A volunteer group consisting of lawyers set up in Florida to assist foreclosure victims has been booked for trade violations. Events started rolling with a Larry King Live (July 30th show). A woman representing Florida Attorneys Saving Homes came on to the show with a family battling foreclosure. She put forward their case.

This group named FLASH set up a hotline promising legal assistance without charging fees in the first week of June. Since then they have been receiving daily calls numbering 30 to 50. After the show another group using the same name has also started getting calls from borrowers.

This has led to the Federal Alliance for Safe Homes Inc (also known as FLSAH) to accuse the other FLASH comprising of lawyers of infringing trade mark regulations. Recently a demand letter has been sent – this being the first step towards taking legal action.

Kent Spuhler of Florida Legal Services in Tallahassee said, “We’ll continue to try to work things out, but with this demand letter we’re probably headed to court. A single event spurred some misguided calls, but there really isn’t any confusion in the community about this project. It’s catching on like wildfire.”

The Florida Bar, the Florida Bar Foundation joined forces with Legal Forces. Sphulers explained, “We didn’t do a name search beforehand because we were so busy working out the mechanics of it. Then somebody said something about what we were going to call it. Afterwards, we found out about (the alliance’s use of FLASH) but knew it wasn’t a legal problem.”

The group of Tallahassee is a non-profit body seeking to impart education about making homes safe and protecting families in danger from financial pitfalls. In a press release the president of the group, who is also the CEO, Leslie Chapman-Henderson, said that the failure of the group consisting of lawyers to respect the fundamental points about use of trademark is causing the consumers to be confused. Spuhler commented, “We don’t believe we’ve committed any trademark violation. There are about 2,000 organizations that use FLASH in their names.”

Although the names are same the objectives of the two FLASH groups are dissimilar. The alliance body educates the sufferers while the lawher’s body gives legal help. The latter has come forward with many offers of adjustment so as to peacefully co-exist but so far the deadlock has not been resolved.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Group Assisting Foreclosure Victims has been Booked for Trade Violations

With so many foreclosures engulfing Americans the name of bankruptcy is no longer associated with social stigma – rather bankruptcy can be a breather for foreclosure victims. However new restrictions have been placed on it since October 2005 preventing one from filing bankruptcy hastily. The borrower has to undergo credit counseling from certified persons and only after having obtained a certificate to that effect can bankruptcy be opted for.

There are two kinds of bankruptcies for individuals – Chapter 7 and Chapter 13. In Chapter 7 the property of the debtor undergoes absolute liquidation to clear the unsecured loans. In Chapter 13 bankruptcy, a payment schedule is chalked out to clear some or part of the dues.

Chapter 7 can be filed if the borrower’s earnings are less than the state’s median income. This will shelter some assets like cars required to go to place or work, tools used for livelihood and perhaps even the house. It all depends on state laws. All the other assets have to be sold and with the proceeds the debts paid. If the total realized from the sale is less than the due amount then the balance dues get cancelled.

If the income of the borrower is more than the state’s median and one can pay back a minimum of $100 per month (calculations are made by the Internal Revenue System rules and not on personal budget accounting) then one has to file Chapter 13. This will allow the borrower three to five years to clear dues.
Under Chapter 13 one can retain more property but the plan is difficult to execute. According to the American Bar Association out of 3 households, 2 who file Chapter 13 never manage to complete the schedule. Failure will lead to liquidation of everything.

Generally those with few assets, modest or no income and piles of loans, opt for Chapter 7. If one can erase good amount of debt and also be able to run the mortgage payment then there is a slim chance of saving the house.
Chapter 7 is the best alternative for the borrower who is prepared to thrown in the towel on the house – especially if there is the possibility of the lender hitting out with deficiency judgment relating to the difference between the sale price of the house and the loan due.

