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Posts Tagged ‘foreclosure prevention’
Monday, July 13th, 2009
  While the government’s mortgage modification and foreclosure prevention program has not been gaining as much traction as many in the administration may have wished, other states have found a different solution. Connecticut and New Jersey unveiled their own mortgage foreclosure modification programs, and have found them to be increasingly successful. In Connecticut, over 2,500 people have participated in the program since its introduction in July of 2008, with a 60% success rate at avoiding foreclosure. Another small number were able to negotiate stays on the foreclosures until they could find another housing option. In New Jersey, 614 borrowers have qualified for mediation, with a little over a third of them negotiating to keep their homes.
In both states, borrowers who receive foreclosure notices are sent letter by the judicial branch informing them of their eligibility for the programs, so why are the numbers so different? 40% of those eligible participate in Connecticut, but only 5% participate in New Jersey. The difference between the two programs is that in New Jersey, borrowers must go through financial counseling before proceeding to mediation. In Connecticut, the borrowers go directly to a mediation. Connecticut borrowers still do generally receive counseling, but it generally occurs after the first mediation.
We have spoken at length about the ways in which counseling is able to help borrowers at risk for foreclosure (as well as those considering a reverse mortgage). However, the more hoops a borrower must jump through, the less likely they are to participate in a program. If it turns out to be true that the 35% difference in borrowers who are participating in these programs is primarily due to whether or not counseling is required, it would be an interesting case for reducing the emphasis on counseling in order to increase participation and results. Yet it would be surprising if this was the only reason for the change in participation rates.
Tags: Connecticut, counseling, foreclosure, foreclosure modification, foreclosure prevention, housing counseling, mediation, Mortgage, mortgages. reverse mortgages, New Jersey, reverse mortgage
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Wednesday, July 8th, 2009
 To follow up on today’s earlier post about foreclosure prevention, the press release below shows an example of a reverse mortgage helping save a borrower from foreclosure. While this story focuses on one case, this scenario has become more and more common, and is a reminder of one of the most important ways in which reverse mortgages can dramatically benefit borrowers.
ROCKLIN, California (July 8, 2009) – Premier Reverse Closings (PRC), divisions of National Closing Solutions and Placer Title, along with Lend America and Generation Mortgage, recently saved a borrower from the brink of foreclosure with a reverse mortgage that closed in a record seven days from the opening of the title and settlement order.
PRC worked closely with the broker, Lend America, and the lender, Generation Mortgage, to fund the reverse mortgage just one day prior to James Atkins’ June 25th sale date.
In order to close the loan in such a short time, PRC spent extra time addressing his existing liens and clearing his title report, verifying insurance and hiring an experienced notary to verify and witness Atkins’ signing of his loan documents. Since the terms of Home Equity Conversion Mortgages (HECM) mandate a three-day right of rescission period, PRC had to obtain and review all proper documentation in just three days, leaving one day to fund the loan after the rescission period expired.
Atkins, a pastor at a church in Missouri, was thrilled with the entire process from beginning to end. “I did all I could, but I couldn’t do anything more. I prayed with all of my heart that things would work out for the best,” Atkins said. “Lend America and [PRC] worked so hard to close my reverse mortgage, and I am so grateful they saved my home.”
Atkins’ loan officer, Ed Sanchez with Lend America, knew that this could be done in a short amount of time, but is still so grateful for how quickly it could come together. “The teamwork between my processing team, the lender and PRC was absolutely outstanding,” said Sanchez. “It was truly a team effort for this hour-by-hour deadline that we faced.”
PRC’s Senior Vice President of Operations, Tina Meilinger, acknowledged this closing was an anomaly.
“Our PRC team has experience in closing more than 115,000 reverse mortgage loans, but none in just seven days,” said Meilinger. “This is definitely a first, and has raised the bar, with hopefully more transactions to follow.”
Meilinger knows that PRC plays an integral role within the reverse mortgage process, saving many borrowers from financial hardships daily.
“PRC is proud to have helped in the process of saving Mr. Atkins from foreclosure,” said Meilinger. “There is nothing better than knowing Mr. Atkins can have his family over to his home after church on Sunday, or that he will never have to worry about making monthly mortgage payments.”
Tags: borrower, borrowers, foreclosure, foreclosure prevention, generation mortgage, Lend America, National Closing Solutions, Placer Title, PRC, premium reverse closings, reverse mortgage, reverse mortgages
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Wednesday, July 8th, 2009
 The housing crisis is not over for many borrowers. According to an article in the Wall Street Journal, the percentage of mortgages 60 days or more late rose to 5.65% in May, up from 5.48% in April. It is the highest level on record. In addition, the number of homes in the foreclosure process jumped, after remaining stagnant for a few months due to several moratoria. Around 257,000 homes entered the foreclosure process in May, up 5.7% from April, and 34% from a year ago.
What is perhaps most interesting about these statistics is that the number of subprime mortgages going into foreclosure has decreased 16% from a year ago. Yet the number of prime mortgages going into foreclosure is up 83%. This change may reflect the effect the recession has had on middle and upper-middle class borrowers. While many of these borrowers may have had the salaries and credit scores to qualify for a prime mortgage in the past, the market has shed many white collar jobs in recent months, affecting these borrowers, many of whom had money invested in the stock market and did not see this coming. Even so, these statistics are quite sobering.
