Mortgage Foreclosure Report http://www.mortgageforeclosurereport.com "Resources For Protecting The American Dream" Sat, 19 Mar 2011 03:07:26 +0000 en hourly 1 http://wordpress.org/?v=3.1 Red Cross Donation http://www.mortgageforeclosurereport.com/red-cross-donation/ http://www.mortgageforeclosurereport.com/red-cross-donation/#comments Sat, 19 Mar 2011 03:07:26 +0000 wadler http://www.mortgageforeclosurereport.com/?p=1616 We are not a sponsor for Red Cross and we are not personally collecting any money to help raise money for Disaster Relief Funds for Japan.  However, we are hoping by putting a banner at the top of the page it will help direct your to a place that can help victims of the Earthquake and Tsunami in Japan.  If you do not donate to the Red Cross please donate to any charity for any amount of money. Anything really does help.

We realize it is hard times for everyone, however, when a disaster such as this happens in the World it makes you realize that everything can change in the blink of an eye.  Whether it is from good to bad or from bad to good.  The people of Japan lost their Mothers, Fathers, Children, Brothers, Sisters, Cousins, Friends, School Mates, Co-Workers in a matter of moments.  Yes, in America we are having tuff times but at least we still have the ability to laugh with our friends, hug our parents, kids, wives, and siblings.

Our happiness and current situation is all relative to where we are in the world.  We can shut our TVs and not read the papers and pretend that nothing is happen or we can follow every waking moment.  Neither which we think are great ideas.  We think us as a nation should be conscience of what is going on and try and help in some small way.  We know even after a major disaster the sun is going to rise and we as a race of human beings will continue with our daily lives.

To conclude, most of us have suffered from losing a loved one, a job, a house; but to lose it all at once can be paralyzing.  We may not have the ability to to solve the Japan crisis, but at least we can try and alleviate some of the pain for these poor poor people.

 

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Land of the Free http://www.mortgageforeclosurereport.com/land-of-the-free/ http://www.mortgageforeclosurereport.com/land-of-the-free/#comments Tue, 31 Aug 2010 01:59:52 +0000 wadler http://www.mortgageforeclosurereport.com/?p=1543 Strength

Strength

Everyone is concerned if we have hit the bottom of the housing market. They have become so obsessed with their home value and the marketplace they have lost sight of what is best for them, their family, and the country.

Since the real estate market crashed we have experienced an increase of sales in the residential real estate industry in the past couple years. However, as you may already know this increase was artificially inflated due to the government incentivizing consumers with an $8,000 housing credit. Nonetheless, the majority of what a consumer read in newspapers, watched on TV, and heard from Wall Street speculators was we have hit the bottom and are headed towards a recovery.

It would be unfair to say all newspapers, television stations, and speculators were saying this was true, but the majorities were trying to be positive about the country’s economic situation.
Whether you agree or disagree if the country is/was recovering; the country’s stock and real estate market were improving. On the surface it appeared the housing tax credit did stimulate home sales. That was until earlier this month. In early August the National Association of Realtors stated homes sales for July declined by 27%. This is the largest decrease in over 15 years.

While it seems that is a large decline some analysts believe the 27% is a skewed percentage. Their belief is if the housing credit never existed home sales would have just kept declining slowly over a period of time at a steady rate, thus the large decline would have never happened.

At Mortgage Foreclosure Report we believe the following:
1. The housing tax credit did stimulate the housing market
2. A massive decline was bound to occur after the housing credit expired
3. The 27% is inflated. We agree with the analysts from the note above.

What does all of this mean? To us it does not mean much except the country is in a state of flux and that our markets are driven by what people hear and believe. When we review our countries history and decipher when we were the most successful we decided it was when we produced goods the rest of the world needed. However, over the past several decades we have become a country of consumers and minimal producers. Our belief is the country has become about big business. From our point of view there is nothing wrong with that except these companies are under pressure to turn a profit and have to make their stock values high. Additionally, in our eyes what made this country strong, besides producing goods, was when the small entrepreneur set out to start his/her company. Nevertheless, big corporations have been structured to hit certain profits every quarter and are incentivized through bonuses. Therefore, their main objective is to what is best for the company. Thus, to be a big corporation and to be competitive in the US outsourcing has become an integral part of doing business. Outsourcing, while understandable and smart for a corporation, leads less production in the country which then leads to fewer jobs which then leads to a slowly declining economy. Please do not misunderstand what we are saying in this article. We are for capitalism and free markets, however, at some point as a nation we have to look at what our major companies are doing inside the US and ask how we can fix the declining economy. Yes, it is not a simple answer and yes the markets are more global then they have ever been. But at what point do we say stop. Currently our country is suffering and everyone’s money is tied up in a market place in companies and portfolios we do not understand. So everyone (we do to at MFR) diversifies. So at what point do we say stop. Stop the outsourcing, stop the greed, and stop the investments in derivates and other financial models almost no one understands. When do we stop? Our country is looking for an answer to solve the crisis at hand and the only thing our great nation can come up with is to spend. Spend our way out of it. I say we have to be innovative and produce. I do not know what to produce but produce. Then we can find a healthy balance between production and consumption.

Sorry for the rant, let us digress. We have become a nation of consumers so we are trying to develop methods of how to get out of this recession, double dip recession, depression, or whatever you want to name it. The way consumers get out of recession is to consume. The method results in us having to spend money, however, if you are unemployed or just spending money on necessities then consumption almost becomes nil..

What does this mean to you? In our opinion many people have become tight with their money because they are frightened. This is natural; however, holding onto your money does not help the country either. Spending helps your local marketplace. We believe for the individual/consumer they have to look at their situation and decide on what are smart purchases for you and your family. If you have lost your job then buying a 60 inch plasma television is probably not a smart decision. It probably makes more sense to buy groceries or pay the electrical bill. However, if you are comfortable in your state of life then maybe buying the television is the smart decision.

