Mortgage Complaint Window Now Open!

Got a beef with your mortgage company or loan servicer?

Lots of people do, and thousands of them have been turning to a federal complaint hotline for action — or at least a quick response from the lender.

The Complaint FormConsumer Financial Protection Bureau opened up its bulging online complaint hotline files to public view last week, and the contents are startling: Though the CFPB’s complaint window is open to various financial disputes — credit cards, student loans, credit reporting agencies, bank loans to consumers — by far the biggest source of complaints is home mortgages. Nearly half of all disputes reported to the agency by consumers are mortgage related: problems with payments, escrow accounts, servicing, FHA and conventional loans, home equity lines, second mortgages, reverse mortgages, loan modification delays, application foul-ups and the like.

The new database (accessible at www.consumerfinance.gov and updated daily with fresh cases) doesn’t provide the gory details of specific alleged misdeeds. Nor does it identify the consumers filing complaints other than by ZIP code and the general nature of their dispute. But it does identify the banks or mortgage lenders that are the targets of the complaints and whether they responded to the agency to try to resolve the matter.

In the vast majority of cases, lenders have responded within 15 days — often apparently to the satisfaction of their customers. When the CFPB receives a complaint, it verifies that the consumer is indeed a customer of the bank or mortgage company, but does not attempt to determine whether the allegations by the consumer have merit. It contacts the lender, provides a secure portal for a reply, then informs the consumer about the lender’s response using a separate secure portal.

When the case is posted to the online database, it’s catalogued as either in progress, closed, closed with an explanation, closed with monetary relief to the consumer, closed with non-monetary relief or closed with dispute comments added to the file by the consumer indicating unhappiness with the lender’s response.

Does the hotline system really work?

Bob Ogle of Tucson, whose case number and ZIP code are posted in the database, describes himself as a big fan. He filed a complaint about a mortgage servicing company in Texas Feb. 8 protesting a pending foreclosure action against his mother. Not only was the CFPB’s response swift, the agency contacted the loan servicer immediately and obtained a response. The foreclosure was canceled and the entire dispute resolved.

“I got a letter stopping the foreclosure on Feb. 12,” he said in a telephone interview. “How can you do better than that?”

However, banks and mortgage lenders aren’t as thrilled about the newly released complaint database as Ogle is. For one thing, they are named, even if the complaint ultimately turns out to have been unfounded. Also, the searchable feature of the database allows anyone to check on the number of complaints filed against any specific lender, which some large banks consider unfair given that their high volumes of transactions are almost guaranteed to generate more complaint filings than would smaller lenders.

For example, of the roughly 50,000 mortgage complaints in the database at the end of March, 15,179 — about 30 percent — named Bank of America. Another 8,030 named Wells Fargo, 2,257 were against JPMorgan Chase, and 2,147 named Citibank, all among the highest-volume mortgage originators and servicers active in the market. Nearly 3,400 named Ocwen Financial Corp., a company that specializes in servicing large portfolios of underwater, delinquent and subprime mortgages.

Richard Hunt, president and CEO of the Consumer Bankers Association, says the CFPB’ s approach on this is flawed. “A better service to consumers,” he said, “would have allowed for collaboration between the CFPB and financial institutions to determine if a complaint is indeed valid, prior to publication.”

Bank of America spokesman Dan Frahm maintains that his company’s disproportionate share of complaints in the database stems from its purchase of Countrywide Home Loans, which was one of the largest and most controversial loan originators and servicers during the subprime boom. Despite these legacy problems, Frahm added, 98 percent of the mortgage-related complaints sent to it by the CFPB “have been closed.”

How can you use the CFPB mortgage hotline if you’ve got a dispute with a lender or bank?

You can file online at www.consumerfinance.gov/Complaint

Call toll-free at 1-855-411-CFPB.

Snail mail: CFPB, P.O. Box 4503, Iowa City, Iowa, 52244.

