The December 1, 2009 new Obama Administration housing help plan is much like the one released February 18, 2009, only difference now the administration is being harder on the banks. With mounting foreclosures the Obama Administration’s plan to help troubled borrowers will help some but not all. At present only a small fraction of people are receiving permanent loan modification less than 5% of the trial adjustments on loans owned or guaranteed by Freddie Mac were converted to permanent modifications as of 30 September 2009. So while Americans facing foreclosure are waiting for a modification, others are going into foreclosure, 14.41% in the 3rd quarter, according to the mortgage bankers association. If no one knows why the conversion rate is low, then this is an issue which needs to be addressed. The banks need to be held accountable for their end of the low modification rate. Borrowers that qualify for a long term modification can keep the lower payments for 5years. At the end of the 5 year period the interest rate will be set to the rate at the time of the adjustment. This is why an income requirement is so critical. If the payments being made are too low then the loan modification would be pointless and damaging, causing negative amortization. Negative amortization will make the balance due high than before the modification. Needless to say your financial documents are extremely important.

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A short sale is one way to save a property from being foreclosed. However, the process is not easy at all. Some sellers and buyers who went through this type of real estate transaction may even say that it is hard to close a short sale deal. This opinion may be brought about the financial liabilities attached to the property. Basically, a short sale may be a good option if a homeowner defaults on his loan balance, which consequently puts the property on the verge of foreclosure. He should appeal to his lender to discount his balance and permit short selling of the property. Afterwards, the proceeds would then all be diverted to the lending agency. But the finality of this sale process is intensively dependent on the lender. It takes a lot of time before the lending institution would approve the short sale. The bank loss mitigation stage and repetitive follow ups of documentation are only two factors affecting lengthy waiting time for the approval.

In order to be successful with this type of deal, the seller must learn how to put up a proposal the lender would willingly accept. The latter party should also be agreeable to cooperate. Another thing the homeowner ought to have is a listing agent with strong negotiation skills. Such professional could hasten the decision making process of the lending agency. If these are ensured in hand, then the next stage of accepting buyer offers can proceed. Note that there are many properties short selling on the market, thus attractive and right pricing is an utmost need. Once the house is enlisted, buyers can approach the bargain table. However, all the buyers should be ready to patiently wait for whose offer was accepted. The lender once again deliberates the offers. Some offers may be deemed acceptable by the seller, but the lender thinks otherwise. Thus, closing the sale is slowed down once more.

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I am asked this question everyday. Not everyone is going to have the same alternatives. However, understanding your options is the first step to saving your home and your sanity. Is a Loan Modification for me? The Making Homes Affordable Plan is President Obama’s loan modification plan that helps homeowners who are struggling to make their monthly mortgage payment stay in their homes. This plan requires lenders to reduce monthly payments to no more than 31 percent of the homeowner’s monthly income. The first step in this plan is to lower the interest rate of the loan—sometimes as low as 2%. Second, if the mortgage payment is still too high with the reduced interest, then the loan may be extended to a 40 year term. Third, if the monthly payment is still not affordable, then there may be a reduction of the principal of the loan.

Is a loan modification what you need? It is if you want to keep your home. I see loan modifications being given every day, allowing homeowners to stay in the home they have worked so hard to keep. Why do I need to defend my foreclosure with an attorney? Once you are given a complaint to foreclose, take that complaint to an attorney so legal responses can be given to the complaint. The response should be specific to each point/count made in the complaint; and affirmative defenses should be formulated for your individual case. The attorney you hire should know foreclosure law, mortgage law and how to properly prepare and answer the foreclosure complaint. If you fail to answer appropriately you risk your right to bring any affirmative defenses against the lender.

Do you need to defend against a foreclosure? If you want to save your home and your credit, the answer is yes. Even if you are working on a loan modification, are in the middle of a short sale, or simply want to avoid foreclosure on your credit you must take legal action to prevent the foreclosure process. Should I agree to a short sale and leave my home? If you want to throw the towel in or you do not qualify for a loan modification, then a short sale is a good option. A short sale is when a lender accepts less than what you owe on the property and agrees to the sale of your home. With a short sale, you need to find a realtor experienced in short sales; and an attorney who can properly negotiate the short sale with your lender. The short-sale process is similar to a loan modification and must be properly executed so as not to delay the closing and ultimately lose the interested buyer.

