Christina Dunham's Random Real Estate Musings

Loss Mitigation Specialists from Ten Lenders including Countrywide, Bank of America, JP Morgan Chase/WaMu and Downey Savings to be present

Solano County’s foreclosure rate is nearly four times the national average, with one in 12 homes foreclosed in the past year, and home prices dropping 30 to 40 percent over the same period. It is one of the California counties hardest hit by the subprime mortgage crisis.

In October of this year, Mabuhay Alliance, a Filipino-American non-profit organization, spearheaded a movement to get the Vallejo City Council and the Solano County Board of Supervisors to issue a moratorium on foreclosures. The resolution was unanimously passed on October 29^th.

As part of Solano County’s efforts, the City of Vallejo is hosting a free foreclosure intervention clinic at the Solano County Community College on 545 Columbus Parkway on Saturday, December 13th. The event will run from 12:00 p.m. to 5:00 p.m. and organizers expect to serve up to 300 troubled homeowners. You do not need to be a resident of Solano County to participate in the clinic.

Loss mitigation specialists from several banks including Countrywide Home Loans, Bank of America, Citi Mortgage, Wells Fargo, JP Morgan Chase, WaMu, HSBC, IndyMac Federal Bank, Downey Savings and EMC Mortgage will be available to review loan modification requests on the spot.

In addition, volunteer housing counselors, mortgage counselors and attorneys will be on hand to provide valuable information and assist you in identifying next steps as well as making decisions regarding your home and finances.

Housing counselors can evaluate your current financial situation and discuss loan modification and pre-foreclosure options. Mortgage counselors can review your mortgage documents to answer your questions about interest rates, pre-payment penalties, and other mortgage terms.

The volunteer attorneys can answer your questions about the foreclosure and/or bankruptcy process, tax liabilities, debt liability, and other potential judgments.

There is no cost, and pre-registration is required. We recommend arriving up to 30 minutes early as attendees will be entertained on a first come, first serve basis and only the first 300 homeowners will be served. On-line registration is available at www.mabuhayalliance.org/foreclosure. Deadline for pre-registration is December 8, 2008.

Tips on how to speed through the line and ensure audience with your lender – download the forms below from www.mabuhayalliance.org/foreclosure and:

• Sign and date the Authorization to Release Information
• Complete the Intake Form
• Download the Checklist of Documents
• Complete the Monthly Budget Form

Print out the completed forms and bring the necessary supporting documents with you, including copies of your mortgage documents, 2006 and 2007 W-2s, as well as most current pay stubs, in order to have a productive one-on-one meeting with your lender.

The free Foreclosure Intervention Clinic is presented by Mabuhay Alliance in collaboration with NaFFAA, United Way of the Bay Area, and the Filipino Community of Solano County, and is hosted by the City of Vallejo and Solano County.

For more information, call Mabuhay Alliance at 858-586-7382 or email info@mabuhayalliance.org.

According to a survey by the National Association of Realtors (NAR), California is the most expensive real estate market in country. Californians’ spend more of their monthly income on housing (35 percent) compared to other markets. What happens when rates adjust and their mortgage payments increase? Especially in areas where property values have dropped dramatically, homeowners are struggling to maintain their increased mortgage payments and make ends meet.

Foreclosure Forecast:
Nationwide, there are currently 541,301 homes in foreclosure, almost double the figure from this time last year, and 283,548 individuals filing for bankruptcy. In California, over 139,500 homeowners are delinquent on their mortgages and over 179,200 homes are in foreclosure.

If you find yourself part of this statistic, then act fast – the sooner you communicate with your mortgage lender, the better. There is a big difference in what you can do to protect your house and your credit at day 1 and day 120. Lenders typically begin calling when you are 10 to 16 days late on you mortgage. Once the payment is 30 days delinquent, the collection attempts become more aggressive. Around the 90^th to 120^th day, lenders may initiate formal foreclosure proceedings, especially if you have not made attempts to arrange a workaround.