Therefore, paying attention to speculators, news reporters, and other media outlets is not a reliable way to make your life decisions. Listen to whether the market is up or down or whether the housing industry is up or down does not affect your current situation. It may affect your long-term investments and it may have had an impact on your retirement. However, unless you are willing to stand on the pulpit and preach you have to make smart decisions for you and your family.

Back to the original point of this blog post, how does the decline in the month of July affect a current homeowner struggling to pay their mortgage? It may affect their home value, it may decrease their property taxes, and it may cause markets to decline. However, it does not help the homeowner struggling to pay their mortgage on a month-to-month basis. Do not pay attention to the news all the time. It is good to know where the country stand as a whole, but the banks and government aren’t able to help millions of people out there who have lost their job or are losing their home. You have to look out for your best interest. Sometimes it means lawyering up and foreclosing on your home (i.e. deed in lieu of foreclosure) and sometimes it means getting advice for people who want to help you. Lawyers have a firm understanding what is going on in this market. While yes they are taking advantage of the current times and are prospering off of it. It is in their best interest to help you.

To sum up this crazy article, do what is best for you. Do not listen to all the junk out there because it can consume you. Do not be afraid to ask for help from professionals. You are not alone many people are feeling the heat of the recession. Things will not change till we all stand as one and force change. However, until that opportunity is upon us you have to do what is best for you and your family. Remember you can start change tomorrow. Each one of us has to change ourselves before we can expect others to change around us and there are always opportunities to prosper even in hard times. Just keep working hard and stay the course that best fits you.

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Overdraft Fees and Bank of America http://www.mortgageforeclosurereport.com/overdraft-fees-and-bank-of-america/ http://www.mortgageforeclosurereport.com/overdraft-fees-and-bank-of-america/#comments Wed, 21 Oct 2009 20:36:13 +0000 wadler http://www.mortgageforeclosurereport.com/?p=1097

A class action lawsuit was filed against Bank of America (BoA herein) in the state of California. The case is Closson v. Bank of America and was held in the Superior Court of the State of California in the County of San Francisco.  Our understanding was Closson filed a class action lawsuit based upon unethical business practices by BoA and their associated banks. BoA and their associated banks are going to pay out an estimated $35 million in settlement fees for the accusations of their unethical business practices.

The reader may be asking what BoA did in order to pay $35 million dollars back to their customers. In the midst of this recession BoA and associates were looking for various avenues to increase their annual revenues. BoA succumbed to the pressure of having to show increased earnings by taking advantage of their customers. They designed their overdraft fees associated with an individuals’ account to work in their benefit instead of their customers.

Example: Johnny always pays his bills at the end of the month.  He is paid monthly by electronic transfer at the first of each month.  Johnny assumed he had enough funds to cover his bills at the end of the month and forgot he had only $1,000.00 in the bank due to spending extra money on his vacation last month. Johnny’s bills were as follows: $1,003 mortgage, $200 HOA, $350 cable bill, and $450 water/electric bill. The total for Johnny’s expenses for the month were $2,003. Due to Johnny not checking his bank account he did not realize he was short on available cash.  He paid all four bills at once via check on the same day.

In our example Johnny should have been assessed one fee for insufficient funds, returned check, bounced check, etc. Instead the bank assessed Johnny’s account with four cases of overdraft fees. When BoA released funds to pay for his various bills they paid them in order from greatest-to-least. Therefore, his payments were withdrawn in the following order: $1003, $450, $350, $200.  Thus, BoA caused his account to be overdrawn. However, if the bank ordered his withdrawals from least-to-greatest he would of only had one incident of overdrawn funds instead of four.

BoA took advantage of many of their customers by instituting these business tactics. Therefore, the BoA and associates are paying out $35 million in lieu of settlement for these accusations brought forth in Closson v. Bank of America.

Many customers may be eligible to receive $75.00 dollars or more. From our understanding all submissions had to be done by May 1, 2009. However, the nation reported on this matter in late September 2009 and we just read about it locally in October 2009. We are performing more research on why we are just hearing about it now and why the mass media reported on it five months after the due date of the submissions. Please see a local news channel in North Carolina report on the issue.

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Does It Really Belong To You? http://www.mortgageforeclosurereport.com/does-it-really-belong-to-you/ http://www.mortgageforeclosurereport.com/does-it-really-belong-to-you/#comments Sat, 03 Oct 2009 21:53:50 +0000 wadler http://www.mortgageforeclosurereport.com/?p=1054 The majority of American’s who are in danger of foreclosure or are in currently in foreclosure are incredibly upset with banks. Much of this website is based upon offering our thoughts and understanding of what is going on in the real estate marketplace and helping to give ideas on how to resolve the American’s problem.

Many webpages are dedicated to debating who is at fault for the real estate crash; whether it was banks or Americans. The conclusion of who is to blame is for the reader to decide. However, as Americans we need to move on into the future and correct our and the banks mistakes. No matter how bitter a consumer may be at the banks they need to try to move on with their lives, though this is easier said than done. Many Americans are so disgruntled with banks because they did not show compassion for deceiving the consumer, lying to the homeowner, or the extenuating circumstance the borrower may be in that some homeowners are retaliating against the banks.

Remember banks are a business and they are looking to survive in this economy. Most businesses will show no compassion if it is between their survival or your survival. This is why when a homeowner defaults on their mortgage the banks are foreclosing on their homes. The majority of banks have heard the same hardship story so many times that if your situation does not fall within a legal obligation to them they will put you at the end of the line for help. The banks do not even hesitate to foreclose on homes. This is why it is so important to obtain legal counsel; however, some individuals have taken matters into their own hands.