Should I file Bankruptcy? If so, when and which Chapter should I file? Bankruptcy is a perfectly legitimate way to stop foreclosure, put an end to lawsuits, protect paychecks from garnishment, and regain control of your financial situation. However, this should be your final option after having tried reaching a loan modification, you have defended your foreclosure with a real estate attorney and time is ticking towards the foreclosure sale date of your house. In the Chapter 7 Bankruptcy there is no loan modification option and if you stop paying your mortgage you could lose your home. In the Chapter 13 Bankruptcy you can save your house and you are given time to pay off your debt. Do not lose hope. Changes and new programs are being offered to help homeowners every day. Even though this is a time of great challenge, do not forget the true meaning of life—the love of your family, the beautiful children you may have and the beautiful place you live in. Fight for what you want, exercise, regularly, read happy books, and watch the program Funniest Home Videos. Soon you’ll be smiling again!

Do not hesitate to e-mail me at dania@fap-law.com or call me at 305-254-4492 for an appointment. The initial consultation is free so you have nothing to lose and only knowledge to gain. Dania S. Fernandez & Associates, PA 10205 South Dixie Highway, Ste. 204 Pinecrest, FL 33156 <www.daniafernandez.com>

The Chase loan modification program is offered by JP Morgan Chase Bank, which is JP Morgan Chase & Company. They work through 24 Chase Mortgage Centers. This program, which was announced on December 31, 2008, gives person-to-person help for those not only with Chase Bank loans, but also Bear Stearns and Washington Mutual, who they acquired… Chase calls themselves “the largest bank by market value.”

Of course, you can’t just walk in and they’ll touch you with a wand and all your troubles will be over. This is work. It is hard work for those who are not used to working with forms and finances. Just the fact you can meet face-to-face with a loan officer says a lot during these troubled times. Not everyone would agree with that. Some consider help as “you do everything for me.” Welcome to the real world. Chase plans to help 400,000 homeowners with 170 billion dollars in loans. Yes, that is a “b” in front of that word.

They also offer a web site so you can do everything on-line. It is at chase.com. You then need to go to “keeping-your-home.” The site is easy to navigate and offers forms in the .pdf format. It begins with a 16 items checklist of what you need. It even has Form 4506-T, Request for Transcript of Tax Return, with instructions. That’s Section 1. Section 2 is the three page financial information form. It requires borrower, property, loan and employment information. Also required is your bankruptcy status. Next is your monthly income and expenses, along with a list of your assets. Section 3 is your hardship affidavit. You can fill all this out and send it to their address, they specify it on the form, including if you use private expedited service. They say it takes one or two weeks. Each case is different. Sometimes, complex cases take longer.

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Is the housing market getting better? Are foreclosures going down? Well, it depends on how you want to look at the numbers.

In California, foreclosures were at 31.9% in May, which was down from the 35% rate in April, better but not quite over the hump. In Green Bay, WI, the June foreclosure rate was up 27% from the same period last year, but was slightly down from April. In Phoenix, AZ, the foreclosure rate in May was 30%, which was lower than its high of 51% in February, better than the 40% foreclosure rate in May of 2008, and slightly lower than April once again.

Many would, and have, looked at those numbers and said that the housing market has to be getting better because the numbers are coming down. However, if the rates were so high, don’t the numbers have to come down because, think about it, who’s left to have their houses taken away from them?

Not only that, but the government had a hand in halting the foreclosure rate temporarily while the United States was literally in a financial panic, but those days are gone. Many banks put off foreclosing on a lot of homes because they had signed onto the home-stability plan of the Obama Administration, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments. But that’s ending, and banks are likely to start another round of house grabbing to make up for lost time.

Home sales have started to creep up, but that’s because there are so many foreclosed houses on the market that people can get great deals right now. Even in Manhattan, which has very few actual houses but plenty of condominiums, the price of condos dropped from around $950,000 to around $725,000, which is unheard of for that area. In Florida, people are able to upgrade to homes that used to be worth over a million dollars for around $450,000. And in Detroit, in more depressed areas, some banks are actually encouraging new buyers by allowing them to purchase homes for $100, then giving them loans to fix up those homes, which helps improve their worth and the worth of other homes in those neighborhoods that banks are hoping someone takes.

