Based on CNN news,  Bush threatens foreclosure bill vetoHere is the whole report in CNNmoney.com

Bush threatens foreclosure bill veto

The White House opposes proposed legislation’s $4 billion to help states purchase foreclosed properties with Fannie and Freddie footing the bill

WASHINGTON (AP) — A broad bipartisan coalition supporting a massive foreclosure rescue beat back GOP efforts to gut it Thursday, defying a White House veto threat and quashing a bid to make it victim to revelations about two senators’ VIP mortgages. Continue reading this post…

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Based non ABC News, Senate leaders announced an agreement Wednesday on legislation to ease the slumping housing market and help millions of families threatened by foreclosure.

Here is the highlight of the proposed legislation plan by congress to help housing market:
1. $4 billion in grants to local governments to buy and refurbish foreclosed homes;
2. New authority for states to issue bonds to be used to refinance subprime mortgages;
3. A $7,000 tax credit for people buying new homes or properties in foreclosure.
4. A broader rewrite of the FHA that reduces down payments on FHA-insured loans and raises the dollar limit on mortgages that FHA can insure. Continue reading this post…

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The Worst of Home Foreclosures Yet to Come

Original article from http://besthomesellingtips.com/. Posted with the permission of the the author John W.

Foreclosure avalanche trigged by subprime mortgages started in 2007 will peak in 2008, based on the data from Credit Suisse via the IMF. Following chart from Credit Suisse via the IMF shows the heavy subprime resets in 2008. Number of home foreclosures will be down in 2009. However, the worst is still not over yet. Starting from 2010, home foreclosures due to the reset problems with Alt-A and Option Adjustable Rate Mortgage (ARM) loans will show up if there is nothing to be down.

The time frame for the reset of ARM and options will be in the period of 2009 to 2011. Many of the homeowners in the 2009 to 2011 reset periods still have time to refinance if they can. However, due to the problems of housing market and tightening of the lending criteria, I don’t know how many homeowners with ARM and option ARM can get refinanced. If majority of them cannot get refinanced or cannot afford their mortgage payments even if they get refinanced, the problems of home foreclosures will linger for several years. The main problem is that all these Option ARM resets in 2010 and 2011. Because homeowners with option ARMs are selecting the minimum payments, they have negatively amortizing and will owe more than their properties are worthy. This is why the worst has not been coming yet.

I do not know how much impact that Bush’s Project Lifeline and the call for interest rate freeze have on stopping foreclosures. I also don’t know how much impact Fannie Mae’s HomeSaver Advance has on stopping home foreclosures. But, if homeowners are unable to make their monthly mortgage payments even after you freeze the interest rate, put the foreclosure on hold for one more month, or add the unpaid to the mortgage balance, there is no way you can stop the home foreclosures for those homeowners. Let’s wait to see and hope for the best!

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News Release from Fannie Mae. On Feb 27, 2008, Fannie Mae (FNM/NYSE) announced  that, as part of its HomeStayTM initiative to support its mortgage servicers as they provide at-risk borrowers with refinancing and loan workout assistance, it is offering a new option — HomeSaver AdvanceTM.

HomeSaver Advance is designed to help qualified borrowers bring delinquent mortgages current and keep their homes. With HomeSaver Advance, servicers can now offer an unsecured, personal loan that will enable a qualified borrower to cure the payment default on a mortgage loan that Fannie Mae owns or has securitized, with fewer up-front costs and generally in less time.

“HomeSaver Advance will help Fannie Mae streamline its loss mitigation efforts and offer loan servicers a new way to cope with a delinquent loan,” said Mike Quinn, Fannie Mae Senior Vice President for Single-Family Credit Risk Management. “Our research shows that most borrowers become delinquent because of a temporary life event or hardship. This loan can offer these borrowers another alternative, and help prevent a temporary setback from becoming a foreclosure.”

HomeSaver Advance will provide Fannie Mae with an enhanced ability to manage credit risk and conserve capital during the housing downturn. Fannie Mae anticipates that HomeSaver Advance will reduce the number of delinquent mortgage loans it purchases from its mortgage-backed securities trusts and the fair value losses it would record in connection with those purchases.

HomeSaver Advance is just one of a variety of workout options that Fannie Mae’s servicers can offer to borrowers. HomeSaver Advance is being rolled out and should be available to all Fannie Mae Servicers by April 15, 2008.?