Some consumers have retaliated by stripping their home of all its accessories and selling them in hopes of recuperating some of their financial loss. While this may feel good for the consumer in the moment it is a federal offense. When the bank forecloses on your home they own the home and everything on the homes property that is attached. Therefore, what these ex-homeowners are doing is a felony. Stripping homes has become so prevalent in Arizona, California, Nevada, and Florida the FBI has created a division just to deal with the matter. The FBI tracks their targets down by pawn shops, Craig’s List, Ebay, etc. Additionally, stripping became so common that it has made national news. Below we show a piece done by NBC where it can be found at www.NBC.com from the Today show. The story was a collaboration by News Anchor Matt Lauer and Report Miguel Almaguer.

Remember even if you are going to lose your home, credit, and current living status it is nothing compared to being thrown in a federal prison and compromising your moral standards. This is why American’s need to rally and fight the good fight in the court system. Find a way to make every crooked banker pay for their mistakes while maintain your own integrity.

Matt Lauer: We are back at 7:47 AM and this morning on Today’s Money Pits it is a growing crime involving the struggling real estate market. Brazen thieves who are stealing anything of value from a foreclosed property and oftentimes the suspects actually lived in the very homes their targeting. Here’s NBC’s Miguel Almaguer.

Real Estate Agent: We have 3,474 sq. ft…

Miguel: For homebuyers like the Parishes…

Real Estate Agent: They took everything…

Miguel: …buying a property asis can mean going without.

Real Estate Agent: Here we have the sliding doors missing that need to be replaced.

Miguel: Nearly every foreclosure they see requires vision.

Real Estate Agent: And this would be your kitchen island.

Miguel: What makes a house a home unceremoniously ripped out. The properties are just a shell of what they used to be; it is called foreclosure stripping. A problem so rampid in Arizona the FBI is now involved.

FBI Representative: What we are seeing homeowners as they are facing foreclosure doing this umm and the motivation is to recover whatever sort of investment they might have made in the property.

Miguel: With foreclosures up 600% in Phoenix since 2005 stripping has shot through the roof.

FBI Representative: …they tell us that their upset because of…..

Miguel: The FBI says that this property was flooded by the former owner. Many of these crimes are carried out by angry families forced to leave their homes.

FBI Representative: What are you finding on Craig’s List…

Miguel: Federal agents routinely scour the web for fixture sales.

FBI Representative: This is our target…

Miguel: Then arrests former homeowners tried to flip appliances and fixtures that were once theirs and are now bank owned property.

FBI Representative: These are the first of these types of cases that we worked. It is across the board we have seen it from high-end multimillion dollar homes, to the low-end homes, to condos, to townhouses. It runs the gamut.

Miguel: What was also surprising is what’s stolen. Anything bolted down has been ripped away not just appliances and fixtures but door hinges, light switches, and even the rug underneath the suspect’s feet.

FBI Representative: It was bought in 2006 for $280,000 but now because of the damage this house is selling for $69,000.

Miguel: Experts say the big losers here are neighbors. When a foreclosed home was stripped property values for an entire neighborhood can plumb it. Phoenix is a hotbed for stripping and it’s not just a problem in Arizona; California, Nevada, and Florida have all been hit hard.

Potential Buyer: …very nice…

Real Estate Agent: As you know…

Miguel: But the lost can be someone else’s gain.

Potential Buyer: I guess we can put our own stuff in here right.

Miguel: Homebuyers looking for a deal; as federal agents try to track down the steel. Former property owners who take everything; including the kitchen. For Today, Miguel Alvarere, Phoenix.

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A Comprehensive Overview of Your Credit http://www.mortgageforeclosurereport.com/a-comprehensive-overview-of-your-credit/ http://www.mortgageforeclosurereport.com/a-comprehensive-overview-of-your-credit/#comments Wed, 09 Sep 2009 01:14:11 +0000 wadler http://www.mortgageforeclosurereport.com/?p=925 An individual’s credit is one of the most complicated numbers to determine.  The Fair Issac Corporation keeps how they truly determine an individuals credit score very secretive.  They give an outline on how your score is determined, but they do not give the common man any specifics.  Since Americans do not have a deep insight  on how our credit is determined we may not pay close attention to our credit score.  We used to view our credit on a good or bad scale.  Approximately, three years ago if an individual had “good” credit they could obtain a mortgage, car loan, business loan, and credit cards.  If they had “bad” credit then they could obtain some help from lenders at an increased interest rate.  Nevertheless, as population we knew even with a bad credit score we would we would receive some sort of loan. 

In today’s economic environment what was considered good credit and what was considered bad credit has significantly changed from three years ago.  In the past a person with  a mid-600 credit score could have been classified as having “good” credit and a person with a score below the mid-600s could have been classified as having bad credit.  In the early to mid 2000s lenders were practically giving away money to individuals who should not have qualified for a loan.  These companies were acting fiscally irresponsible.  In 2007 when America had the decline in the real estate market, stock market, and overall economy took a serious decline the lenders did a 180 on lending practices and went to the other-side of the spectrum.  The lenders have now stopped extending credit to a majority of Americans.  It has become increasingly difficult to obtain a loan and it seems that an individual can only obtain a loan at a decent rate if they have an impeccable credit history and a current credit score in the mid to high 700s.  The lenders have gone from essentially approving most individuals to reviewing each applicant in detail.  If there appears to be any reason the lender can decrease the available balance on a person’s credit cards or deny them a loan they will capitalize on the opportunity. 