Under Chapter 13 so long as the borrower keeps to the repayment schedule the lender cannot harass him or her. A point to remember is that bankruptcy destroys credit ratings.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Bankruptcy can be a Breather for Foreclosure Victims

Brad said, “I’m hoping that I qualify under the loan modification so that they will do something to help me lower my payments a little bit. I need to get my payment down to about $900, $1,000 a month. If I don’t get approved for a loan modification, it’s going to be 1-2-3, and my house is gone."

The programme came into effect in March 2009 and it is included in the plans of Obama government to put aright the tottering economy by stabilizing the real estate market. The measure has two sides – modification of loans and refinancing of loans.

In loan modification the lender alters the terms of the current loan mainly by reducing interest rate and or increasing the time period of the loan. The target is to bring about a balance between the income of the borrower and the expenditure on housing loan.

Refinancing involves the clearing of a loan and getting another. Refinancing generally improves the terms of the loan with lower interest rates.

The borrowers are advised by experts and advocates that those who get an approval for loan modification should closely scrutinize the terms of the mortgage to see that this will actually be beneficial and affordable to and for them. Prior to the government programme many have managed to get modification that have turned out to be detrimental. This has led them to default again. The mortgage payments have often increased rather than decreased.

Andrew Loubert of NeighborWorks America said, “Over the last six months, there have been failed modifications where the lender will create a modification that’s convenient to the lender, but makes no sense for the homeowner." He explains that when the borrower is say lagging behind four months in payment the lender wants cash to flow again. So he agrees to modification but tags on the due amount to the fag end of the loan. This causes the principal and thereby the interest to increase without helping the borrower at all. The so-called modification was just a white wash!

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! The Home Affordability Programme to Help Foreclosure Victims

Federal bankruptcy judge Samuel L. Bufford together with former judge R. Glen Ayers has recently written an article pointing out that the Uniform Commercial Code that has been introduced in each state is very vague. The article read, “Enforcement of a note always requires that the person seeking to collect show that it is the holder. A holder is an entity that has acquired the note either as the original payor or transfer by endorsement of order paper or physical possession of bearer paper.”

Dennis Harrington of Southeastern Ohio Legal Services in Marietta said that somebody trying to take foreclosure action without papers is like someone attempting to encash blank cheque. He asked, “If you have a check that’s not made out to you, what gives you the right to go to court and demand that the people pay?”

He and his lawyer colleague Peggy Lee said that SEOL is representing people with low income involved in civil cases. They have been lately seeing a rise in foreclosure suits in which this particular issue is repeatedly coming up. The last few years of insanity in the market has resulted in this mayhem that has ultimately caused the nation to slump into recession.

Another related article in the New York Times highlighted that during the time of the housing boom, millions of mortgages were make into parcels, sliced and sold to investors across the world. These securitized trusts were sold repeatedly causing chaos. Lee says that three out of every four cases she handles raises this point about original papers and documentation to establish the plaintiffs right to sue. At the time of selling and re-selling the mortgages the forms were not properly filled up. The concerned parties were in such a hurry that they neglected this important point. Sometimes even computerized records cannot be shown.

It seems that the banks were so busy making money that they did not give priority to the task of keeping track of the loans that were changing hands.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Banks Are Being Questioned the Right to Sue Foreclosure Victims

Paulson has decided not to buy soured bank assets. This indicates that he has drawn two conclusions regarding the jumbo $700 bailout package.

Firstly it seems he has realized that the plan would not work out properly. Secondly it appears that the financial and economist pundits who were wary about the direct injection of capital into the banking system seems to have been in the right from the very beginning.

Paulson recently announced that the federal government would soon give up the plans of purchasing troubled mortgage-supported securities from the banks and other jumbo investors. It will now concentrate on how to defreeze the credit markets. Only a week after launching the bailout package Paulson has started giving indications that the focus of help had changed. The money would now go to buying preferred shares of the banks to allow for flow of capital. With the replacement of slow IV drip with an adrenaline shot sent direct to the heart, the stock market got a boost for few weeks. The recent announcement is not a surprise but a re-statement of something that has already happened. $60 billion is yet to be spent from the original outlay of $350 billion. So far the purchase of soured assets has not taken off.

