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Avoid Losing Your Home

Have you missed one or more mortgage payments?

Do you foresee not being able to make mortgage payments in the future?

Are you living in fear of foreclosure?

If you’ve answered ‘yes’ to any of these questions, you’re in the right place.

Seminar: America’s Housing CrisisHow to Avoid Losing Your Home

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Peter Spino, Jr.Senior Foreclosure Prevention CounselorCommunity Housing Innovations, Inc.

Brooklyn Law School, JD 1996Admitted in New York & Massachusetts

OVERCOMING FEAR IS YOUR GREATEST OBSTACLE.

BY COMING HERE, YOU HAVE DONE THAT.

IT IS ONLY GOING TO GET EASIER.

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CONGRATULATIONS!

What the Federal Government is doing…

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Prior to President Obama’s recent “MAKINGHOME AFFORDABLE PROGRAM,” there were afew lender and legislative attempts to help with the

Foreclosure Crisis, but they provided limited value toborrowers.

Crisis Continues to Grow 5

IRVINE, Calif., April 16 /PRNewswire/ --RealtyTrac(R) (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report(TM) for Q1 2009, which shows:

Foreclosure filings -- default notices, auction sale notices and bank repossessions -- were reported on 803,489 properties in the first quarter, a 9 percent increase from the previous quarter and an increase of nearly 24 percent from Q1 2008.

One in every 159 U.S. housing units received a foreclosure filing during the quarter.

N.Y.S. Action: Residential Foreclosure Program

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In New York, foreclosure filings increased 150% to almost 39,000 homeowners since 2005.

Governor Paterson helped to legislate:

90 day pre-foreclosure notification period$25 million counseling fundNew requirement that lenders meet with

borrowers facing default

Source: 6/20/08 www.lohud.com,“Fixing Mortgages” A Journal News Editorial

What is foreclosure in NYS?8

FORECLOSURE TIMELINE

BORROWER DELINQUENT - 2 to 3 months late with mortgagePayments; although this timeframe has been greatly expanded recently.

90 DAY PRE-FORECLOSURE NOTICE – For all subprime and non-traditional loans.

ACCELERATION LETTER – Mortgage Default and entire balancebecomes due.

FORECLOSURE CASE INITIATED – Lender files a Lis Pendens,

Summons and Complaint with court.

Foreclosure Timeline

ANSWER DUE – You have 20 days to answer if served personally and 30 days if by mail.

MANDATORY SETTLEMENT CONFERENCE – Must be held within 60 days from Lender filing proof of service for all subprime and non-traditional loans.

BORROWER ANSWERS – Borrower presents defenses and counter-claims. Discovery begins and Lender will make a Motion for Summary Judgment. If denied, there is a trial or settlement.

DEFAULT – When borrower fails to answer.

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Foreclosure Timeline

MOTION FOR ORDER OF REFERENCE – Lender makes this motion and Judge will sign Order. Court appoints a referee to compute amount owed by borrower.

MOTION FOR JUDGMENT OF FORECLOSURE AND SALE- Lender submits this to court. Once signed, Lender schedules auction with referee and advertises auction in newspaper.

AUCTION – The bank attempts to auction the property. If there is no third party buyer, the Lender will take title. If the property is sold for less than is owed, the bank may seek a deficiency judgment; although we don’t see this happening very often.

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FORECLOSURE DEFENSE

Litigation

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Defenses to Foreclosure

Predatory LendingLoan FraudStanding and Capacity to SueAffirmative Allegation of Ownership

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Defenses to Foreclosure

Banking Law Sec. 6-1 and 6-MNY General Business Law Sec. 349

(Deceptive Practices Act)

Truth in Lending ViolationsRESPA Violations

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Predatory Lending

A loan based upon the appraised value of the property without regard to ability of the borrower to repay.

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Loan Fraud

• Bank or Broker misrepresents income to the lender

• Bank’s appraiser overvalues property• Negligent Underwriting• No Due Diligence

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Ways of Perpetrating Loan Fraud

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Ways of Perpetrating Loan Fraud:When projected payment schedule is wrong because actual payments due are higher.

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Goals of the Foreclosure Defense

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Goals of Foreclosure Defense

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Obtain damages

Delay the foreclosure for anextended period of time

Better bargaining position for re-negotiation of the loan, including possible reduction of the principal amount.

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Source:The Wall Street JournalJune 18, 2008

Advocacy:

“The mortgage crisis could have been alleviated by the involvement of more lawyers.”

-Michael Schill,

Dean, UCLA School of Law

Your foreclosure counselor, your lender and you decide what to do next…

THERE ARE OPTIONS TO FORECLOSURE:

Reinstatement Forbearance Short Sale Short Refinance Deed in Lieu of Foreclosure Loan Modification

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OPEN THE LETTERS. THEY DO NOT BITE.

CALL OR WRITE TO YOUR LENDER’S (BANK’S) LOSS

MITIGATION DEPARTMENT IMMEDIATELY.

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What You Can Do

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Forbearance

If you’ve just lost your job…

Your lender may agree to a forbearance where they allow the homeowner to delay payments for a short period of time.

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Short Sale

An agreement made with a lender to accept less than amount owed by a borrower via a sale of the property to a third party.

The lender releases the borrower from the mortgage, preventing foreclosure.

Short Refinance

Similar to a shortsale but the lender allows borrower toobtain a refinanceat a lower loan amount thereby reducing principal

If you are speaking with a servicer of loans, then you must go to another lender.

Only a few lenders doing right now.

Similar to refinancing but more difficult and longer process.

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DEED IN LIEU OF

FORECLOSURE

Lender agrees to allow a borrower to sign the property over to the bank without having to foreclose. This used to be extremely difficult, but now most lenders will at least consider. Lender forgoes deficiency judgment.

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Loan Modification

The lender will agree to add the amounts due to the back of the loan.

This agreement consists of adding the past-due payments and penalties to the remaining principal, so that the homeowner can pay off the past-due amounts over the life of the loan.

This is possible only after careful debt evaluation.

Loan Modification

There are a lot of companies out there claiming they can help you modify the terms of your loan, for a fee.

CHI is funded by the New York State Division of Housing and Community Renewal to do this for you at no charge.

Modifications are not guaranteed and you still must qualify.

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MAKING HOME AFFORDABLE PROGRAM

Incentives have been put in place to encourage the banks the lower payments to 31% of your debt to income.

Lenders will generally lower your interest rate as low as 2% for a 5-year term.

Lender may agree to extend the term of your loan.

IF YOU QUALIFY

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www.makinghomeaffordable.gov

Lenders may consider reducing the principal amount of your mortgage; although not likely.

The plan provides for refinancing of loans guaranteed by Fannie Mae and Freddie Mac.

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Loan Modification

REQUIRED DOCUMENTS FORLOAN MODIFICATION

One month of paystubsTwo months of bank statementsHardship LetterFinancial StatementW2 and/or tax return

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PLEASE ASK QUESTIONSAND TAKE DOWN MY NUMBER

Peter Spino914-595-0980

Thank you all for coming.32