Today millions upon millions of Americans are endanger of losing their home, car, boat, life savings, child’s tuition, etc. and therefore may be unable to repay their debts to their lenders.  As a result, many of the lenders are not extending loans because they are affraid many of their customers are going to default on their loans.  Due to a combined efforts of frivolous spending by Americans and the irresponsibility of the lenders, obtaining a loan has become virtually impossible for the common American.  Therefore, America is in a catch 22.  A person is unable to receive a loan because they have bad credit, however, they cannot show they are deserving of higher credit because of their inability to obtain a loan. 

Finally, due to our current economy many lenders started to adopt new types of  methods to determine a person’s credit score.  The lenders have also started to utilize different analysis techniques to determine if a customer is a suitable candidate to lend money.  Below we have placed a great video which discusses the different types of credit scores and analyses techniques being used in today’s financial arena.

Reporter:  Thanks to the economic meltdown improving your credit score has become the latest rage these days.  Did you know that credit scores are getting even more complicated?  Lenders are now starting to look at new specialty scores to make decisions that could affect your financial future. So here to help us stay on top of the numbers here with us is Lynnette Khalfani-Cox founder of themoneycoach.net and the author of Zero Debt. Lynnette welcome to Good Money.

Lynnette:  Thank you.

Reporter:  So before we get into some of to some of the changes that are abreast could you just give us a little recap of what goes into calculating our credit scores?

Lynnette: Sure, first and foremost there is an actual formula that Fair Isaac the company that develops your credit score has told us that impact your credit rating. First and foremost your payment track record 35% percent of your credit score is based on how well you pay your bills. The key first and foremost is to always pay everything you owe month after month. The second biggest component is something called your credit utilization rate.  In essence its how much credit card debt that you are carrying the credit scoring model likes to see you caring as little debt on those credit cards as possible.  That is 30% a credit score. 15% of your credit score based on the length of your credit history. The longer you have had established traditional forms of credit like a student loan, a mortgage, a car loan, a credit card, etc. the better that is for you.  That boosts your credit score.  10% of your credit score is based on the mix of credit in your files.  Again having credit cards, mortgages, student loans if you can show that you can juggle all those forms all those credit responsibly and pay them on time you will actually get brownie points for doing so.  That’s 10% of your score. And the final 10% is based on inquiries or new applications for credit that you are out there seeking.  In general you do not want to be out there applying for a lot of new credit.  An inquiry stays on your credit report for two years and counts against you for 12 months.

Reporter:  All right but now there is some companies that are going to start competing with FICO. Isn’t that right?  So does that mean we will have different credit scores depending on the company?

Lynnette:  Well yes, uuuh, in a nutshell there are new credit scores that are emerging and that are coming on the scene to rival the FICO credit score. One of them is called the Vantage score and it and this is a score that was developed by the big three credit bureaus (TransUnion, Equifax, and Experian).  It actually launched a couple years ago but frankly almost no lenders looked at.  But now the Vantage score has about a 6% adoption rate. Meaning 6% of banks, credit card issuers, and lenders actually look at and use that score. FICO by and large is still the dominant player in this industry. They have a 75% market share so you definitely need to be most concerned about that score.

Reporter:  About FICO.

Lynnette:  But these new players are coming and different types of credit scores are also starting to be analyzed.

Reporter:  Now are you just in the dark of which credit companies your lender is looking to figure out your credit score.

Lynnette:  You can assume that most lenders are looking at the FICO credit score. But what consumers also need to know about are these other what I call secret credit score that most people frankly have never heard of. For example there is something called the industry options score. Which means that specific industries weigh your purchases or spending patterns and behavior in their industry more heavily than they do with others. So let us say you are going for an auto loan. An auto dealer or finance company might care more about how you have paid your car loans in the past then other things. They’re going to look at whether you have been late, whether you have had car repossessions, etc. That kind of thing.

Reporter:  What about an Application Score; what is that?

Lynnette:  An application score tells a company the likelihood you’ll actually apply for an offer that they make. If you’ve got one of those pop-up adds on your computer or you have gotten a credit card in the mail they are saying hmmm is this person likely to apply or respond to a credit card offer we make.

Reporter:  And what about a Retention Risk Score that is another one of these little secret scores right.

Lynnette: Sure, a Retention Risk Score that essentially tells a credit card company, a bank, or a lender how likely are they going to keep you as a customer. Are you likely to just take that low balance transfer off for that initial deal and you know kiss them goodbye later when a better deal comes along or when a competitor sort of woos you. They want to know how loyal is this person going to be.  That is indicated in retention risk score.

Reporter:  I am assuming the Collections Score means how well you pay your bills or…?

Lynnette:  No, actually the collection score will give a lender or a bank an indication how likely you are as a customer to have your account go into collections.

Reporter:  Aaaaahhhh, ok.

Lynnette:  Some of it is modeled even more finally to tell them if you do go into collections are you likely to pay up. You know and of course those numbers get smaller and smaller.  If you have been in collections the chances are you’re having financial problems or the likelihood of you repaying a debt is increasingly smaller.

Reporter:  What about the Payment Projections Score and the Revenue Score? Tell us about these two.

Lynnette:  Sure, those scores in essence….. the Revenue Score is going to tell a bank how profitable a customer is this person going to be for us. Do they charge a lot other credit cards?  Do they go out and pay them off immediately and so hmmmmm we don’t get a lot of interest out of this person?

Reporter:  That is unbelievable because that is sort of a responsible person.

Lynnette: That is what you should be doing absolutely.

Reporter: Yeah yeah.

Lynnette:  They do want to track and see how big of a revenue generator you are going to be for the company. So all these things matter tremendously….

Reporter:  So they want to be responsible but not too responsible.

Lynnette:  Well you know the banks are in business to make money right? And they make money by extending loans and they provide is loans at a certain stated interest rate and that’s their profit.  So at the end of the day yes they want you to pay back but I’m sure they would not mind if you take a little bit of time in doing so.

