Upside Down Mortgage

Archive for May, 2009

Mortgage Fraud By Lenders

Question: Mortgage Fraud Question? I would like to hear from Attorneys.?

I recently had an offer to enter into a business partnership with someone. He wants to buy residential houses and sell them, I have good credit so I would buy the house in my name. He says he has buyers waiting to buy so that they can use them as rentals. I found out that he would pay them 10k or for buying the house. I asked an attorney about this & he said to pay a buyer for buying the house is illegal so I refused to enter into a partnership with him. The thing is I have bought one of my own houses, I sold it to him subject to the mortgage which means he legally owns the property but the mortgage is still in my name. If he sells the property to someone & pays a buyer which is basically commiting lender fraud and illegal according to the attorney. Do I have any liability in this transaction since my name is on the mortgage?

Answer: Yes.

Mortgage Fraud, Forbearance and Foreclosure

If you're new around here, you might want to subscribe to our Upside-Down Mortgage RSS feed. It's quite likely the only feed of it's type on the internet!

The foreclosure rate has been rising for quite a while now. With more job losses and homeowners falling behind on mortgage payments, there are more people upside down on their mortgages. On Thursday May 28th, the Mortgage Bankers Association said that a record 12 percent of homeowners with a mortgage were behind on their payments in the first quarter of this year, 2009. While the unemployment rate may hold steady, there are already too many people out of jobs and have no way to pay their mortgages.

The Subprime Crisis

It was not long ago when the real estate market was booming. But then the subprime lending crisis hit the market and everything changed. At that time borrowers with bad credit were able to borrow a lot of money because of the homes they were buying. However, soon they saw their home values dropping unexpectedly. Many of them ended up in foreclosure. Today, about 50% of homeowners with subprime, risky adjustable rate loans have defaulted on their loans or they are already in foreclosure. In some states, the problem is worse than others.

The Prime Crisis

With a lot of subprime borrowers defaulting all at once, the values of homes fell more and more and a lot of lenders were forced out of business. The problem became so severe that the government had to step in and rescued many lenders and financial institutions. As companies are forced to downsize in order to avoid having to file for bankruptcy protection, they lay off workers. With the jobless claims rising, more and more people cannot afford to pay their mortgage payments even when they have good fixed rate, traditional mortgages and they also have good credit.

Foreclosure and Upside Down Mortgage

The problem is spreading even if the jobless claim number has fallen recently and new home sales number is encouraging. The number of people without jobs are still high and some of them are holding onto their homes but they will not be able to hold on much longer if they cannot find jobs soon. They will eventually be foreclosed on. If their interest rates rise and they cannot refinance, added to the fact that home values probably will not rise so soon, they are going to find themselves in an upside down mortgage situation.

Mortgage Modification Laws

Question: How can congress pass legislation allowing bankruptcy judges to change terms on already written mortgages?

It seems like this would be challanged (sucessfully) in court since the laws when the contract was signed didnt allow modification. I can understand how they could mandate that future mortgages are capable of being modified but not those already written... seems kinda like ex post facto.

Answer: 1. Ex post facto means that Congress is prohibited from making a law retroactively punitive. i.e. Congress couldn't pass a law saying that drinking is illegal again and punish people who drank before the law went into effect. It affects criminal statutes only.

2. Congress is just being Congress. They know there is a large likelyhood that this can be overturned. They just want to tell peopl that they tried.

Mortgage Modification Law Firm 97% Success 100% Money Back G