for homeowners that can afford a new loan insured by HUD’s Federal Housing Administration. More information about HUD’s refinance program.

•Deed-in-lieu of foreclosure

The lender may allow a homeowner to “give back” the property. This option may not be available if there are other liens recorded against the property. If a lender accepts title to property in Washington State through a deed in lieu of foreclosure, the owner’s debt owing to that lender is likely forgiven but sellers should have their paperwork reviewed by legal counsel to insure that outcome.

•Work out sale

The lender may allow a specific amount of time for the home to be sold and the loan to be paid off. The lender may also allow a buyer to assume the loan as a method to purchase the property even if the original loan was non-assumable.

•Bankruptcy

If you are considering bankruptcy as an option, consult with an attorney that specializes in bankruptcy law.

•Foreclosure

Allowing the lender to foreclose is another option. With a foreclosure, the foreclosing lender may be prohibited from seeking any additional payment from you. However, other creditors with debt secured by the real property may still be able to claim the amounts owing to them. There are other pros and cons to allowing foreclosure.

Ultimately, only you and an attorney can decide if foreclosure is the best option for you. Ask an attorney about the possibility of owing money to any of your creditors after foreclosure, the impact on your credit rating, and tax consequences. Also, seek professional tax advice about the tax consequences of a foreclosure and review the IRS information at www.irs.gov.

Half million dollar house in Salinas, California under foreclosure. (Photo credit: Wikipedia)

U.S. Department of Justice

WASHINGTON—Two California real estate investors have agreed to plead guilty today for their roles in a conspiracy to rig bids and to commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Charges were filed today in U.S. District Court for the Northern District of California in Oakland, Calif., against Eric Larsen of San Leandro, Calif., and Timothy Powers of Alamo, Calif., for their participation in bid-rigging and mail-fraud conspiracies at public real estate foreclosure auctions in Contra Costa and Alameda counties, Calif. Powers is charged with participating in the conspiracy in Contra Costa County from as early as May 2009 until about December 2010, and Larsen is charged with participating in the conspiracy in Alameda County from as early as February 2009 until about January 2010.

“The Antitrust Division will vigorously pursue fraudulent schemes that eliminate competition from the marketplace and cause financial harm to victims,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The collusion taking place at these auctions preyed on the misfortune caused by the unprecedented rate of foreclosures and lined the pockets of colluding real estate investors with funds that otherwise would have gone to lenders and, at times, homeowners.”

“The FBI and the Antitrust Division are partners in the fight to bring to justice those who engage in fraudulent anticompetitive practices at foreclosure auctions,” said FBI Special Agent in Charge Stephanie Douglas. “We are committed to holding those individuals accountable for the damage they have done to the real estate market and to unsuspecting victims.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in auction records in order to obtain selected real estate offered at public foreclosure auctions in Alameda and Contra Costa counties at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

According to court documents, Larsen and Powers conspired with others not to bid against one another, but instead designate a winning bidder to obtain the title to selected real estate offered at public real estate foreclosure auctions in Contra Costa and Alameda counties. Larsen and Powers also were charged with conspiracies to use the mail to carry out a fraudulent scheme to divert money to co-conspirators away from mortgage holders and others by holding private auctions open only to members of the conspiracy and awarding the selected real estate to the conspirators who submitted the highest bids. These private auctions took place at or near the courthouse steps where the public auctions were held. The department said that Larsen and Powers also took steps to conceal the payoffs to conspirators for not bidding competitively and caused false and misleading statements to be made on records of public auctions regarding the total purchase price of the selected real estate.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.

The charges against Larsen and Powers are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in Contra Costa County and Alameda County. To date, as a result of the investigation, 10 individuals have agreed to plead guilty.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.

Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.

Mortgage debt (Photo credit: Wikipedia)

If you can’t afford your mortgage payment and it’s time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you. HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls “short” of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.

In either case, HAFA offers benefits that make the transition as favorable as possible:

•You can get free advice from HUD-approved housing counselors and licensed real estate professionals.

•Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls “short” of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.

•In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.

•HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.

•When you close, HAFA provides $3,000 in relocation assistance.

Arnold Schwarzenegger (Photo credit: Wikipedia)

Governor Arnold Schwarzenegger signed Senate Bill 94 (Calderon) which prohibits any person, including real estate licensees and lawyers, from demanding, charging, or collecting an advance fee from a consumer for loan modification or mortgage loan forbearance services. IF YOU ARE APPROACHED BY ANY PERSON REQUIRING UP FRONT FEES FOR THESE SERVICES DO NOT PAY THEM.

There are also non-profit agencies that can assist you without charging you a fee. For information on non-profit housing counseling services, use the following links:

Federal Housing Administration

Hope Alliance Web site

If you have already entered into an agreement with a licensed real estate broker for loan modification or other mortgage loan forbearance services prior to October 11, 2009 and that broker had received a “no objection” letter from the Department of Real Estate, they are permitted to continue providing those services for you according to the terms of the contract. However, they are NOT permitted to collect any further advance fees from you. For a list of those individual and corporate real estate brokers who had received “no objection” letters, CLICK HERE

For more information on this subject please read the following alert: http://www.dre.ca.gov/pdf_docs/FraudWarningsCaDRE03_2009.pdf. You may also call the Mortgage Loan Activities Unit at (916) 227-0770.

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While northern Nevada (areas like Reno-Sparks) might be seeing a slight resurgence in home sales, the same cannot be said of the south. Las Vegas and the surrounding areas have actually seen an increase in empty homes. Currently, there are almost 170,000 vacant homes in southern Nevada, almost twice the number of empty homes in 2000 (during the last census).

The housing market bust has taken more than just the wind out of the market’s sales – it’s taking homeowners out of their homes. A very high percentage of the homes now standing empty are foreclosures, most of which were owned by upside down homeowners (those who owed more than the home was worth after the market crash). Quite a few of these homeowners simply handed the homes back to the bank once they realized just how bad their situation really was.

The news continues to get worse for the area, as well. While the state’s Foreclosure Mediation Program has been a good thing for many homeowners, it’s not enough to stem the tide. Currently, home prices are plummeting around Las Vegas (and in many other areas of the state). The largest reason for that continued depression is the increasing incidence of short sales and foreclosed homes on the market. The average price of a home has dropped from almost $300,000 to just over $115,000 in most areas, leaving homeowners holding a very large bag. As forces continue to push home prices lower, more and more homeowners will feel the pinch and the rate of foreclosure is expected to move even higher.

Further fueling the problem is the fact that Nevada’s unemployment rate is not getting any better. No work equates to no money, and more homeowners will face the loss of their homes because of it.

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Florida has a long history with expensive real estate. Even property located inland can be quite pricey, much less that found along the state’s massive amount of coastline. All that cost equates to a huge potential for foreclosures with the real estate industry in shambles. Florida actually has one of the highest rates of foreclosure in the nation. However, it seems that at least one law firm handled those foreclosures improperly, and now is being forced to pay $2 million in penalties.

The firm handled cases for several different banks, all of which have come under scrutiny recently for signing the forms without actually investigating the foreclosure cases, as mandated. Some documents were even notarized improperly. In the case of the Florida law firm (Marshall C. Watson), homeowners found that their forms were signed robotically, and that some forms were even forged outright. Some even did not have their foreclosure notices served correctly.

The ongoing scandal has touched far more than just Florida, though, and this law firm will not be the only one forced to pony up funds for penalties on these cases. Many major banks (like Chase, Wells Fargo and others) have been implicated, and the crisis actually spans the entire nation. Federal litigation is in process, though most banks have reached a settlement agreement, in which they express no guilt, but do offer some recompense and security for homeowners and potential buyers.

The most direct result of the fiasco is that buyers have had their confidence in banks shaken yet again. This is not good news, and the good done by the settlement is questionable in the face of how these banks have handled the entire situation.