In some areas, home starts have started looking up a bit, but they’re also being halted as both Freddie Mac and Fannie Mae have hired assessors unfamiliar with many areas to determine the worth of homes, and what they’re coming up with is far lower than the rates that cities and towns have assessed the same property. This has only been since May 1st, after a settlement with New York state Attorney General Andrew Cuomo, and of course they got it wrong. This has prompted two congressman from states where the housing market is distressed to try to put a moratorium on the plan; it needs to be totally scrapped.

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President Barack Obama has introduced many ideas and programs in efforts to provide guidance and aid to the millions of struggling homeowners in this country. The sub prime mortgage crisis, fueled by the greed and often negligence of the lending industry’s major players has left millions of homeowners facing the worrisome prospect of losing their homes. On February 18, 2009, President Obama introduced the nation to his housing plan.

This plan involves several programs which are designed to help over seven million families potentially facing foreclosure to avoid the grief and stress of a foreclosure by giving them options. These options will include either refinancing or modifying their existing mortgages in hopes of ultimately making those mortgages become affordable and bearable once again. Additionally, Obama’s program intends to reinforce and revitalize the federal government’s commitment to Government Sponsored Entities, Fannie Mae and Freddie Mac, leaders in the secondary mortgage market.

On March 4, 2009, President Obama’s administration released news and information that detailed the intricacies of the program and provided guidance on the Making Home Affordable Program.

While there are several characteristics and facets of this program, the main points for homeowners to know are listed below.

1. The Home Affordable Refinance Program. Under this program, eligible borrowers may refinance loans that Fannie Mae or Freddie Mac (the government sponsored enterprises, or GSEs) own or guarantee. The program can help homeowner-occupants who are current in making loan payments and have loan-to-value ratios (LTVs) above 80 percent but not more than 105 percent. Cash out refinancings are not permitted. The program ends in June 2010.

2. The Home Affordable Modification Program. This is a $75 billion program with lender, servicer, investor, and borrower incentives to make it work. The program is limited to homeowner-occupants who are at risk of default or already in default and who have loans at or below the maximum GSE conforming loan limit of $729,750 (or higher for 2-, 3-, and 4-unit properties). Loan modifications under the program may be made until December 31, 2012.

3. More Support for the GSEs. President Obama also announced more support for the GSEs, including doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth. The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.

Ultimately, this program intends to set this country back on the path to growth, profitability and success. Hopefully, with the government’s continued support and diligence on the part of homeowners, we, as a nation, will begin to see the signs of recovery soon.

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Written by: Dania S. Fernandez, Esq., Attorney at Law Of The Law Offices of Fernandez & Associates, P.A.

When facing foreclosure there are many options available to avoid foreclosure and maintain your sanity all together. These options include: Loan Modification/Loan Workout with your lender, Refinance, Obama’s Plan “Making Home Affordable” (go to website http://makinghomeaffordable.com) and Bankruptcy Chapter 13. How can Bankruptcy save my home from foreclosure? When should I file for Bankruptcy? Which Chapter should I file, Chapter 7 or Chapter 13? These are three of the most frequently asked questions in my office. First, in very simple terms here are the definitions of both Chapter 7 and 13:

Chapter 7: liquidation, wipes out most of your debts and in return, you may have to give up some of your property.

Chapter 13: reorganization, enables you to pay off all or a portion of your debts during a three to five year period, yet does not require you to give up any of your assets to pay creditors that you owe. As long as you keep making payments creditors will not bother you for payment or continue the foreclosure against your property.
If you are considering a Chapter 7 Bankruptcy and you are behind in your mortgage, then make certain that you first reach a loan modification/ loan workout or Refinance with your lender and then file Chapter 7. In the Chapter 7 Bankruptcy there will not be a loan modification option of your existing mortgage and therefore if you stop paying your mortgage you could loose you home. Your homestead is exempt, however if you do not pay, it can be foreclosed on. In the Chapter 13 Bankruptcy you can save your house. However, this should be your final option and by that I mean you have tried reaching a modification, you have been represented by a Real Estate Attorney to defend your foreclosure and time is ticking towards the auction date of your house. Bankruptcy is a perfectly legitimate way to stop foreclosures and repossessions, put an end to lawsuits, protect paychecks from garnishments and regain control of your life once again.