HomeSaver Advance Highlights

• Loan amount up to the lesser of $15,000 or 15% of the original UPB for delinquent PITI, escrow advances, and advances for attorney fees and costs and up to 6 months of unpaid HOA fees (12 months, where the HOA fee is paid once per year)

• Advances may not include late charges or other ancillary fees and costs

• The full loan amount is applied directly to arrearage (borrower never receives funds in hand)

• Truth in Lending Statement and unsecured promissory note are executed at time of agreement with borrower

• Note rate at a fixed rate of 5% with 6-month no-interest/no-payment period

• Amortization period of 14.5 years after the conclusion of the 6-month no-interest/no-payment period

• Workout fee paid to servicer is $600

• Fannie Mae will contract with a third party to service HomeSaver Advance promissory notes

Loan Eligibility

A HomeSaver Advance can be made in connection with any mortgage loan that is purchased or securitized by Fannie Mae (including a pooled from portfolio loan) if the mortgage loan meets the following criteria:

• The mortgage is delinquent in an amount equal to or greater than two full payments of principal, interest, taxes, and insurance;

• The mortgage must be seasoned with a minimum of six monthly payments made since the date of loan closing;

• The mortgage may secure a principal residence, second home, or investment property—owner occupancy is not required; and

• The mortgage may generally be any type of loan (i.e., fixed-rate, adjustable-rate, interest-only, bi-weekly or daily simple interest).
HomeSaver Advance does not have a loan-to-value restriction or property valuation requirement.

Borrower Eligibility

Servicers must also ensure their borrower meets the following qualifications:

• The borrower has successfully resolved the reason for delinquency;

• The borrower demonstrates a long-term financial capacity to resume making the payments on the first mortgage loan and all other debts, including any subordinate mortgage loans (verbal confirmation of financial capacity is acceptable);

• The borrower has surplus income to support an additional monthly payment of at least $200 but does not have the ability to cure the arrearage using a repayment plan within a period of not more than nine months;

• The borrower is willing to participate in HomeSaver Advance; and

• The borrower does not currently have an outstanding HomeSaver Advance note; the HomeSaver Advance option may only be used once during the life of the particular first mortgage loan.

Borrowers involved in an active bankruptcy proceeding or who have had the debt previously discharged in a bankruptcy action are not eligible for this loss mitigation option.

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What is the income tax consequence for the borrower from a short sale or deed in lieu? This is a question frequently asked by borrowers facing foreclosure. Income tax may be imposed for a cancellation of a debt. (“COD”) before Bush Foreclosure Tax Relief Bill into law.

I am not an income tax professional and not entitled to give you advices on this issue. You should always ask your accountant or attorney to explain the income tax consequences of giving property back to a mortgage lender. What I am giving here is only the information related to income tax consequence for the borrower from a short sale of deed in lieu. It should never be taken as advice. Please consult you accountant or attorney for any advice as I have always suggested.

Dec 20, 2007, President Bush signed Foreclosure Tax Relief Bill into law. The bill provides tax relief for homeowners facing foreclosure or bankruptcy. The bill eliminates federal taxes due from homeowners who have had mortgage debt forgiven as part of a foreclosure or the renegotiation of a loan. Before this law becomes effective, such debt forgiveness had been treated as taxable income. If your home is a primary residence, you will be covered by this law now.

Based on my research, even before this bill was singed into law, you might or might not have the tax consequences depending on whether your property is a primary residence or investment property and whether your short sale or deed in lieu results in COD gain or loss. Here is why.

Let’s start with COD gain and loss.

First of all, a short sale, deed in lieu, or even the foreclosure sale is a real estate transaction. Often in this situation the borrower transfers the house to the lender as in deed in lieu or to a third party as in short sale. This transfer is treated as a sale or other disposition of the property and results in the borrower realizing gain or loss. At the time of the transfer, the lender often cancels the remaining mortgage debt, leading to COD income.

If the debt is cancelled in part or full in a foreclosure proceeding, you will have COD income. This COD income is equal to the difference between the unpaid amount of the debt and the fair market value (FMV) of the property you transfer to the lender or a third party to discharge that debt. For example, if your debt prior to foreclosure was $210,000 and the FMV of the property was $180,000, you would have $30,000 of COD income. That is, you have $30,000 gain.

However, you may not have COD income under following circumstances:

1. Your lender does not cancel your remaining unpaid portion of debt after your house is transferred to the lender by foreclosure. This could happen if the lender believes it can still collect the balance of the debt, that is, your lender wants to file deficiency judgment on your debt. In that circumstance, you would not have COD income until the lender discharged the debt or the statute of limitations on collection of the debt expired.