This change of course has put USA at par with the measures being taken by Britain and the rest of Europe. Direct re-capitalization of the banks has become the rule here and the response to financial problems.

Concerns are being raised about the inconsistencies of Paulson. The original plan was labeled TARP – Troubled Asset Relief Program. In the maze of all this shifting the humble foreclosure victim is getting lost and forgotten. Campbell R. Harvey of Duke University said, “This was a major piece of legislation. TARP was what people were voting on, and now he announces that TARP is not going to be TARP.” Paulson and also the Congress are now failing to define the goal of TARP. It was targeting the troubled banks in the beginning but now the talk is about both banks and non-banks. The foreclosure issue seems to be lost in a maze of policies.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Paulsons Toxic Plan Not Of Much Use To Foreclosure Victims

According to a survey conducted by Mortgage Bankers Association, one out of every five foreclosures relates to borrowers who are not occupants of the mortgaged house. The study also brought into focus that it is the investors who allow loans to run into default rather than those who have bought houses as their first place of residence. The assumption is that the investor, being a businessperson, does not want to “throw good money after bad”. But a person to whom the house is a home will try desperately to cling to it.

There are also instances of first time investors who have purchased many properties during the housing boom period and are now facing foreclosures on all of them. The lenders too charge high rates for these risky borrowers – even more than the sub-prime rates. Realizing the situation many of these investors just walked away leaving the houses and without contending foreclosures. These moves have affected many families whose only fault was to have rented accommodation from landlords who had defaulted.

The Sheriff arrives with a foreclosure notice and forcefully evicts the occupants. Sometimes damages are demanded. Some foreclosure eviction notices hardly allow the tenants ten days notice to shift. The lenders contend that their job is not to be landlords but to make arrangements for immediate sale of the house. Any delay is costly for them. As such the house must be made vacant. The lenders also argue that the borrowers are now getting 90 days time and it is up to them to warn the tenants well ahead of the pending foreclosure.

With tenants abuse increasing the government is trying to bring in a law that will expect the new owner to extend the existing lease on the mortgaged house for another six months. Some states have already started enforcing similar laws. The tenants can now go to the courts and request for time extension.

Some of the lenders are offering financial help to the tenants to shift if they agree to do so quickly. This is known as the ‘cash for keys’ arrangement. The money involved ranges from $500 to $1,500. It is also expected that the house will be vacated in good condition.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Renters Innocent Victims of Foreclosures

The plan includes government guarantee of the house mortgages. From the $700 billion chalked out for the rescue package, $50 billion will be set aside for this purpose of government guarantees that will cover 3 million mortgages that are threatened by foreclosures. Low interest loans will be offered for a five years. The risk will be that of the government if within that time the value of the mortgage is not recovered.

Sheila Bair, the chairperson of FDIC discussed the plan on 29th October at a conference in Arlington. She did not give any details. She said that what has been developed is “a federal program to help more borrowers avoid foreclosure. …Such a framework is needed to modify loans on a scale large enough to have a major impact.” She added that talks with the Treasury were still going on and that by October 30th the proposal would be disclosed.

However, Jennifer Zuccarelli of the Treasury Department said that this is not totally correct. She said, “We are looking at a number of proposals on foreclosure prevention, but not one proposal has been decided upon.” There could well be friction between the two entities that would require ironing out.

Mandatory relief plan would be the boldest and most effective the government could take to give relief to the foreclosure victims. Six months previously Bair had suggested similar plans but it was hardly given a passing thought. So far the Bush administration has been focusing on voluntary cooperation from the lenders to avoid foreclosures. Critics allege that the 5-year plan backed by $50 billion is not adequate enough even to scratch the surface of the crisis. They want the loans to be modified by the lenders taking into account the repaying ability of the lenders. This loan would be backed by the government so that the lenders did not have to undertake any risk. If the plan were stretched beyond five years then the lenders would have to make too great sacrifices. The conditions of the loans would be related not only to the income of the borrower but the correct valuation of the mortgaged house.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! FDIC And Treasury Department Going Full Speed Ahead To Rescue Foreclosure Victims

