The stop foreclosure message appears to have prevailed amid the recent hype surrounding the “robo signing” chaos created by mortgage lenders caught in the act of submitting fake and fraudulent affidavits to homeowners in need roll over and take their homes through foreclosures which in many cases are illegal. Large lenders have brought foreclosures to a halt. Among others, J.P. Morgan Chase, GMAC and Bank of America. Chase and GMAC have stopped foreclosures in 23 states. In response to increasing pressure from congressional investigations and legal proceedings, B out of A has announced that it will stop foreclosures in all 50 states. Here is the failure:

1. MORE TIME TO TRAIN A CREDIT MODIFICATION FOR THOSE REALLY QUALIFIED

Under the Making Homes Affordable Program (HAMP), homeowners who are in arrears with their payments and who qualify are given the opportunity to apply for a loan modification to their mortgage and must be considered for a loan modification if mortgage payments are more than 31% make up their income. The lenders agreed with the federal government in exchange for bailout funds to work with distressed homeowners and give those who qualify a loan modification they can afford based on verified financial criteria. Unfortunately, under the pressure of so many thousands of foreclosures pending and a lack of communication between the mortgage lender’s departments such as the collections and loss mitigation departments, a homeowner seriously considered for a loan modification often receives notification that the home is in foreclosure the collections department, while being advised by the loss mitigation department, will proceed to review for a loan modification and no foreclosure will occur during that period. The collections department and the loss mitigation department have not coordinated or communicated and the property is often sold in foreclosure. This is against the rules of the HAMP program. Completion of the foreclosure process will give lenders time to summarize their actions to ensure that (a) the collections and loss mitigation departments are in sync and are following HAMP’s guidelines. (b) Homeowners who truly qualify for the program will then receive the benefits of the program. Other alternatives are offered to those who do not qualify.

2. SHORT SALE BECOMES EASIER AND TIME SHORTS

It’s no secret that many homeowners at risk of foreclosure simply cannot keep their homes or find themselves in a home that they should never have bought due to changed financial circumstances. Still, these homeowners can avoid foreclosure on their records by selling the distressed property through a short sale. This means that the home is being sold for less than the mortgage on the property options to stop foreclosure. Whatever the difference is called a “short sale” as the full amount is not paid out. A short sale saves the lender the costs and expenses of foreclosure and secures a certain amount of money without the lender having to add the property back to their inventory, spend money on renovation or maintenance. It offers the homeowner a foreclosure free log. The problem was the time it takes for a lender to approve a short sale offer from a buyer. 90 to 120 days was the norm. At this point, the buyer usually loses patience and withdraws from the sale. Pausing the foreclosure process will give lenders, distressed sellers, and buyers more time to close a deal that best suits everyone. During foreclosure, lenders can focus on short sales and shorten the approval deadlines and remove the property from the books.

3. THE PROCEDURE OF THE AVAILABLE SHOULD HAVE MORE INTEGRITY

“Robo-signing” has clearly spoiled the already highly suspicious ways mortgage lenders handle foreclosures. Fraudulent documents filed in courts of law have severely damaged the integrity of the system and have wrongly resulted in foreclosures of properties that could qualify for a home loan modification or short sale. Now you can take your time to ensure that the laws on compulsory vo

By Adam

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