Reporter:  Lynnette Khalfani-Cox, thank you so much.  And you can get more for of Lynnette’s tips at themoneycoach.net.

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America On A Diet http://www.mortgageforeclosurereport.com/america-on-a-diet/ http://www.mortgageforeclosurereport.com/america-on-a-diet/#comments Mon, 31 Aug 2009 08:38:09 +0000 wadler http://www.mortgageforeclosurereport.com/?p=880 Debt DietThe average American household’s debt is between $10,000 to $20,000. Please note that this does not account for their home mortgage. A continuing theme throughout the website is that we as Americans relied too much on debt and lived far beyond our means which was a major contributing factor to our country’s significant decline in standard of living. While it is easy to point a figure and blame big business for the recent demise of our country some of the burden remains with us as citizens of the United States. We were not acting responsibly and did not even take a minute to think if we should purchase that $350K house, that new BMW, or that Jacuzzi spa that would fit great in our backyard. Therefore, while fat greedy business rightfully bear the majority of the blame for our country’s current state as responsible citizens we need to step up to the plate and try to rectify our mistakes as irresponsible consumers. Below we have placed a video from Clark Howard stating that we the consumer have reduced our personal debt over the past five months. Therefore, as a country we have spoken through actions that we will make a strong attempt to rectify our mistake of reckless spending. So now the questions beckons will the big corporations of America do the same?

Clark Howard: A lot of us are exhausted by the finances in our household and I’ve got great news on that front. For five months in a row the Feds report you and I have reduced the amount of debt we are carrying. We are steadily on a debt diet. And it is virtually all kinds of debts the amount of money we are taking out on credit cards going down. The amount of money we are taking out for things like car loans is going down and I hope this trend continues. Because we as Americans are in so over our heads with debt that we need to get healthy. I know economists want us to run out and spend money here, there, and everywhere shop till we dropped and all that to boost the temporary or hopefully the permanent recovery in our economy. But for long-term permanent improvement in our country and for yourself we need to reduce debt. I’m Clark Howard for more on my ideas about your wallet go to cnn.com/Clark Howard.

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Ed McMahon Was He So Different? http://www.mortgageforeclosurereport.com/ed-mcmahon-was-he-so-different/ http://www.mortgageforeclosurereport.com/ed-mcmahon-was-he-so-different/#comments Fri, 28 Aug 2009 21:06:18 +0000 wadler http://www.mortgageforeclosurereport.com/?p=801 In one of Ed McMahon’s last interviews he disclosed his frustrations of being forced to file for foreclosure over his $4.8M home.  Ed McMahon was a Superstar who made multi-millions of dollars over the course of his career.  However, during his last days he was forced to file for foreclosure because he was behind a reported $644K in mortgage payments.  To the everyday American the amount of money we are talking about is outrageous and not a realty.  However, Ed McMahon’s situation is not that different than the everyday American.  He owed money due to becoming divorced, he lived beyond his means, and he suffered a career ending neck injury in which he broke his back thus not allowing him to work anymore.  Many “everyday” Americans are experience the same problems.  They may be in endanger of foreclosure due to having an enormous amount of debt, lose of a job, or have come into a series of actions that have caused them to be in an extraordinary circumstances.  To relate to Ed’s circumstance to rest of America MF Report placed an example below:

Example: 

  • ED McMahon
    • Ed’s mortgage was worth $4.8M and owed $644K therefore he was behind by 13.42% on his mortgage payments.
  • Average Amercian Mortgage
    • The average American home was purchased for $247,900 in 2007 (height of market) according to the US census.  The average person in foreclosure is an estimated eight months or more behind on payments.  Therefore, average monthly mortgage $1,687 X 8 equals $13, 496 or 5.44%.

Ed was living far beyond his means.  His mortgage was greater because the value of his house was greater so his percentages may be greater than the average American, but he was a victim of circumstances just like every other American in financial distress.  His house was on the market for two years at the date of the interview and because he refused to lower the price of his house to a realistic market value he fell so far behind on his payments he had to foreclose on his home.  This is representative of a majority of Americans.  Many Americans are under financial duress, but because they believe the market will rebound or because they love their house so much they are not willing to lower the value of their home to be the market leader in their respective neighborhood.  As an owner you have to be able to bring money to the table if you want to sell your home in this economy or you may land up in foreclosure too.  If a person was certain the market would rebound or you were going to keep your job for ten more years then it may be worth fighting to stay in your home.  However, for most Americans it is to tuff to determine the next month. 

The idea MF Report is trying to convey is everyone is at the mercy of our current economic state.  If we live beyond our means and do not adjust our standard of living to our realty and current economic state then as individuals our lives may become an out-of-control rollercoaster which we are unable to regain control over.  Sometimes we may have to cut our losses to survive and be successful in the future.  Remember none of us have a crystal ball.

Below is a summary of the conversation between Larry King and Ed and Pam McMahon.  Please note it is out of context and not word for word. Enjoy.

Larry King:  What happened?

Ed McMahon:  How much time do we have?  Hahahaha! A combination it is like a perfect storm.  Economy problems.  Selling a house right now is a tremendous operations.  We have had this house on the market for two years.  We must have shown it 50 organizations and/or people. Nobody has made an offer it is a lovely home I hate to leave it I want to keep the home I want this all to work out.

Larry King:  And the payments, what is the problem

Ed McMahon: You know if you spend more money then you make then you know what can happen.  A couple of divorces flown in a few things like that, things happen, you want everything to be perfect.  That combination of the economy I have a little injury I have a situation and it all came together.

 Larry King:  What, you broke you broke your neck.  You feel? What at home?

 Ed McMahon: I do not want to elaborate on that but I feel and broke my neck.

 Larry King:  Has that Stopped you from working?

