Wednesday, November 19, 2008

Paulson: Bait and Switch

By: Chris Taylor, Foreclosure Specialist

Once again your government who lobbied for you to support the bailout has lied again.

Secretary Paulson, whose net worth has almost doubled to 750 million is siding with the other industry leaders (Bank CEO's, lobbyist, etc) and has clearly stated that if you are in trouble with your lender, FEND FOR YOUR SELF!

The current system, which rewards the failing banking system by paying huge bonus's at the tax payer's expense is turning their back on the consumer. Currently,banks are pursuing foreclosure activity and opting to discontinue to loan modification programs because they believe the re-default rate is too high and that loan modifications don’t work.

Paulson has stated over the last two weeks that the treasury has decided to abandon the acquisition of troubled assets in exchange for buying bank stock. Paulson believes that if the government buys bank stock that it will shore up the bank’s balance sheet, thus unlocking the credit markets. The banks will be better stewards of T.A.R.P. (Troubled Asset Relief Program aka: Bank Welfare program) than the homeowner in foreclosure.

Banks are actually tightening credit standards , and freezing current credit lines.. They are taking a conservative approach to the management and extension of credit because they believe credit performance will continue to decline

Imploding Economy

It doesn't take a Harvard educated economist specializing in the Great Depression to understand that if spending continues to decline, unemployment will increase. If unemployment increases loan losses will also increase. A bank will not continue to lend in this kind of economic environment when they know that the default rate is increasing. This is why we are seeing banks increase their rates on credit card portfolios. This trend will continue thus adding to the trend of limiting access to affordable credit in the market.

Let’s review the most recent events to support this claim:

* Citibank increased rates on their credit card portfolios by 3%. (they are also cutting 53,000 jobs)
* Circuit City to close 20% of all stores causing thousands to be let go
* Lowes Stores report 25% reduction in sales
* Intel reports unexpected decline in sales and cannot predict the future of microchip sales and 3,000 job cuts
*Dupont, 30% decline in sales
*State budgets are all being reduced and taxes are being raised

These results demonstrate the power of the American consumer and if we don’t support from the ground up the problems will continue.

Loan Modifications, and special loan programs insured by the Federal Government need to be implemented immediately. These programs should be available to all current homeowners current and delinquent. These changes will begin the flow of money into the economy that will stop the hemaraging and begin the healing of the economy.

Please let your local congressman know your concerns about why the government is taking the wrong direction.

In our economy will continue to fall for the 10% of homeowners in distress. This lack of spending is causing major job reductions around the world. Imagine if this number increases to 15% -20%? Where will unemployment be then Mr. Paulson? We will be happy to know that the banks will be well capitalized, hoarding their money and not putting it to use.

For the rest of us little people we can only hope that the incoming administration and congress will actually work for the people.

Tuesday, November 18, 2008

Friday, November 14, 2008

FDIC plan expands efforts on foreclosures

(November 13th, 2008 - The Denver Post)

WASHINGTON — Officials at the Federal Deposit Insurance Corp. on Thursday detailed a plan to prevent 1.5 million foreclosures in the next year by offering financial incentives to companies that agree to sharply reduce monthly payments on mortgage loans.

The proposal, which has the support of leading congressional Democrats, would considerably expand the scope and force of efforts to stem foreclosures. Agency officials estimated the cost to the government at $22.4 billion.

FDIC Chairman Sheila Bair continues to face opposition within the Bush administration. Treasury Secretary Henry Paulson said Wednesday that he opposed funding the plan from the government's $700 billion rescue fund. But proponents increasingly view the Bush administration as a roadblock with an expiration date.

The FDIC proposal, which is to be announced today, goes further toward helping borrowers than existing modification efforts. And, the initiative is designed to be less expensive for mortgage companies because the government will pick up part of the tab. The Washington Post

Back to Avoiding Foreclosure Tips

Thursday, November 13, 2008

California Foreclosure Laws

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically 120 days

- Right of Redemption: Varies

- Deficiency Judgments Allowed: Varies

In California, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process for California foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Using this type of foreclosure process, lenders may seek a deficiency judgment and under certain circumstances, the borrower may have up to one (1) year to redeem the property.

Non-Judicial Foreclosure


The non-judicial process for California foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A notice of sale must be:
1) recorded in the county where the property is located at least fourteen (14) days prior to the sale;
2) mailed by certified, return receipt requested, to the borrower at least twenty (20) days before the sale;
3) posted on the property itself at least twenty (20) days before the sale; and
4) posted in one (1) public place in the county where the property is to be sold.

The notice of sale must contain the time and location of the California foreclosure sale, as well as the property address, the trustee's name, address and phone number and a statement that the property will be sold at auction.

The borrower has up until five days before the foreclosure sale to cure the default and stop the process.