It is important to remember that reverse mortgages can be one way for senior borrowers in these situations avoid foreclosure. For more information, see Foreclosure Prevention.
And let’s hope that next month’s numbers are better than these!
Tags: borrowers, delinquent, foreclosure, foreclosure prevention, May, Mortgage, mortgages, prime mortgage, prime mortgages, reverse mortgage, reverse mortgages, subprime mortgage, subprime mortgages
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Monday, June 1st, 2009
 A recent New York Times article focuses on Fannie Mae’s HomeSaver Advance Program, a now-deemphasized program that gave borrowers up to 15,000 in unsecured personal loans to cover missed mortgage payments. However, 70% of the borrowers who took out these loans defaulted. This instance helps highlight the importance of financial counseling. The article closes with the example of a New York City program that makes foreclosure avoidance loans available to borrowers who have undergone counseling. This program has given out 15 loans so far, none of which have defaulted.
Reverse mortgage counseling has come under fire recently, and several states have been debating whether to pass legislation requiring counseling before all reverse mortgage transactions. It is often argued that counseling is necessary in order to ensure that the senior borrower understands the reverse mortgage transaction, but if one looks closely, it appears that counseling has the potential to do a lot more than that. As counselors at the NRMLA Orlando Road Show explained, the purpose of counseling is partly to make sure that the borrower will still have enough money to live on after the reverse mortgage. The financial counseling portion of the reverse mortgage counseling process is perhaps underestimated, but it articles such as the one referenced above help show that financial counseling may be another way to help homeowners avoid foreclosure–and ensure that the steps they take in the short term will not penalize them in the long run.
Tags: borrowers, counseling, counselors, fannie mae, financial counseling, foreclosure, foreclosure avoidance loans, foreclosure prevention, foreclosures, homeowners, HomeSaver Advance Program, legislation, loan, loans, Mortgage, mortgages, New York Times, NRMLA, reverse mortgage, reverse mortgages
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Thursday, April 30th, 2009
 Lisa Madigan, Illinois Attorney General At the NRMLA conference in Chicago, one of the speakers was Brenda Grauer, who works for the Office of the Illinois Attorney General. During her presentation, I learned that the government is available as a resource for seniors trying to avoid foreclosure.
As previously discussed, generally in order for a reverse mortgage to be used to help a senior avoid foreclosure, the borrower needs to get a short pay from the bank. The short pay reduces the amout the senior owes the bank, which can then be paid off through the reverse mortgage. But banks are often reluctant to grant short pays.
Ms. Grauer explained how the Attorney General’s office is working with many lenders to try and help seniors (and others) receive short pays so that they can stay in their homes. The office is getting stays on orders of foreclosure, and, as of when she spoke, none of the people they were working with had lost their homes. It seems that the Attorney General’s office is therefore a good place to go for seniors in search of resources or aid in avoiding foreclosures. While all states have different resources available, it is a worthwhile call to make with nothing to lose and much to gain.
The number for the Homeowner’s Helpline of the Office of the Attorney General in Illinois is 1-866-544-7151.
Tags: Attorney General, Chicago, foreclosure, foreclosure prevention, helpline, homeowner, Illinois, Lisa Madigan, NRMLA, Office of the Illinois Attorney General, resource, reverse mortgage, reverse mortgages, senior, seniors
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Monday, March 23rd, 2009
We just released a new article which explains how reverse mortgages can be used to prevent foreclosures–even in cases of bankruptcy.
 Avoid Foreclosure The article discusses how, if the youngest spouse in the household is 62 years of age or older, the household could be eligible for a reverse mortgage, even if they are bankrupt or at risk of foreclosure. It emphasizes the importance of time in the process. A short pay agreement on the mortgage is usually necessary and that can take time to negotiate.
Depending on the value of the home and the amount remaining in the mortgage, the proceeds from the reverse mortgage can be used to help the lendee get out of debt, settle the bankruptcy, or simply to provide some extra cash. The NYTimes wrote a story about a week ago that detailed how a reverse mortgage had helped a New Jersey couple get out of bankruptcy and avoid the foreclosure of their home and their business. While there are many people who might be able to benefit from a reverse mortgage, those at risk of foreclosure or who have filed for bankruptcy are two of the groups of people who potentially have the most to gain from a reverse mortgage, but who might not be aware that they are eligible. This is even more significant because when foreclosure is eminent, time is of the essence. If you or someone you know is in this position, act quickly. You could save your home.
Tags: bankrupt, bankruptcy, foreclosure, foreclosure avoidance, foreclosure prevention, hecm, reverse mortgage, reverse mortgage alternative, reverse mortgages
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While the government’s mortgage modification and foreclosure prevention program has not been gaining as much traction as many in the administration may have wished, other states have found a different solution. Connecticut and New Jersey unveiled their own mortgage foreclosure modification programs, and have found them to be increasingly successful. In Connecticut, over 2,500 people have participated in the program since its introduction in July of 2008, with a 60% success rate at avoiding foreclosure. Another small number were able to negotiate stays on the foreclosures until they could find another housing option. In New Jersey, 614 borrowers have qualified for mediation, with a little over a third of them negotiating to keep their homes.
