Texas Attorney General Greg Abbott’s office filed for a Temporary Restraining Order against Excel Loss Mitigation Inc., United Servicing LLC, Bell Investments & Developments LLC and their key directors, David Bell and David Espy to stop their foreclosure rescue business.

Further, a Harris County (Houston) district judge froze their assets after the AG’s office charged the companies with running foreclosure “rescue” scams.  All of the defendants were also charged with failing to post a bond with the Texas Secretary of State, which is required to legally conduct business in the state of Texas. Read the rest

B

Today, one in five homes in America are worth less than their mortgage balances.  Research shows that in many areas of the nation, formerly “real estate rich” people are drastically underwater.  They have little incentive to keep paying their mortgages and mortgage lenders are facing increasing risks of walkaways and foreclosure. 

From the Wall Street Journal, here are some of the worst performing areas:

                Area                                      Percentage “Under Water”

             Las Vegas                                          67.2
                Stockton, CA                                      51.1
                Modesto, CA                                      50.8
                Reno, NV                                           48.5
                Vallejo-Fairfield, CA                          46.5
                Merced, CA                                        44.4
                Port St. Lucie, FL                                43.5
                Riverside, CA                                     42.8
                Phoenix                                              41.7
                Orlando, CA                                       41.7

                US Average                                        21.9                       

In San Jose – Santa Clara, California, 80% of loans obtained in the past 5 years were jumbo loans reflecting the affluence in the area.  Yet now, 12% of all sales are short sales.   One of the reasons for this is that jumbo loans are not readily available nowadays.  Without financing, sales are very difficult for those at the top.  And with increasing unemployment, even at executive and high level management levels, we can anticipate foreclosures at higher rates even in the very best neighborhoods. 

I’ve certainly seen this phenomenon in Chicago and North Suburban Illinois and it’s only a matter of time before we see the same thing developing even in a conservative market like Wisconsin.

Mortgage modifications in bankruptcy would have helped.  But the Senate voted no.  Senators from Arizona, Florida and Nevada voted no even though this legislation would have benefited their states considerably.   Senators Kyl and McCain of Arizona voted no even though 41.7% of homes in Phoenix are under water.  So did Senator Martinez of Florida despite the devastation mortgage foreclosures have wrought in throughout Florida.  And so did Senator Ensign of Nevada despite the 67.2% underwater rate in Las Vegas. 

Who do these Senators represent?  As Senator Durbin says, the Senate is owned by the Banks.  Rather clearly, these Senators are the banks’ lackeys.  When will the people stand up for their own interests?  Mortgage foreclosures are not just a problem for the ones who lose their homes.  It’s a problem for the entire neighborhood and ultimately the entire community.    People – raise your voices.  You vote.  Banks don’t.

Almost every foreclosure complaint filed includes a “lost note count.”  The plaintiff, which is usually a bank you never heard of in connection with your loan, is claiming that it had the original promissory note but lost it.  This is a lie, and an expert foreclosure defense attorney will be able to uncover the lie.

The truth is that the plaintiff never had possession of the original note.  The plaintiff was probably “sold” the note as part of a bundle of “securitized” notes (this bundle is known as a securitized trust), but the actual delivery of the original note never took place. Read the rest

When the Senate voted against legislation which would allow mortgage modification in chapter 13, it gave a green light to mortgage foreclosures at a record pace.  Now, the only people getting crammed-down are American Homeowners.  Speed limits on foreclosure suits are gone.  It’s pedal to the metal.

RealtyTrac reports that foreclosure filings in April broke all records.  Close to 350,000 new foreclosures started in April – more than 32% than in April 2008.  This means that in A alone, one out of every 374 housing units went into foreclosure last month alone, the highest rate since January 2005 when this report started.

While repossession fell, this only reflects delays in foreclosure because of statutory or voluntary moratoria.

Why is this happening?  One thing is clear – the mortgage industry feels that it has a clear path now that debtors won’t have the right to modify mortgages in chapter 13. Read the rest

On May 4, 2009, the South Carolina Supreme Court took the unusual step of issuing a temporary restraining order to stop foreclosure sales on mortgages owned by Fannie Mae or Freddie Mac, or that are otherwise eligible for modification under the Home Affordable Modification Program [HAMP].  Blogger Russ Demott points out the importance of the inclusion of HAMP-eligible loans.

Justice Toal’s decision to add HMP-participating servicers in the TRO is a big plus for homeowners who might not have Fannie Mae/Freddie Mac loans but who were stuck in the Kafkaesque process of fighting off foreclosure while, at the same time, dealing with a loan modification.  In many of these cases, the loss mitigation departments of huge lenders or servicers have promised modification while the foreclosure departments have pressed on with foreclosure leaving home owners with no means of keeping their homes. Read the rest

Victorville, CA saw the unthinkable when a mortgage bank not only foreclosed on new homes, but proceeded to demolish them rather than continue to let losses mount.

Think about the families that could have enjoyed their lives here, the money wasted, and the excess of the real estate bubble as you watch this.

On Tuesday South Carolina’s highest court issued a court order to temporarily stop home foreclosure sales in the state so that homeowners have more time to take advantage of a new federal program to help them refinance their mortgage loans. Read the rest

A short sale (described by Illinois consumer attorney David Leibowitz) allows you to sell your home for less than you owe on it.

Sounds great, but there may be tax consequences of a short sale.

Most short sales involve two or more mortgages, though any home sold for less than what is owed is, by definition, “short” of the money needed to pay the liens.

The lienholders, mortgage companies, must sign off for the buyer to get clear title to the property.

But, signing off on the lien, does not necessarily mean that the debt is forgiven. Read the rest