The sale may be held on any business day between the hours of 9:00 am and 5:00 pm and must take place at the location specified in the notice of sale. The trustee may require proof of the bidders ability to pay their full bid amount. Anyone may bid at the sale, which must be made at public auction to the highest bidder. If necessary, the sale may be postponed by announcement at the time and location of the original foreclosure sale.

Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale and the borrower has no rights of redemption.

Nevada Foreclosure Laws

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically 120 days

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes

In Nevada, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process for Nevada foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

The borrower has one year (12 months) after the foreclosure sale to redeem the property if the judicial foreclosure process is used.

Non-Judicial Foreclosure

Information taken from: www.foreclosurelaw.org

The non-judicial process for Nevada foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower, at their last known address, on the date the notice is recorded in the county where the property is located. Any additional postings and advertisements must be done in the same manner as for an execution sale in Nevada.

Beginning on the day after the notice of default and election was recorded with the county and mailed to the borrower, the borrower has anywhere from fifteen (15) to thirty five (35) days to cure the default by paying the delinquent amount on the loan. The actual amount of time given is dependent on the date of the original deed of trust.

The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day before the foreclosure sale is scheduled.

The foreclosure sale itself will be held at the place, the time and on the date stated in the notice of default and election and must be conducted in the same manner as for an execution sale of real property.

Lenders have three (3) months after the sale to try and obtain a deficiency judgment. Borrowers have no rights of redemption.

Thursday, November 6, 2008

Florida Foreclosure Laws

Information taken from: www.foreclosurelaw.org

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: No

- Primary Security Instruments: Mortgage

- Timeline: Typically 180 days

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes

In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury. The court order of foreclosure will specify how the foreclosure must take place, and the Florida foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.

Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702)The lender may sue to obtain a deficiency judgment in Florida.

Ariozona Foreclosure Laws

- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 90 Days
- Right of Redemption: none
- - Deficiency Judgments Allowed: Varies

In Arizona, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure in Arizona, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure in Arizona is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

The trustee must record a notice of sale in the office of the recorder of the county where the property is located. Within five (5) days after the notice is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed, except for himself. Additionally, the notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale.

Optionally, if it can be done without a breach of the peace, the trustee can post the notice at least twenty (20) days prior to the date of the sale, in some conspicuous place on the property to be sold and/or he or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.

The trustee or the trustee’s agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a "credit bid," which means to cancel out some part (or all) of the money the borrower owed the lender on the lean, instead of paying cash. A successful high bidder must pay the bid price by 5 pm of the day after the bid, other than a Saturday or legal holiday. Every bid is an irrevocable offer until the sale is completed, which happens when the bidder pays the bid price to the trustee’s satisfaction. If the high bidder fails to make the payment by 5:00 pm, the day after being notified of the option to buy, then the trustee may postpone the sale.

The trustee may postpone the sale to another time, or another place, by giving notice of the new date, time and place by public declaration at the last place and time the property was offered for sale. No other notice is required. A trustee may also, by written agreement, extend the time for a buyer to come up with the payment.

Once the sale is complete, the proceeds will go to the payment of the obligations secured by the deed of trust that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustee’s deed, which provides conclusive evidence that the trustee conducted the foreclosure sale property.

A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure.

Sunday, November 2, 2008

Colorado Foreclosure Law Summary

Information gathered from: http://www.foreclosurelaw.org/

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically four months

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes
(In Colorado, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. )

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

The Colorado foreclosure process is quite a bit different than in other states because here, the governor appoints a "Public Trustee" for each county in the state. The trustee must act as an impartial party when handling a power of sale foreclosure. In Colorado, the non-judicial power of sale foreclosure is carried out as follows:

The process begins when the attorney representing the lender files the required documents with the Office of the Public Trustee of the county where the property is located. The Public Trustee then files a "Notice of Election and Demand" with the county clerk and recorder of the county. Once recorded, the notice must be published in a newspaper of general circulation within the county where the property is located for a period of five (5) consecutive weeks.

The Public Trustee must also mail, within ten (10) days after the publication of the notice of election and demand for sale, a copy of the same and a notice of sale as published in the newspaper, to the borrower and any owner or claimant of record, at the address given in the recorded instrument. The Public Trustee must also mail, at lease twenty-one (21) days before the foreclosure sale, a notice to the borrower describing how to redeem the property.

The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day
before the foreclosure sale is scheduled.

The foreclosure sale must take place between forty-five (45) and sixty (60) days after the recording of the election and demand for sale with the county clerk and recorder. The Public Trustee may hold the sale at any entrance to the courthouse, unless other provisions were made in the deed of trust.

The lender has the option to file a suit for deficiency in Colorado and the borrower has up to seventy five (75) days after the sale to redeem the property by paying the foreclosure sale amount, plus interest.