2. The FMV of your house that is foreclosed upon is greater than the amount of the mortgage loan balance you owed. If the FMV is sufficient to pay the loan balance in full, the debt is satisfied and there is no COD income because no part of the debt was discharged or cancelled. For example, if the FMV of your house was $300,000, the amount of the loan balance was $240,000. If your lender granted you the deed in lieu foreclosure or your house was sold in a short sale or in the foreclosure sale in $240,000 or more. The proceeds are more than enough to satisfy the debt in full.

If the house is your principal residence, you may be able to exclude part of all of the gain under I.R.C. 121. See Publication 523, Selling Your Home. The COD gain on the foreclosure of your residence should be excluded under I.R.C. 121 and you should not be required to report the gain on your return. Therefore, based on opinion, there should not be tax consequence even without the Foreclosure Tax Relief Bill.

If your property is an investment, you should consult your account regarding the gain and loss on property foreclosure. You should also check with your accountant to see if the Foreclosure Tax Relief Bill covers investment properties.

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Summary of Utah Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Primary Security Instruments: Deed of Trust, Mortgage
Timeline: Varies
Right of Redemption: Yes
Deficiency Judgments Allowed: Yes

In Utah, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure

The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold in the manner of normal execution sales.

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

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:

1. A notice of sale must be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the county where the property is to be sold. The last publication must be at least ten (10) days but not more than thirty (30) days before the date of sale is scheduled.
2. The notice of sale must also be posted, at least twenty (20) days before the date of sale is scheduled, in some conspicuous place on the property to be sold and at the office of the county recorder of each county in which the property is located.
3. The place of sale must be clearly advertised in the notice of sale and the sale must be held between the hours of 8 am and 5 pm.
4. Borrowers do have a right of redemption in Utah, but the court may extend the redemption time past the time allowed in regular judgments so there is no set length of time.

It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price and the lender may be able to seize the property until the differing amount is paid.

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There are several ways to stop home foreclosure. You do either one of them a combination of more than one them.

Here are the options you have to stop home foreclosure:

A. Options can be used to save your home:
1. Loan modification
2. Reinstate your loan with you IRA money or borrow from relatives or friends
3. Work with default paper investors
4. Partial claim through FHA loan insurance
5. Request forbearance from your lender
6. File bankruptcy to buy you sometimes

B. Options can be used to stop foreclosure sale:
1. Do a short sale to prevent foreclosure from staining your credit record.
3. Do a deed in lieu foreclosure to give the property back to lender in exchange for lender not to report your home foreclosure to credit bureau.

If none of above options works for you, you can still have other way to keep your home. You can also file Chapter 13 bankruptcy to stop the foreclosure sale right at the morning of the day that foreclosure sale is conducted. You can also choose to do a short sale to stop foreclosure and keep your credit history not to be stained by the foreclosure record.

Some borrowers thought that filing Chapter 13 bankruptcy could automatically save their home. But, this is not true. If you file a Chapter 13 bankruptcy, you may or may not get approved by the judge depending on your financial situation. If the judge does not approve your bankruptcy filing, lender can initiate the foreclosure on your home again. Filing Chapter 13 does help you to buy sometime, possible few months and even a year or longer to save your home. Some borrowers do use this strategy to stay in the home for free for few months, a years, or even longer. Imagine that if you stay home for a year of more without making your mortgage payments. Let said, the monthly mortgage payment was $1500 per month and $18,000 a year. Staying in a home for one year is equivalent to an increase of pre-tax salary of at least $25,000 a year. For some, this is a very good option for them. However, I don’t encourage you to do that because the financial consequence can cost far more than that. Do you still remember how much could cost you for being unable to own a home for ten years as I described earlier?

If you got a Chapter 13 approved by the court and you make ALL of the payments, you can keep the house as soon as you make payment under the plan.

I am not an attorney and not in a position to give you any legal advice. What I am giving you is the information that how it works. You should also always seek the consultant from an attorney on any legal issue. Again, I am not giving legal advice on whether you should or should not file a bankruptcy to keep your home.

But in my personal opinion, filing bankruptcy is the last avenue you should take. You can file Chapter 13 right before the morning of the foreclosure sale to stop it. In order to do it right, you should at least give yourself one week to work with a good bankruptcy attorney before the foreclosure sale is conducted.