SOURCE: National Real Estate Development Center


Banks Tackling More Foreclosures

The number of homes in foreclosure is on the rise but that doesn’t mean more homeowners are falling into financial difficulty, according to figures released today by the foreclosure tracking firm RealtyTrac.

Nearly 1.5 million homes were in the foreclosure process during the first quarter of 2013, according to RealtyTrac, a 9 percent increase from the same period last year. However, company officials say that’s due to banks tackling a backlog of delinquent properties and not from an increase in homeowners falling behind on their mortgage payments.

U.S. Foreclosure Inventory

Foreclosure settlement cited

“Delinquent loans that fell into a deep sleep after the robo-signing controversy in late 2010 are gradually coming out of hibernation following the finalization of the national mortgage settlement in April 2012,” said Daren Blomquist, RealtyTrac vice president. “The settlement provided some closure regarding accepted foreclosure processing practices, and as a result lenders have been reviving more of these delinquent loans and pushing them into foreclosure over the past 12 months.”

The National Foreclosure Settlement, reached by state attorneys general and the federal government with five major lenders, arose out of claims of improper foreclosure practices and established foreclosure guidelines the lenders agreed to follow, in addition to commitments to provide billions in mortgage relief for at-risk borrowers.

Total still nearly one-third below peak

Overall, the number of homes in the foreclosure process is still 32 percent below their peak of 2.2 million in December 2010, according to RealtyTrac’s U.S. Foreclosure Inventory Analysis, released today.

The current figures were driven by a 59 percent annual increase of homes in the pre-foreclosure inventory, those that have been served a notice of default but not yet scheduled for a foreclosure auction. The number of homes scheduled for auction has actually declined by 25 percent since the first quarter of 2012, according to RealtyTrac, while the inventory of bank-owned properties is down by 3 percent over the same period.

An estimated 35 percent of homes in the foreclosure process but not yet repossessed by lenders were reported as vacant, apparently abandoned by their owners in anticipation of foreclosure.

Big jump in mega-mansion foreclosures

Over three-fifths of all homes in the foreclosure process had loan amounts of less than $200,000, while another 30 percent had loan values in the $200,000 to $400,000 range. At the same time, the biggest increase by far was among homes with mortgages in excess of $5 million, which shot up by 120 percent over the past year.

By contrast, the next –biggest increase was in the sub-$50,000 category, which saw a 60 percent increase in foreclosure inventory over the past year, while those in the $50,000-$300,000 categories saw increases of 30-40 percent. The smallest increases by far were in the $400,000-$5 million range, none of which exceeded 10 percent.

SOURCE: Mortgage Loan

Real Estate Provisions in “Fiscal Cliff” Bill

ObamaSigningABillOn Jan. 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff.”

The bill was signed into law by President Barack Obama on Jan. 2.

Below is a summary of real estate related provisions in the bill:

Real Estate Tax Extenders

  • Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
  • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
  • 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
  • 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012

Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers.  These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000.  These thresholds have been increased and are indexed for inflation and will rise over time.  Under the formula, the amount of adjusted gross income above the threshold is multiplied by three percent.  That amount is then used to reduce the total value of the filer’s itemized deductions.  The total amount of reduction cannot exceed 80 percent of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years.  They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012.  Had we gone over the fiscal cliff, Pease limitations would have been reinstituted on all filers starting at $174,450 of adjusted gross income.

Capital Gains

Capital Gains rate stays at 15 percent for those in the top rate of $400,000 (individual) and $450,000 (joint) return.  After that, any gains above those amounts will be taxed at 20 percent.  The $250,000/$500,000 exclusion for sale of principal residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax.  After that the rate will be 40 percent, up from 35 percent.  The exemption amounts are indexed for inflation.

FORECLOSURE: What It Really Means & How to Avoid It.

Mortgage debt relief extension should help distressed home owners

One measure tucked into Congress’ action to avert the Fiscal Cliff will help distressed home owners by approving the one-year extension of the Mortgage Debt Relief Act.