 Ed McMahon:  Oh sure, you know you cant work with this around your neck and uuuhhhh I have to wear this.

 Larry King:  But Pam the assumption is the McMahons are multi-millionaires and multi-millionaires how much behind are you  $644,000 that is what is reported.  Can’t pay; if you are multi-millionaires shouldn’t you be able to pay $644,000.

 Pam McMahon:  Yeah, I would like to know where those multi-millions are.  Where are those multi-millions Ed?

 Ed McMahon: Hahahahahah.

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A Snapshot of the American Economy, Unemployment Rates, and Stock Market http://www.mortgageforeclosurereport.com/a-snapshot-of-the-american-economy-unemployment-rates-and-stock-market/ http://www.mortgageforeclosurereport.com/a-snapshot-of-the-american-economy-unemployment-rates-and-stock-market/#comments Thu, 27 Aug 2009 01:05:33 +0000 wadler http://www.mortgageforeclosurereport.com/?p=744 uncle_sam_bruised_economyMortgage Foreclosure Report has been created with the intent to help Americans preserve the American dream.  We at Mortgagefloreclosurereport.com believe that America is the greatest country in the world and want to help Americans preserve that American dream.  It is undeniable that America has had a decline in prosperity over the past couple of years.  The weakening of our country has been caused by a combination of reasons such as:

  • Legislation passed by the Executive and Judicial branches of government
  •  Corruption and greed on Wall Street
  •  Americans living beyond our means
  • Banks providing substantial home loans to Americans who were never in a position to afford that home

According to the United State Department of Labor, when comparing January 2008 to January 2009, the unemployment rate and the percent of the force that is unemployed rose from 7.6M to 11.6M and 4.9% to 7.6%, respectively.  That is an increase of 4.0M unemployed Americans and an increase of 2.3% in the *percent of the labor force that has become unemployed over the past year.  (Note as of August 2009 unemployment has increased to ~11.00.)

Please note these numbers do not depict an accurate picture of the unemployment crisis in America.  The statistics do not take into account the following.

  • Americans working part-time who are unable to find full time work (~8.0M)
  • Citizens who desire a job, however they are not actively seeking employment (~5.6 million)

Therefore, ~25 million Americans are unemployed.  Per our research there only an estimated 3 million job openings in America as of December 2008.

In addition to the unemployment pandemic in America, the stock market (in reference to the Dow) has dropped below 7,000 points.  This is the lowest it has been 11 years.   (Please note we have seen a great recovery in the market since this article was originally written.  The Dow is now over 9,500 points).

Side Note: The events that led to the downturn in our market and the events that are currently happening after our market started to decline are vary comparable to the events that led to the stock market crash of 1929 and the Great Depression. 

  • After the stock market crash in 1929 the Dow did not hit its lowest point until October 1932 (~3 years).  The market declined 89% in a three year period.  Mortgageforeclosurereport.com compared the highest point in the Dow over the past three years and noted it occurred in October 2007.  Since this peak the market has decreased ~50% over the past year and a half.
  • Real estate values peaked in the mid 1920s and as the real estate values started to decrease the stock market then crashed.  The correlation between peaking real estate values followed by a sharp decline in the Dow during the 1920s is similar to the real estate bubble that peaked in the 2000s followed by the rapid descent of the Dow.
  • Economists debate whether political legislation that was passed by the government may have provided an avenue for the market to decrease significantly in both time periods.  In the 1920s economists argued whether the Smoot-Hawley Act contributed to the stock market crash.  In our current times economists are debating whether the Community Reinvestment Act revisions in 2002 made by the Clinton administration contributed to our current situation.
  • Banks over extended themselves in both time periods
  • When the media reported the stock market crash in the 1920s to the American public there was national spread panic.  This panic led to a decline in market confidence, which led to the crash of the Dow, which led to the Great Depression.  This same panic the American Media created in the 1920s is tenfold in the present.  This media is able to reach out to the American public and the rest of the world 24/7.

By looking at history we can learn some valuable lessons.  First, the past is the past and we have to move on and work towards improving the future.  Second, the worst may have yet to come.  Therefore, we need to take precautions and seek help from professionals.  Finally, there has to be a personal responsibility by each individual American to take care of him/herself and their families. 

Our website is not designed to debate who or what created the financial crisis in America, but rather give the reader a background of what is going on in our country.  Additionally, we want to help the public gain a basic understanding of loan modification, foreclosure, debt consolidation, and a short sale.   

*The percent of the labor force that is unemployed is calculated by the following calculation:

                                Number of Civilian ** Noninstitutional Population in the labor force   

                                Number of Unemployed Civilian ** Noninstitutional Population in the labor force

** Civilian Noninstitutional Population – All persons who are equal to or greater than 16 years of age (aka “working-age population”) and are not members of the armed forces or persons who reside in institutions such as a nursing home, jail, prison, mental hospital, and juvenile correctional facilities.

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Buyer Beware (New Scams) http://www.mortgageforeclosurereport.com/buyer-be-ware-new-scams/ http://www.mortgageforeclosurereport.com/buyer-be-ware-new-scams/#comments Sun, 19 Apr 2009 16:53:51 +0000 wadler http://www.mortgageforeclosurereport.com/?p=558 foreclosure_rescueDuring hard times untrustworthy people seek to prosper off others misfortune.  If you are a person who does not have a firm understanding of the credit crisis, the process to obtain a loan modification, or are desperate seeking help then we want to warn you of others trying to take advantage of the average person.  We want to mitigate the occurrences of people losing money to fictitious companies who have used the internet and other tools of communication to take advantage of you.

There are various types of scams that are popping up all over the internet.  Some of these websites that call themselves “foreclosure rescue services” prey on the innocent who have become victims of this troubling economy. 

