Upside Down Mortgage

Archive for the ‘Predatory Lending’ Category

Predatory Lending Cook County

Illinois foreclosure listings represent the fourth highest in the country.

California is at the top of the list with 32,500 followed by Florida with

approximately 27,000 listings and Colorado at roughly 11,000 filings.

Combined with Illinois, these four states account for 52% of all homes in

foreclosure nationwide.

The staggering foreclosure rates in Illinois prompted Governor Rod

Blagojevich to file amendments to HB 4050, the Illinois Predatory Lending

Database Program. HB4050 protects consumers fight predatory lending

practices by shifting focus on the lenders who offer non-traditional types of

loans.

Under the proposed rules for HB 4050, Cook County first time homebuyers

and owners opting to refinance their primary residence will be

recommended for financial counseling if the loan they are considering

contains any of the following provisions:

? Permits interest-only payments;

? Allows payments that results in negative amortization;

? Total points and fees payable by the borrower exceed 5% of the

amount of the mortgage;

? Approval of the loan relies on the stated income of the borrower;

? A pre-payment penalty is included; or

? The financing transaction includes a second lien on the property,

often known as an 80/20 loan.

HB 4050 main purpose is to alert consumers that subprime lending

practices can lead to financial ruin. Todays housing market focuses so

much on the credit history of the homebuyer, and with some homebuyers

who have had past credit issues, spotty employment or not enough funds

for a down payment --- some lenders have gone to great lengths to get

their business. However, this practice is costing the same homebuyer way

more than they can afford ¨C without them even realizing it. By enacting HB

4050, these same homebuyers will be instructed and informed regarding

the types of loans available, the type of loan they are considering and

what it means to their financial future. Many of these items are not

currently provided by the lenders who practice subprime loan lending.

Luckily, Governor Blagojevich has an eye on his Illinois homebuyers and the

lenders who serve the Illinois residents. Currently, HB 4050 is in the pilot

program phase and is being piloted in Cook County. Illinois residents

outside of Cook County should expect to see it offered to them also in the

near future. The governors¡¯ mission is to see the Illinois foreclosure listings

numbers drop and this is a great start to realizing that mission.

About the Author:

Bob Smith is a freelancer but regularly writes for ForeclosureListingsNationWide.com. You can get more information on Illinois foreclosure listings at http://www.foreclosurelistingsnationwide.com.

Source - Illinois Foreclosure Listing Tops 11,000 Addresses, Governor Steps In!

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!

Countrywide Predatory Lending Settlement

The economic recession has affected a lot of homeowners. And in areas where the home values have declined significantly, many of them are now realizing the truth that they are unable to pay for their mortgages. As most of them were not ready for the risks involved with these loans, they are now finding themselves applying for countrywide loan modification to help avoid foreclosure.

Countrywide Financial Corporation is a Financial advertising and service company (which means that it has possession of stocks of other companies) that develops residential (Countrywide) mortgage banking and other dealings.

Through its National Homeownership Retention Program, the Bank of America provides their customers the significant help and resources that they need to maintain homeownership. It also aids their customers to achieve $8.4 billion to 400,000 Countrywide borrowers nationwide. Not only this, but Countrywide has started positive outreach to help suitable borrowers.

At this time, the Federal government is now encouraging all lenders to consider principal reduction for borrowers who meet certain requirements. If you are a borrower who meets a lender's requirements for a countrywide loan modification option, then chances are you are qualified for a reduction in your principal balance. Although not every homeowner can avail of this option, those who are suited to this will find it very helpful in avoiding possibilities of foreclosure. Here are some helpful guidelines to help you know if you might be eligible.

First, Countrywide settled claims that were valued to be $8.6 billion dollars to homeowners who were holding risky loans and ever since that original settlement, two other states were also included to help other borrowers as well. Borrowers living in these states have the option of applying for a principal reduction. The states that are included in the special Countrywide Loan Modification program are:

Arizona, Texas, California, Connecticut, Iowa, Illinois, North Carolina, Michigan, Florida, Ohio, and Washington - as well as Tennessee, Mississippi and Pennsylvania.  If you live in one of these states, then you may be qualified to participate in the Countrywide loan modification program offered as part of the predatory lending lawsuit.  However, should you be ineligible, then you can still apply for a reduction of payment in order to avoid foreclosure.

Second, for those homeowners who are stuck in Pay option Arm loans (this is where the loan balance actually augments with each minimum payment), then you are a good candidate for a principal reduction.

In most cases, each Countrywide loan modification is examined on a case by case basis, but borrowers can make the odds better by understanding the lender’s requirements for acceptance and the proper procedures on how to how to complete the application properly. It is highly recommended that homeowners apply for a Countrywide loan modification as most lenders have set aside billions of dollars to assist borrowers in saving their homes.

About the Author:

A Computer Engineering student and loves to travel. Reading current news in the internet is one of his past times. Taking pictures of the things around him fully satisfies him. He loves to play badminton and his favorite pets are cats.

For more inquiries, you may want to visit Countrywide Loan Modification or call directly at 1.888.864.1663 (TOLL FREE) for details.

Source - Countrywide Loan Modification: Do You Qualify for a Principal Reduction

Predatory Lending Recession

Writing a hardship letter to your mortgage lender may be the only chance you have to save your home from foreclosure. You must have a valid hardship to qualify for any type of loss mitigation. A hardship letter is a detailed explanation of a hardship in your life that has caused you to fall behind in your financial obligation to your mortgage lender. In your letter, outline the specific details of your reason for default along with supporting documentation. Your hardship must be temporary and you must now be in a position to begin making payments on your mortgage.

Important information you will need to write a letter of hardship include:

 

• Date
• Loan Number
• Reason for Default – Hardship
• Supporting Documentation
• Detailed events
• Dates of Events
• Your proposed outcome – what you would like to happen
• Documents supporting end of hardship

 

Some valid reasons for hardship that will be accepted in a hardship letter include:

 

• Death of Borrower
• Death of spouse or family member
• Unemployment
• Decrease in working hours
• Elimination of overtime or second job
• Involuntary job relocation
• Increase of expenses due to short term unemployment
• Mandatory pay reduction
• Decline in earnings for self employment
• Failure of business
• Short term or permanent disability
• Increase in expenses due to illness
• Divorce
• Incarceration

 

Keep your letter detailed and to the point.

Top Reasons Homeowners Fall into Foreclosure:

1. Loss of Job/Economic Recession – Many times circumstances are beyond the homeowners control like a job layoff due to downsizing or business closing or a slowdown in the economy.
2. Predatory Lending – Some lenders will approve buyers for amounts that are greater than they can really afford with high interest rates or with adjustable rate mortgages.
3. Divorce – Typically, a spouse is awarded the house in the divorce and can’t afford the payments on one income. Divorce rates are high; therefore this has become a common reason for foreclosure.
4. Medical Illness – Unexpected medical illness can cause great financial hardship but are a necessity. Medical expenses can cause you to fall behind in your mortgage.
5. Buying a Home Before Sale of Existing Home – Impatient home buyers will sometimes buy a new home before they sell their existing property. Having to pay two mortgages can cause a financial hardship.

About the Author:

Samples and information about letters of hardship to prevent or avoid home foreclosures.

Source - How to Write a Hardship Letter to Avoid Home Foreclosure

Blacks & Latinos Are Still Victims of Predatory Lending Part II (VIDEO)