Since 2007, that law has given homeowners an exemption on federal taxes when they obtain debt forgiveness on their primary home. For example, a family with a short sale for $100,000 less than their mortgage would otherwise have to pay taxes on that difference as if it were income. It also applies when lenders forgive a portion of mortgage principal without the home changing hands.

Without a tax exemption, some homeowners might chose to lose the home to foreclosure instead of facing a large tax bill.

The Mortgage Debt Relief Act will last until Jan. 1, 2014.

“This extension will help struggling homeowners take full advantage of the assistance offered them by the national mortgage settlement and other foreclosure relief programs.”

9 Ways to Avoid Foreclosure:

REINSTATEMENT: Bring the loan current
FORBEARANCE: Temporary repayment plan
REFINANCE: New loan with reduction in monthly payments
LOAN MODIFICATION: Modify original loan terms
SELL THE PROPERTY: Use equity to payoff or pay difference
RENT THE PROPERTY: Must make loan current
SHORT SALE: Negotiate with bank to accept sale under loan amount
DEED IN LIEU OF FORECLOSURE: “friendly foreclosure:
BANKRUPTCY: Will stall foreclosure but not prevent it

Call today and allow our team of experts help you navigate a positive solution!


Mortgage In Trouble? You’re Not Alone.

When you struggle with your mortgage payments, you become frozen. Petrified. Not knowing what to do, you do nothing. Know that you’re not alone, but people who take action are far more likely to get the most positive outcome. So do something.

A free government program called Making Home Affordable may be your solution to getting back on track.

The team at Hallmark Idaho Properties understands the process and is here to help. As Certified Short Sale Experts® we know how to get the results you need.

Real Help. Real Answers. Right Now.

Short Sales Make Up Bigger Share of Market

More lenders and home owners are viewing short sales as a better alternative than foreclosure. Reversing a trend in the third quarter, pre-foreclosure sales are now outnumbering sales of bank-owned properties.

Pre-foreclosure sales accounted for about 22 percent of all residential sales in the third quarter, according to the latest data from RealtyTrac. Distressed sales, in general, accounted for about 41 percent of the market share in the third quarter — still a significant make up of the real estate market.

“The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk home owners are realizing that short sales are often a better alternative than foreclosure,” says Daren Blomquist, vice president of RealtyTrac.

Short sales increased 15 percent in the third quarter over the previous quarter, according to RealtyTrac.

Pre-foreclosure properties sold for, on average, $191,025 in the third quarter — a 3 percent drop from the second quarter.

The discounts are still big for potential buyers: In the third quarter, the average sales price of a pre-foreclosure property was 27 percent below the average sales price of a non-foreclosure residential property, RealtyTrac reports.

SOURCE: National Association of Realtors®

Nondelinquent Borrowers Soon to Be Eligible for Short Sales

Mortgage giants Fannie Mae and Freddie Mac have issued new rules, which will take effect Nov. 1, 2012 that will allow short sales for underwater borrowers who have never missed a mortgage payment.

Previously, Fannie and Freddie allowed only home owners who had missed payments to qualify for a short sale.

Eligible borrowers under the new rules will need to show a hardship to qualify for a short sale, however. Hardships may include unemployment or a death of a spouse.

Inman News points out one potential flaw to the new rule, however: The nondelinquent home owners who undergo a short sale will likely take just as big a hit to their credit score than if they had missed loan payments and gone into a foreclosure.

“Under current national credit reporting practices, those nondelinquent borrowers are likely to be treated the same for credit scoring purposes as severely delinquent owners who go to foreclosure after months of nonpayment, or who simply toss back the house keys and walk away in strategic defaults,” writes Ken Harney for Inman News.

Credit agencies use no special coding to indicate that a short sale was without delinquency. Therefore, home owners could see their credit scores drop 150 points or more after the short sale.

