PropertyManagementMaven: February 2010

The Mortgage E-Verify Act, introduced would require that the identity of all applicants for new or modified mortgages held by Fannie Mae or Freddie Mac or insured by the FHA, be confirmed through the E-Verify program of the Department of Homeland Security. 

U.S. Congressman Rep. Kenny Marchant from Texas has just introduced a bill intended to prevent mortgage fraud by illegal aliens.

"My bill will potentially save millions by cutting down on fraudulent claims from illegal immigrants and protect taxpayers from subsidizing the restructuring or renegotiation mortgages of illegal immigrants," said Rep. Marchant in a press release.

Marchant cites Treasury Department data showing that incidents of mortgage fraud increased an estimated 1,411 percent from 1997 to 2005. "Furthermore, two-thirds of fraud reports in the last decade are due to falsified statements on loan documents," he noted. "My bill would curb these abuses and protect the taxpayers."

There was a major case in Nevada where a mortgage company branch manager conspired to manufacture and submit false employment and income documentation for borrowers, most of whom were illegal immigrants. Fifty-eight of the 233 fraudulent FHA loans totaling $6.2 million have, not surprisingly, gone into default, costing HUD nearly $2 million. The branch manager was found guilty on 32 counts of submitting false information to HUD, and one count of conspiracy. -- U.S. Rep. Kenny Marchant press release.

I am pleased that Rep. Marchant has taken this step as mortgage loans must be scrutinized one at a time, because the industry is based on people and relationships. It all starts with a homeowner or homebuyer working with a loan officer and or a real estate agent. Within these working relationships, trust is established, most for good, but some with the intent of defrauding the client. The solutions to the mortgage fraud epidemic can and will come from observing loan production at origination level and this bill "Mortgage E-Verify Act" will assist in the "Clear To Close" Process.

In short, The solution to the mortgage fraud crisis is to re-tool and improve the pre-funding process of loans, including a better education of the individuals involved with the origination of each individual transaction. This does not have to be a major re-tooling - more like a tweaking of the internal processes for the origination of mortgages. We need an "is it really clear to close" attitude. The majority of the tools needed to prevent mortgage fraud already exist, they just need more oxygen, so to speak; and access to better education must be available in the industry, as to how to utilize these tools correctly.

We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.

It starts with me.

It starts with you.

It starts with us...

Michael S. Richardson

Director/Mortgage Fraud Services
Author of "An American Epidemic, Mortgage Fraud a Serious Business"

www.mortgagefraudsolutions.com

 

Wellington Florida Real Estate News- Wellington Votes No To Proposal to charge a registration fee for single-family home rentals.

Tuesday night, the Village of Wellington Council unanimously voted no to the suggested proposal. No one from the public was there to comment but some people did send in comment cards. Also, the Realtor Association Of The Palm Beaches was opposed to this proposed regulation as it would put an undue burden on homeowners.

There is a fee that is charged to landlords who own multi-family units. The Village staff are the ones that proposed this new registration.

Even with the fees collected the Village of Wellington would still have to spend another $87,000 a year in administrative fees so in a time when the village is looking to save money this was really not another expense to take on. The mayor of Wellington, Darell Bowen said that it makes more sense to take care of the isolated cases where the renters are not taking care of the property. He also said that most homeowners who end up renting out their single family home are not investor landlords who own multiple homes.

There are about 3,700 non-homesteaded single family homes in Wellington Village. The proposed registration fee would have applied to about 1,400 of those homes.

We as active Realtors® in our Wellington community are glad this did not pass. We are interested in the property owners having private property rights. Our local Realtor® board is very active in community and local politics that affect home ownership, property rights and other real estate related issues. 

 

 

   

 

 

To  view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.

 

   

 

 

        

 

Copyright © 2010 By Katerina Gasset, All Rights Reserved.*Wellington Florida Real Estate News- Wellington Village Votes No!* 

 

 

Distressed Property owners - You are not alone!  Before you walk away, educate yourself.  They are many options available to distressed property owners at present.

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Wilmington-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

• Benefit: Does not require the mortgage company or lender's approval.
• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

• Benefit: Allows the homeowner to make back payments over time.
• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
• Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

• Benefit: Allows homeowner to keep property indefinitely.
• Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

• Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
• Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

• Benefit: Does not require lender approval.
• Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall-not stop-the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

• Benefit: In some cases, this will lower payments.
• Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
• Drawback: Must be active military to qualify.

Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.

http://www.edhomeseller.com

www.wilmingtonnc-shortsales.com

 

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