Now, after you reading this book, you should know that filing bankruptcy should never be your first option because you have known that there are several much better options than bankruptcy. The reasons I said so are:

1. It is not at bankruptcy attorney’s best interest to tell you not to file bankruptcy;
2. It is not the best interest for a bankruptcy attorney to tell you all those options you have to keep your home;
3. It may not fair to some attorneys that they don’t want you to know those better options you have because most of them do not know those options that I have been described in this book.
4. There are upfront costs to you for filing bankruptcy. It cost you $1500 or more to hire an attorney to do it for you.
5. There are future financial consequences for having the bankruptcy in your credit reports.
6. There could be uneasiness and even pain emotionally for some people to go through the lengthy process of bankruptcy.

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The Bush administration Tuesday announced an expanded plan for lenders to help homeowners by temporarily suspending foreclosures for people facing the imminent loss of a home.

The plan, called Project Lifeline, will allow overdue homeowners to suspend foreclosures for 30 days while they try to work out more affordable terms with lenders.

This plan covers anyone with mortgage payment 90 days overdue which is different from the Bush’s previous plan in December 2007, which only covers borrowers whose loan were made between  Jan.1, 2005 and July 31, 2007.  This plan can save much more homeowners from foreclosures. However, the number of homes how many can be saved is hard to estimated.  In my opinion, one thing is for sure, that is, homeowners who don’t have income to pay mortgage even with lower interest rate and better terms still have to face foreclosures.

To read the news click HERE.

To watch the news on the video, click HERE.

To post your questions for help, click HERE.

To list your home for a short sale for free, click HERE.

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Summary of Foreclosure Laws in the State of Ohio

Key Facts of Foreclosure Laws in Ohio

- Judicial Foreclosure Available: Yes
-  Non-Judicial Foreclosure Available: no

- Primary Security Instruments:  Mortgage
- Timeline: Typically 157 days. Click HERE for details.
- Right of Redemption: No
- Deficiency Judgments Allowed: Yes

Judicial foreclosure in Ohio

By default, Ohio uses judicial foreclosure. A foreclosure in Ohio begins when a lender files court action and records a notice of a pending lawsuit (Lis Pendens) against the borrower(s)/mortgagor(s). The lender notifies the borrower(s)/mortgagor(s) and any other affected parties in person or in some cases by mail or publication. If the borrower(s)/mortgagor(s) does not respond to the court action within a specified amount of time, the county clerk can find the borrower(s)/mortgagor(s) in default and the lender can ask the court to make a final ruling. If the court rules against the borrower(s)/mortgagor(s), the ruling will include the total amount owed to the lender and the foreclosure sale date.

The lender is not required by state law to notify the borrower(s)/mortgagor(s) before initiating the foreclosure process, but individual mortgages or deeds of trust might call for this. The borrower(s)/mortgagor(s) can stop the foreclosure up until the date of the sale by paying the total amount owed to the lender.

Notice of Sale / Auction

The sale date is typically 20-35 days after the court ruling, but this may vary depending on the individual court. The clerk of court issues a notice of sale containing the location, date, and time of the sale. The notice is published once a week for three weeks.

The actual sale is a public auction and the property cannot be sold for less than two-third of the appraised value of the proeprty as established by the appraisers. After the sale, a confirmation of Sale by the court must be obtained.

After the sale, the clerk transfers ownership to the winning bidderwith a quitclaim deed.

Information provided here is only for a general view of the state foreclosure law and it is not for legal advice. We highly recommend you to consult legal professional or licensed attorney for advice in any legal issues related to foreclosures.

Post your questions for more help, click this link: http://foreclosure-help-centers.com/forum/

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If you are facing foreclosure and you have FHA and VA loans, you should be aware of special rights which you may have. 
The FHA provides many alternatives and ways for borrowers to get help. These may include mortgage modifications (changes), special forbearances (allowances), and other actions you can take to avoid foreclosure. FHA works closely with customers who have FHA-insured loans.

Once you are falling behind your mortgage payments, you should always contact your lender(s) and discuss your options with your lender(s). Following are possible options you can have.

1. Reducing your interest rate -  a way of loan modification.
2. Extending the time to pay back of your loan -a way of  loan modification.
3. Putting your past due payments in to the balance of your loan  - a way of loan modification.
4. Putting the past due payments on to the end of your loan  - a way of loan modification.
5. Selling your house for less than you owe the bank  - it is also called short sale. You can list your home for sale for free at http://short-sale-listing.com.
6. Giving the house to the bank or the government in exchange for what you owe - it is also called deed in lieu.

Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA’s National Servicing Center at toll free (888) 297-8685 or via email hsg-lossmit@hud.gov.

Related links:

Foreclosure laws

Foreclosure timelines

Foreclosure discussion Forum

Free foreclosure help

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