However, officials at the Federal Housing Finance Agency, which oversees Fannie and Freddie, told Inman News they are “in discussions with the credit industry” to explore ways to fix the credit score problem for those who haven’t missed a payment but undergo a short sale.

SOURCE: Realtor® Daily News

Housing Alert: Short Sales May Be in Big Trouble

As lenders plow through a backlog of over five million delinquent mortgages, short sales are becoming an ever more popular escape route. A short sale is when the bank allows a home to be sold for less than the value of the mortgage. The bank takes the loss, but that loss is generally less than a more costly foreclosure.

The government has been pushing more short sales at Fannie Mae and Freddie Mac through financial incentives, and banks are streamlining the process. Short sales have been gaining so much steam, they actually surpassed sales of foreclosed properties last spring, according to LPS Applied Analytics’ Home Price Index. But all the progress that has been made could end abruptly.

A short sale is debt forgiveness. Debt forgiveness is taxable. In order to help the huge volume of troubled borrowers and promote more short sales, Congress in 2007 passed the “Mortgage Forgiveness Debt Relief Act and Debt Cancellation.” The debt forgiveness from a short sale or a mortgage principal reduction would no longer be taxable. That act is part of many Bush era tax cuts that expire at the end of this year. Without an extension, short sales would grind to a halt, as might mortgage modifications that involve principal reduction.

“Realtors believe if the legislation is not extended, households who are already struggling to pay their mortgages will be further burdened with tens of thousands of dollars in additional taxes that they probably can’t afford to pay because the IRS would count the cancelled debt as income,” said Jamie Gregory, a lobbyist for the National Association of Realtors.

Short sales and mortgage principal reduction are the foundation of the $25 billion mortgage servicing settlement signed early this year by the nation’s largest lenders and state attorneys general. As of the end of August, first lien principal reduction trial modifications were offered and begun for about 28,000 homeowners, totally approximately $3 billion of potential relief, according to the settlement monitor, Joseph A. Smith. Banks have granted $10.6 billion in consumer relief, which would include short sales. More than a quarter of a million short sales were completed in the first half of 2012, according to RealtyTrac.

So what is the possibility of congress extending the tax relief? One Hill-watcher puts it at 60-40. The Senate Finance Committee passed a package of tax extenders right before the recess, including a one year mortgage relief extension, but leadership in the House of Representatives has not figured out how it wants to handle these extenders. With the looming “fiscal cliff,” tax cuts are an increasingly tough sell. This particular extension does have bipartisan support, but that doesn’t always mean passage in Congress, especially around a presidential election.

“It could be an uphill fight to get this passed this fall, as it will likely get caught up in larger debate of over taxes, deficits and the financial cliff. But we believe that it is a helpful provision for distressed borrowers, as getting a tax bill on forgiven debt can be another punch in the gut for families who are already facing financial hardship,” says David Stevens, president and CEO of the Mortgage Bankers Association.

Rep. Jim McDermott (D-WA), who introduced legislation last March to extend the tax relief for three years said in a release, “Collecting federal income tax on relief intended for struggling homeowners is not only bad policy, but is simply wrong.”

With great uncertainty as to the fate of the tax relief, some say short sales could get a boost this fall. Borrowers and banks alike may rush to get in before the expiration, which could help boost overall home sales numbers.


VIDEO: Housing ‘Short Sales’ Could Get a Boost With New Plan

Homeowners could soon have an easier time selling their homes for less than what they owe on their mortgages, under new guidelines from a federal housing regulator and mortgage-finance giants Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency on Tuesday announced measures to make “short sales” of underwater homes easier for homeowners, including extending help to people who have financial difficulties but haven’t missed mortgage payments.

Homeowners whose property values have fallen could have an easier time selling the home for less than the outstanding mortgage amount under changes to be announced by a federal housing regulator.