  • A first indicator of a company trying to scam a person is they ask for money upfront before starting to help a client.
  • A second indicator is these companies may ask you to transfer the title of your home to a third party (DO NOT DO THIS).
  • Third indicator may be the company is a for profit business.

Ever since Former President George W. Bush announced a free consultation service called the Homeownership Preservation Foundation which was to provide guidance to homeowners in suffering; many knockoff companies have arisen on the internet.

In most states such as California some “Loan Modification” companies may ask you to pay an upfront fee of amounts up to and exceeding $3,000.00 in order to begin negations with a bank on your behalf to stop foreclosure.  This is an illegal act in most states. Companies are not allowed to receive money until they have successfully completed the contracted services.  In these cases even if you signed a “legal” contract you may want to consult a lawyer because you may be entitled to money.

There are additional companies out there that will “help” the victim contact and begin negotiations with the bank.  At first you may believe this company may be able to help you because you have called your bank several times and you keep getting transferred to a call center in India.  This employee located in the call center of the bank does not seem to be any help because he/she appears to be answering your questions according to a script that the corporate office sent him/her.  Therefore, you seek help from a third party.

We reviewed several of these companies and noted that they do not provide help or guidance in the modification and are generally a waste an already struggling family’s income.  To prove that these companies are generally profiteers of others misfortune we posted some important excerpts from a “loan modification company”.

Excerpts:

Fees:  The companies are not doing this for free. They are for profit organizations.  If you are read what the contract they ask you to sign before they agree to help a borrower will noticed that directly on the first page of these companies have a section specific for the fees you will be paying them through this process.  It may read something like this depending on the company.

In consideration for the services provided by Company X (The Company herein) under this contract, Client (that’s you) agrees to pay The Company the total sum of ___________________.  Payments shall be paid in installments as noted below in addition to processing fees, which shall be paid by Client in a lump sum, upon execution of this Contract.  Client acknowledges that the (processing fee) is not refundable and is intended to cover The Company’s costs and labor in performing services under said Contract and that no portion of the processing fees is intended to be used for nor shall it be applied towards payment of any portion of the Client’s mortgage indebtedness or as any part of the Client’s Mortgage Modification.  Client acknowledge that The Company is not and shall not be held for the Client’s inability to raise any monies that may be required to be paid by Client in order to qualify or perform under any Mortgage Modification that The Company may procure for Client.

Upon obtaining a Mortgage Modification Plan deemed mutually acceptable to both the client and the Client’s Mortgage Lender, client shall pay The Company the remaining balance of __________________ as compensation for completion of service.

Mortgage Foreclosure Reports belief on the fees being charged to the customer:

Per our understanding of the Fee excerpt from the contract we believe it is imperative to obtain a trustworthy lawyer that can help you through this process. 

Note in the above excerpt they are charging you a nonrefundable processing fee.  We at Mortgage Foreclosure Report are not even sure we understand what a processing fee is for this company.  It is not as if the employees have to mail massive amounts of documents that would exceed anymore than five dollars via the United States Postal Service, and the employee of the company is only calling, mailing and e-mailing your bank.  Additionally, the company takes (after the processing fee) more funds from you by committing you, through the contract, to give them the remaining balance as compensation for their services. 

Cancellation:  All contracts have a cancellation policy embedded in the contract.  Please make sure you understand what happens if you cancel your contract.  Prior to entering into the contract determine if this is something you are serious about following through with the bank.  If it is not and you cancel you may lose a lot of money for no reason.  The cancellation agreement may read something like this:

Client may cancel this Contract by providing written notice to The Company.  Cancellation of the Contract prior to The Banks completion of 1 month(s) services is considered a waiver in favor of The Bank not to complete the 1 month(s) period of service, The Bank will be considered to have it earned it’s fees as stated in the Fees section of the contract.

Mortgage Foreclosure Reports belief on the cancellation policy being issued to the customer:

Maybe after reading the next excerpt you are starting to see a pattern from the company.  The company is looking to obtain their fees and as much money as possible.  If the company’s employee does do a significant amount of work and you do pull out at the last second then it is only fair to pay the company money for the use of their time.  However, if the paperwork sat on employee’s desk for weeks with no one working on your loan modification or you do fully go through the loan modification process is it fair for the bank to obtain a fee? 

Nonetheless, the important item to take from this paragraph is that if you have do decide to cancel the loan modification process you do it by their specifications.  Usually, the bank requires the client to submit their desire to cancel to be in writing during a specific time period. 

Our suggestion would be to submit this cancellation in writing via mail.  You should go to your local United States Postal Service office.  While there request a receipt which will prove the date and time you sent the cancellation policy.  If you would like further information on to develop a better understanding of the option the USPS offers for proof of delivery visit their website at _________________________.

 

Limitations: The limitation section of these contracts is very important as it states what services you are truly going to receive for your funds that you pay the company.

The Company is unable to guarantee that the Client’s Bank will accept a loan modification plan, therefore The Company will contact and submit the required forms and paper work and continue thereafter to contact the client’s mortgage lender (i.e. bank) at a minimum of four times in which they will document all communication with said lender in writing and phone call within a three month period.  If the lender does not return or inform The Company its denial of the loan modification for the Client.  The Company will inform the Client in writing that the services have been completed.  The Company is unable to guarantee that the Client’s mortgage will not default or their home will be foreclosed.  Under no circumstances will The Company be responsible for the client losing their home.  The Company’s only liable to the client will not exceed the total amount fees paid to The Company by the Client.

 Mortgage Foreclosure Report’s analysis of the Limitations:

Per our understanding of the above excerpt the company is only responsible to contact the Bank four times; whether it is through phone calls and or mail.  This is something you can do on your own everyday and save money.  You will eventually get through to your bank if you are persistent in the modification process.  However, if you need help we definitely recommend a trustworthy lawyer.  You may waste a month or two of mortgage payments on some company that will not be able to help you and in the end you still may get a lawyer.  Therefore, save all the trouble of losing money and get help from the correct person before even starting the process.

