How could the National Mortgage Settlement Affect You?
November, 2012 - Issue #97
Thanks to the National Mortgage Settlement, borrowers and sellers - even those who may not have been directly affected by bank error - can receive major financial relief. The estimated $25- to $32-billion settlement will be allocated in a variety of ways. These include principal reduction for at-risk "underwater" homeowners, refinancing for caught-up borrowers and additional relief in the form of anti-blight programs and more.

Short Sale & Other Assistance Programs - Providing New Hope to Avoid Foreclosure
"This settlement, coupled with the California Homeowners' Bill of Rights, boosted transparency and simplicity when it comes to short sales and the prevention of foreclosures," says Dave Rendall, a licensed real estate Broker and lead legal counsel of Group One Legal. "For example, short-sale servicers now have to make short-sale requirements publically available." Other settlement mandates require that lenders develop a short-sale process that allows homeowners to obtain a short-sale evaluation before putting the home on the market; that banks confirm in writing that a request for a short sale has been received; that the confirmation of receipt shall include information on the banks'/servicers' short-sale process; and that banks must send the homeowner written notice of any missing documents within 30 days.

"We are currently processing a

where the seller will potentially receive a $3,000 relocation assistance incentive, along with a $19,000 HIN incentive - a total of $22,000 at close of escrow. Not a bad outcome!"

"Combining the new, transparency-promoting mandates of this settlement with the benefits and protections of the new California Homeowners' Bill of Rights should bring every homeowner more peace of mind," explains Rendall. "The Bill of Rights identifies four new changes that protect homeowners. First, it prohibits 'dual track' foreclosures - meaning that the lender can no longer proceed with a foreclosure while also reviewing your application for a loan modification and/or short sale. Second, it ensures that homeowners have a single point of contact when negotiating their loan modification. Third, it expands the notice requirements that the lender must provide before they pursue foreclosure or take action on a loan modification. Lastly, it allows injunctions against foreclosure until lender violations are corrected."

Also good news: An additional $7 billion is tabbed for facilitating short sales, offering forbearance and deferment programs and assisting with post-sale relocations. "We believe the National Mortgage Settlement, recent California legislation and other government-promoted incentive programs have put a substantial amount of pressure on banks, investors and servicers to look at the short sale as a viable and proactive alternative to foreclosure," says Rendall.

"Soon after the terms of the National Mortgage Settlement were released to the public," recounts the Group One Legal lawyer, "Bank of America introduced their new and improved Cooperative Short Sale and HIN Incentive Program. This has brought forth a new transparency and efficiency to the Bank of America short sale and has also added increased seller incentives for cooperating and completing a successful short sale. We are currently processing a Bank of America short sale where the seller will potentially receive a $3,000 relocation assistance incentive, along with a $19,000 HIN incentive, totaling approximately $22,000 at close of escrow. Not a bad outcome, especially during a difficult financial time for the seller!"

"Of course, not all circumstances lead to this kind of incentive," explains Rendall, "but many sellers qualify for the standard HAFA-derived $3,000 Seller Relocation Incentive program. Currently, the Bank of America HIN Incentive Program can potentially offer qualifying sellers additional relocation assistance between $5,000 to $30,000 at successful close of escrow. Chase is currently offering a similar incentive program, along with several other servicers. There are times when a seller does not qualify for either a HAFA and/or other form of incentive, but in most situations we still see the short sale as a positive alternative to foreclosure. I would advise all sellers and borrowers who are in a difficult financial position to look at all their options. Sellers and borrowers in default do themselves a severe disservice when they bury their heads in the sand and wait until a foreclosure occurs. Instead, this is the time to proactively seek viable alternatives. We are here to educate and bring knowledge to the homeowner."
The professionals at Group One Legal have closed approximately 200 short sales since 2007 and expect the market to continue to see a substantial amount of succes sful short sales over the next three-year period. To learn more about how to avoid foreclosure or receive relocation funds from your short sale, call Group One Legal today. 702-4651
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