The following are gains when filing for Bankruptcy:

Bankruptcy can:
• Halt almost every type of lawsuit.
• Stop Foreclosure.
• Prevent you driver’s license from being yanked for unpaid fines or judgments. (This does not include judgments for child support.)
• Stop IRS Seizures.
• Prevent garnishment of any wages you earn after filing.
• Avert repossession.
Bankruptcy generally won’t prevent:
• Criminal prosecutions.
• Proceedings against someone who cosigned your loan, unless you file a Chapter 13 repayment and propose paying the loan in full.
• Contempt of court hearings.
• Actions to collect child support or alimony.
• Governmental regulatory proceedings

If bankruptcy is an option for you it is important to know what is or will be required of you. Bankruptcy is regulated by Federal law and may be affected by Florida state law. Even though you are not required by law to work with an attorney to file for bankruptcy, it is highly recommended. When filing for bankruptcy, it must be filed correctly in order to have the chance for it be successful.

It is important to consult a bankruptcy attorney or debt relief lawyer in your area in order to ensure that you fully understand your options regarding bankruptcy and whether this is the best decision for your financial future.

The following is a list of facts you should know about filing Bankruptcy:
• Bankruptcy is a matter of public record.
• You can suffer some discrimination.
• You will need to take a credit counseling course and financial management course before you can file for bankruptcy.
• When you initially file for bankruptcy, the court will mail a notice to all the creditors listed in your bankruptcy schedule. Creditors will then be prohibited from contacting you concerning you debt.
• Florida law will exempt certain assets. A lawyer can help determine what is exempt and can help protect particular property.
• In a Chapter 13 bankruptcy, you and your lawyer will need to work out a payment plan wherein you will pay creditors over a period of up to 5 years.
• Your income, bills, assets and property will all need to be evaluated in order to determine what is subject to liquidation, what debts can be discharged, the amount and duration of your payment plan (if any) and much more.
• A stigma may still be attached to filing bankruptcy.
• A record of filing for bankruptcy may remain on your credit profile for up to 10 years, depending upon the particular circumstances.
• While a bankruptcy filing does appear on your credit report, most people fail to realize that the damage has already been done to their credit due to missed payments or late payments. By eliminating your debt in chapter 7, or making payments in a chapter 13, you will immediately improve your credit score.

Written by: Dania S. Fernandez, Esq. Attorney at Law
Of The Law Offices of Fernandez & Associates, P.A.
Located at 6705 SW 57 AVE, Coral Gables, FL 33143
Telephone: 305-254-4492
E-mail: Dania@fap-law.com
Website: www.daniafernandez.com

For more information on Foreclosure, Loan Modifications & Bankruptcy go to www.daniafernandez.com Or, call The Law Offices of Fernandez & Associations and schedule a free consultation with one of our attorneys at 305-254-4492.

A loan modification is an option you may have in order to avoid foreclosure. We have assisted many clients in working out loan modifications with Lenders as well as defending against a foreclosure filed against their properties. Many times our law offices are defending against a client’s foreclosure which simultaneously working out a loan modification with their particular lender. Each of our clients have a unique set of circumstances, financially, physically and emotionally. We treat each case with the upmost priority. We are faced daily with situations that are both emotionally challenging and gratifying.

A loan modification is a permanent change of one or more of the terms of your original mortgage. A short sale or bankruptcy does not have to be the only answer to avoiding foreclosure. If you have had some kind of financial hardship which was the cause of or will result in the failure to make your monthly payments a loan modification may be your option. A loan modification will provide for a lower monthly payment allowing you to maintain financial stability and save your home from foreclosure.

Why Do I need an Attorney?

An attorney can review your current financial situation and discuss all your legal options when forming your decision. A loan modification and a foreclosure defense of your mortgage involves many laws that only an attorney can advise you and defend you on. In addition, I have many cases where the client was served with foreclosure paperwork during the loan modification process. It is highly recommended that an attorney handle the modification process and the defense simultaneously.

Ever since the housing crisis began almost a couple of years ago, homeowners have been looking for genuine solutions to avoid losing their homes. Getting a home loan modification has been one of the best options in order to lower your monthly payment and avoid foreclosure. Because of this, hundreds of thousands of families have been trying to get a loan modification for a long time. However, the number of foreclosures in the country has only been going up and unfortunately there are still millions of families who face the risk of losing their homes to foreclosure.