According to an update of Freddie Mac's "Foreclosure Avoidance Research Survey," homeowners are generally unaware of many of the options available to them when struggling to make a mortgage payment. Worse, the study found that 20 percent of people say that nothing would happen after missing three or more mortgage payments because "it takes a while for anything to happen if a person is late on a mortgage payment."

Robin Stout Migala, senior delinquency resolutions manager for Freddie Mac, says that most homeowners don't realize that Fannie Mae and Freddie Mac, the largest investors in the secondary mortgage market, encourage mortgage servicers to avoid foreclosure whenever possible. They grade servicers on how well they're working out delinquent loans. "We not only rank them, we pay them to do workouts. They get a certain dollar amount for every workout type. We spent $7 million in cash bonuses" on the program last year, Stout Migala explains.

Before paying down credit cards, doctor bills or other low priority debt, pay your mortgage first. While being late on a credit card payment could mean a collection, being late on your mortgage poses a more severe consequence: foreclosure. To prevent becoming part of that statistic, here are some other options to consider:

Refinance your Mortgage
If you are only 30 to 60 days late on your mortgage, you still have a chance to refinance into a program which may help you greatly reduce your monthly mortgage payment. Depending on your credit and current loan balance, you may even be able to get some cash-out of up to 90 percent of the value of your house to help consolidate your debt and tied you over until you are back on your feet.

With the 30-Year Fixed rate for loan balances below $417,000 dipping to 4.875% today, now may be a good opportunity to refinance into a long-term loan program.

Consult with a Local Realtor
If you feel your financial issues might be longer-term, consider pocketing the equity you’ve built by selling. Contact a local real estate agent to obtain a Comparative Market Analysis Report to find out the value of your home, its marketability and its possible sale price. While this might not be the ideal solution, it is better than letting the bank sell the house for less than the best price and helps you avoid a foreclosure on your credit report. If property values in your area have suffered, your real estate agent can help arrange for a “short-sale,” wherein your home is listed and sold for less than the loan balance owed to your lender.

Contact your Lender
The truth is that lenders would prefer you stay in your home than foreclose, which could cost thousands of dollars and drag on for a year or more. The sooner you call them (using the toll-free Customer Service number on your loan statement), the better your options. They may be willing to arrange either a forbearance, repayment plan or a loan modification. Forbearance is an agreement to temporarily let you pay less or nothing while you get back on your feet. Repayment plans include extending the grace period for making late payments, skipping one to six payments for a year or two, or accepting reduced payments from one to eighteen months.

With a loan modification, lenders may lower the interest rate for a certain number of years, lower your loan amount, or lengthen the term of the loan, thus reducing monthly payments. This could help provide some breathing room for those with short-term financial set-backs, such as job loss, divorce, or medical leave. Lenders typically do not charge for loan modifications, but do require submission of a complete loan modification request package. Check your lender’s website for their specific requirements.

Sit down with a Housing Counselor
If you need assistance or coaching in putting together your loan modification request package, sit down with a trained housing counselor to find out your options. Beware of Internet Scam artists posing as non-profit credit counselors or foreclosure mitigation specialists. To find a reputable credit counselor or to get more information about the foreclosure process, visit www.hud.gov.

To speak with Filipino housing counselors, www.mabuhayalliance.org, a HUD-certified organization that assists homeowners in distress. Mabuhay Alliance will be holding a free Foreclosure Prevention Clinic on Saturday, December 13 in Solano County. Visit www.mabuhayalliance.org/foreclosure for more information.

Seek Legal Advice
If foreclosure is imminent, talk to your lawyer regarding your legal rights. Some homeowners simply turn over their deed to the lender instead of fighting the foreclosure process, but a knowledgeable attorney can help determine whether there are some legal defenses to your foreclosure. California is a “Non-Judicial State” which means there is no civil litigation, no court, no judge, no sheriff. Consumer law is complex. When emotional distress impairs decision making, having an expert on your side to spot defenses can help save your home.

Save your Home
The best way to save your home is to act NOW. Begin working on a solution before your mortgage woes get out of hand. For more information about any of the options above, feel free to contact me at contact@christinadunham.com.