Sam Pompeo | Ewing & Associates

Some good news for distressed homeowners

By: Sam Pompeo

Remember we discussed the foreclosure time line in my previous blog; well here is some exciting news for all you homeowners in distress. Fannie and Freddie have once again elected to give everyone in default a big Christmas gift. They have stated that they will not foreclose on any homeowner between now and January 3^rd2011. They did however state that they will continue to process loans in default during the holiday season and move them through the system on the back end all the way to the point of Trustee Sale, but they will schedule NO sales until after the Christmas Holidays; “Merry Christmas!”

What does this really mean? Well it simply means they are further delaying the inevitable. The pipeline will continue to swell with homes slated to be sold at Trustee Sale and we will see a marked increase of sales following January 3^rd. This is a temporary reprieve and one that Fannie and Freddie adopted last year. Maybe they believe they are creating good will by delaying the foreclosure sale? All they are actually doing is ramping up the number of foreclosures to be delivered in the first quarter of 2011.

Problem with this approach is that when instructed by the Feds to cut 10% from the principle balance on all loans that are underwater they simply said NO. Interesting that the Feds would pass a bill and sign it into law and Fannie/Freddie simply thumb their nose at it. Then they throw out this crumb and expect everyone to swoon over their generosity. Who is in charge here anyway? The HARP, HAMP, and other bailout programs launched by the Feds have all failed to hit the mark helping less than .01% of homeowners in distress. Statistics show that since the launch of the HARP and HAMP less than 13,000 homeowners nationwide have actually benefited by the programs. These are Billion dollar programs and I for one want to see an accounting of where all the money went..

EwingSIR does not guarantee information contained in this blog, readers are encouraged not to rely solely on this information and to do their own independent research of facts contained herein. Blog information was obtained from independent sources that we do not endorse, and we do not investigate this information for accuracy.

From missing mortgage payments to Foreclosure, what is the REO timeline?

By: Sam Pompeo

Historically a foreclosure in the state of CA has always taken approximately 180 days. During the first 90 days you are simply delinquent on your payment and the banks only remedy is to charge you a late fee and pester you with phone calls. After 90 days the bank may instruct the Trustee to record a “Notice of Default”. The NOD is public notice that you are delinquent and this information must be published prior to taking the next step. During this notice of default period you may pay the back payments including late fees and reinstate your loan on its original terms. If you fail to do this and an additional 90 days lapse, the bank may then instruct the Trustee to record a “Notice of Trustee Sale”. Once the NOTS is recorded the bank is no longer required to take back payments and may at their discretion call the loan due in Full with the addition of penalties and foreclosure fees. The Trustee sale or foreclosure sale as it is commonly called typically follows within a month of recording the NOTS.

As a data point it is important to recognize that the model I described above has been in place for well over 100 years. Today a typical foreclosure takes the banks well over 400 days. The timeline has swelled because of the sheer numbers of homeowners in default. It is not uncommon for a homeowner to tell me that they are a year behind in Mortgage payments and the bank has not yet recorded the NOD. The system is currently overwhelmed and banks are exploring other options to help mitigate the influx of REO. Some of the measures currently in place include “Loan Modification” and “Short Sale”.

My next blog will explore the differences between a Short Sale and a standard sale…