In a short sale, holders of first and second mortgages, such as home-equity loans, must sign off on the deal because they are accepting less than the outstanding mortgage balance. While short sales help borrowers avoid foreclosure and are thus thought to be in the broad interest of the lending industry and the economy, real-estate agents and home sellers have long complained that they are lengthy and difficult to complete.

Short sales typically sell for a 10% discount to ordinary homes, compared with a 30% discount for foreclosures, said Sam Khater, deputy chief economist at real estate data firm CoreLogic Inc.

One part of the plan is for Fannie and Freddie to place a $6,000 cap on the amount of money holders of second mortgages can receive when the sale is completed, as a way to prevent the mortgage holders from haggling over their slice of the home-sale proceeds. Those second-lien holders would still be able to reject the sales if they saw fit.

Guy Cecala, publisher of Inside Mortgage Finance, a trade publication, said $6,000 may not be enough for many holders of second mortgages, who hold out on approving short sales because they don’t have the right to foreclose on properties and are seeking ways to get paid. “It isn’t a lot to offer,” he said.

The changes only affect underwater mortgages guaranteed by Fannie and Freddie, which back the bulk of U.S. home loans. The FHFA has the authority, as regulator for Fannie and Freddie, to force changes on the lending industry.

The housing regulator didn’t estimate how many people would now qualify for short sales, but about 4.6 million borrowers with loans backed by Fannie or Freddie are underwater, with 80% of those homeowners having missed no mortgage payments.

If more short sales are approved, banks could be forced to record losses on home-equity debt. The biggest holders of second mortgages in the U.S. are Bank of America Corp., Wells Fargo, J.P. Morgan Chase and Citigroup Inc. Representatives of all four banks declined to comment.

Mortgage holders have always needed to ensure that a short-sale agreement is legitimate and competitive, as there have been problems with fraudulent sales.

After seeing her income reduced and running up credit-card debt, Suzanne Gott, a 63-year-old in Mansfield, Mass., listed her home for a short sale in June, asking for $149,000 even though she owes $200,000 on the property. This week, she accepted an all-cash offer of $135,000. “I’m hoping that it’s over as soon as possible,” she said.

The rules go into effect Nov. 1 and also allow homeowners with missed mortgage payments and serious financial problems to submit fewer documents to be approved for a short sale. Homeowners will receive speedier approval if they are experiencing a financial hardship such as a lost job, divorce, death in the family or job relocation.

Earlier this year, the housing regulator set out formal timelines for short sales, saying that mortgage lenders would have to respond to a short-sale offer within 30 days of receiving it.

Short sales have been growing as a percentage of home sales. They made up 8.8% of home sales in May, up from 7.6% a year earlier and 6.5% in 2010, according to CoreLogic Inc.

SOURCE: Wall Street Journal

Idaho Foreclosure Filings Drop 54.5 Percent

Foreclosure filings in Idaho dropped 54.5 percent in the first half of 2012.

RealtyTrac, which tracks foreclosures, reported that foreclosure filings nationally fell 10.6 percent in the first six months of the year.

Jessie Hamilton, general counsel for Pioneer Title, said lenders are modifying more Idaho loans instead of foreclosing. He also said many lenders delayed foreclosures after an Idaho law took effect Sept. 1 requiring lenders to better inform borrowers about their options. Another factor, he noted, is that more short sales are going through. A short sale is where the lender agrees to take less than the borrower owes.

Mike Mooney, president of Bank of the Cascades Idaho Region, said a short sale gets the loan off a lender’s books faster than a foreclosure and is less expensive. The foreclosure sale process “takes longer, and you have uncertainty about price, and also commission and other expenses,” Mooney told the Idaho Business Review

SOURCE: Associated Press

Lead Generation

Market Statistics

  • 12.74,11.73,10.7,9.6,9.29,9.02,8.54,8.22,7.85,7.78,8.81,8.94

Information is deemed to be reliable, but is not guaranteed. © 2018