This situation is mainly because a number of companies have resorted to blatant cheating and scamming homeowners out of their hard earned money. Since loan modification is one of the few really solid options available, homeowners have been rushing to any advertised loan modification company or attorney making unbelievable promises and have been agreeing to exorbitant fees just to apply for a loan modification.

Sadly, these companies who charged the homeowners upfront fees which sometimes are as high as $7000 simply shut shop and run away never to be heard from again. Once the homeowner ends up paying anything upfront, they seldom hear from the loan modification company after that. At the most the company might be in touch for a week or so saying your application is being processed but in reality no application was made in the first place. Since the modification process takes about 90 days or more to work with lenders, most companies get discouraged trying to get something done so they give up. These companies give up because there is no longer a financial incentive to get a modification for their clients since they have already been paid their fee at the outset.

Taking advantage of the unfortunate situation the homeowners find themselves in, various companies or so called consultants, make false promises on being able to save the homes from foreclosure and often end up cheating their customers out of a lot of money. Instead of the number of scams decreasing, it is not only going up but newer scams have been reported by various homeowners who have been victimized by these scammers.

Many times a company will tell you that they would not charge you until your loan modification is approved. What they don’t mention is that the loan modification application is simply approved by their own staff and not the actual bank or mortgage lender. After a week or so of applying, these companies would get back to the homeowners saying the loan modification application was processed and approved by a team of qualified experts. Then they proceed to say the homeowner now needed to pay a fee upwards of $3000 to get the loan modification sanctioned from the bank.

In reality, until and unless your mortgage lender themselves approve the loan modification, no matter how many experts claim your application has been sanctioned, it does not mean your loan will be modified.

It is advisable that a homeowner should contact only those companies who specifically mention that there won’t be any upfront fees until your loan modification is approved by your lender. The keyword here is lender and anything else might be just a way to pull you in before charging a huge amount.

Although homeowners have to be careful of so many scams, they should not feel scared of a loan modification as it still remains one of the best solutions for avoiding foreclosure. All you have to do is make sure you find a company that does not charge any upfront fees until your mortgage loan modification is fully approved by your bank or lender.

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What is a Mortgage Loan Modification? 
A loan modification is when your servicer or lender re-negotiates the terms of your original mortgage loan. There are several ways in which they modify the loan:

• Lowering of interest rate 
• Fixing an adjustable rate to a lower fixed rate 
• Adding missed payments to the end of the loan 
• Extending the term of the loan- 30yr to 40yr term 
• Forgiving missed payments 
• Forgiving 2nd mortgages

Why Banks Modify Mortgage Loans? 
Lenders will modify a mortgage loan when a homeowner is facing a financial hardship and will have difficulty making payments. Many homeowners have no other financing options because they 1) do not have equity in the property, and 2) their credit has been so adversely affected that they are unable to qualify for a typical refinance.

It is to the lenders benefit to modify a delinquent mortgage loan because the foreclosure process is a very lengthy and very costly procedure. Experts estimate that a typical foreclosure cost approximately 40% to 60% of your mortgage loan balance. If the lender can offer a homeowner new affordable terms, they can recover the missed payments over time through interest payments.

Foreclosures are such a serious problem that the US Government has raised nearly a trillion dollars to assist lenders with loan modifications. Tax dollars are now being used to help the banks perform mortgage loan modifications at little or no cost to the homeowner. The banks only receive these funds if they agree to modify mortgage loans for struggling homeowners.

Loan Modification Companies- Beware of Scams 
I would like to take a moment to discuss the Loan Modification companies. You have probably seen the numerous commercials and heard the radio advertisements. In our opinion, the majority of these companies are overcharging for a service that is free, and many are downright fraudulent. They prey on the fears of struggling homeowners. They tell horror stories about apartment living… how your credit will be ruined… how your children will suffer not having a yard, or switching school districts. They will say anything to get your money. These Loan Modification companies hire ex-loan officers and call them “specialists”. These are the same people that misled you into signing the loan that you currently can no longer afford. Do not allow them to make a second commission on you!

Beware of the “Money Back Guarantee” 
They will further entice you with a “money back guarantee”. This guarantee is worthless. Many companies refund policies do not include a ‘processing fee’ that can be as high as $1000.

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