Disclaimer:  Finally, we will discuss the disclaimer of these companies.

Client acknowledges that The Company is not a law firm and that its consultants (i.e. employees with no education in loan modification) are not attorneys.  The Company does not provide legal advice.  Client acknowledges that the recommendations of The Company shall not be construed as legal opinions or relied upon as such.  The Company recommends that client consult with an attorney regarding the legal consequences of any foreclosure rescue option or loan modification services that client considers accepting.

Mortgage Foreclosure thought on this excerpt:

What they are truly saying in this paragraph is we do not know what we are doing, we are not lawyers, and you should consult a lawyer.  Therefore, what is the benefit in a company such as this one?  Nothing is beneficial. 

The rest of the contract discusses different ways they can extract money from you and how they are not responsible for any illegal actions you may commit or are they responsible financially if you lose your home.  Furthermore, do not go to a third party company like these go immediately to a lawyer for help.

 

Note that loan modifications have increased by 2000% in some states.  As such we have listed some red flag that could indicate a scam.  Please see below:

  • Complex Acquisition Method: When a company’s proposal for loan modification is complex and suggests contemptible solutions such as transferring the title to a third party so the client can stay in the home without filing foreclosure is usually an indicator of a fraudulent company.
  • Payment of Processing Fees Prior to Receiving Service:  In some situations many people feel they do not understand the loan modification process enough so they obtain a third party (that is not a lawyer) to help.  As we will discuss below this probably not the best option.  However, if you feel you must obtain a third party note the following: As noted above it is illegal for many states to ask for processing fees up front.  An attorney is usually the only person who can ask for a retainer.  The other companies can only collect fees once they have completed the job.  Note processing of a loan modification should not exceed $750.00.
  • Quick Claim Deed: Under no circumstances YOU SHOULD NEVER SIGN A QUICK CLAIM DEED.  This is probably the worst scam in the market.  The fraudulent party coerces the homeowner to sign a quick claim deed.  All homeowner rights are transferred to the fraudulent party or an associate of theirs, however, the homeowner is still left with the financial obligation of the mortgage.
  • Send Mortgage Payments to Only Lender:  If a person asks you to send your monthly mortgage payment to anyone other than your Lender (i.e. bank) immediately dismiss what the party is saying and understand it is a scam.

Prior to dealing with a modification specialist/company ask some simple question:

  • Are they licensed; if yes what is their EID #.
  • What is their mailing address
  • Do they have 15 plus years of experience with Loan Modifications
  • Are they formally Industry Professionals

If they answer yes to these questions then there is a high probability that they are partaking in fraudulent business practices and are looking to deceive their prospective clients.

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Banks Profiting from Loan Modifications http://www.mortgageforeclosurereport.com/banks-profiting-from-loan-modifications/ http://www.mortgageforeclosurereport.com/banks-profiting-from-loan-modifications/#comments Tue, 14 Apr 2009 22:03:19 +0000 wadler http://www.mortgageforeclosurereport.com/?p=432 first_american_is_greedyThere are a multitude of reasons why we are in this foreclosure pandemic. One reason is due to the banks having predatory lending practices. Banks were being dishonest in many ways, but the most common scenario was the lender granting a loan for house to a borrower who would not normally be approved for a loan. In addition to the borrower not being able to afford their house, the house they were purchasing was overvalued.  As the country has fallen into a recession/depression these homeowners are unable to sell their homes for the original purchase price and/or they are unable to meet the monthly mortgage fees. As a result borrowers have approached the banks to try and negotiate a loan modification. A loan modification does generally not reduce your principal. The loan modification reduces your monthly mortgage payment and annual interest rate. The bank reduces your monthly payment and interest rate by extending the life of the loan (i.e. a 30 year mortgage rate is extended to a 40 year).

Due to the greed of the banks and the public our county has been placed in a financial bind.  Obtaining a loan modification, foreclosure, or filing bankruptcy are the only options for many Americans. However, it is unfortunate that during this crisis banks are still trying to profit from the situation instead of trying to rectify their mistakes and aiding their clients.

Loan Modifications would help the homeowners and the banks would still profit for several reasons.

1. The borrower continues to pay interest on an inflated principle for a longer period of time (i.e. changing the life of the loan from 30 to 40 years). When the borrower purchased their home it was most likely 25% to 45% overvalued.

2. By allowing you to stay in your home they do not have another foreclosure that will sell for a quarter of its value.

3. Obtaining incentives from the government to help a distressed homeowner obtain a loan modification.

Lenders have created a win/win situation for themselves. Therefore, if you are going to obtain a loan modification you should try to obtain the best deal possible. The banks are dealing with this on a daily business and are going to try and profit as much as they can from the situation. As such you should seek help from a lawyer (professional negotiator). A lawyer who “specializes” in loan modifications deals with this situation on a day-to-day basis. The law professional should understand all the current loan modification regulations and should know how to negotiate your interest rate, monthly payments, and any fees associated with the restructuring.

The banks who are supposed to be helping the mortgagee are/were wealthy corporations that have unlimited resources and a team of lawyers that write each document. Therefore, whenever a person asks you to sign a document (loan modification application) you have to be careful and skeptical. Moreover, have a full understanding of what you are signing. This is why we believe it is the utmost importance for all persons desiring a loan modification to consult an attorney during each step of the process. The initial outlay of money a person may have to spend for a lawyer may seem expensive at first (especially during these hard times), however, the money you may potentially save in the long run or the restful sleep you will get from knowing you have secured a roof over your family’s head in the appropriate legal manner is priceless in comparison.

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