Last July, a help scheme was launched that was for those who had gone “upside down”. It meant that the value of the house had become less than the amount of the loan due. By the Housing and Economic Recovery Act of 2008 was born the work out plan of Hope for Homeowners. By it the FHA (Federal Housing Agency) provided insurance so has to help foreclosure victims who were in occupancy of their houses qualify for a long term traditional mortgage with lower interest rate. The modified loan would cover 90% of the current appraised value of the house up to a limit of $550,440. The insurance coverage by FHA would make it possible for the borrower to avail of low interest.

The government initiated this three-year plan with a fund of $300 billion. The scheme is voluntary on the part of the lenders who may refuse to alter the terms of the previous mortgage. There are a good number of lenders who want to modify the loan and thus avoid the hassle of foreclosure. There is also a fear that too much stubbornness might cause the Congress to come down ever more harshly on the lenders.

Hope for Homeowners are for those who mortgages have gone underwater, contracted before January 2008 and have a monthly payment responsibility that is more than 331% of their earnings.

Borrowers should also try their level best to contact respective lenders. However it will be wrong to entertain high hopes about immediate assistance. The programme has only recently been launched and many lenders are still mulling over the process.

On 1st December Countrywide (now under Bank of America) is planning to introduce a “home retention” comprehensive plan to steer foreclosure victims towards Hope for Homeowners rescue scheme or any other similar programme. Those who are in default for over 60 days are advised to call up the lender and open communications for workouts. From 1st December they will be able to move on a fast track regarding new loans.
Filing of bankruptcy will not help in saving the house until the bankruptcy judges are allocated the power to relax the mortgage terms. This is a bone of contention between the two political parties.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Options for Foreclosure Victims

According to police reports, Wanda Dunn, 53, in a planned way packed her bags on the night prior to her death. She left them on the front doorsteps of her neighbour together with instructions about what they should do with the stuff. After that she went to her house in Pasadena that belonged to her grandparents. Then she set it on fire before shooting herself.

Alicia Suarez is a homeless woman who sometimes used to seek shelter in garage of Dunn’s house. Alicia says that it is foreclosure that forced Wanda to take this extreme step. Alicia added, “She was very good friend of mine. Let her rest in peace.”

The friends and neighbours of Wanda said that in all probability this unnatural death was due to foreclosure related financial problems. A revolver was found next to her body. Lt. John Dewar of Pasadena police commented, “It’s very, very sad case, especially in these economic times.”

The last few weeks have been the worst with tumbling real estate prices, economic gloom and increase in foreclosures especially in California. Foreclosures have undoubtedly taken a toll of the mental health of the sufferers. Clinical psychologist Gaithri Fernand of Los Angeles said that people commit suicide when they do not have any hope about help and assistance. In other words they have lost all faith in the world and in themselves. “Helplessness in the face of bad things leads to hopelessness, which leads to suicidal behaviour” she added.

The neighbours were the first ones to see smoke gushing out of Wanda’s house in 1000 block, North Wilson Avenue in the wee hours before 5 am last Monday. Scott Hardin, a neighbour contacted the fire department. Minutes later the fire fighting team arrived but by that time the building was charred and ash was blowing in the wind.

The neighbours recalled Wanda as being ‘pretty’ and ‘reclusive.’ Hardin and Dunn would sometimes exchange greetings with a wave of the hand but they never really chatted. Williard Pugh was another neighbour – one of the few who were considered by Wanda to be a friend. He said, “You could tell that she was very pretty, but she never got dressed up.” Others neighbours too said that Wanda would often wave but she was never close to anybody. Most probably foreclosure eviction notice had made her lose her mental balance.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Foreclosures Claim another Victim

The redemption period of Scott was scheduled to expire on 1st May 2008. In the beginning of the year she came to hear about Hope America a non-profit group based in Ypsilanti that lends a helping hand to those in trouble in Washtenaw County. The help covered a wide range – food, financial advice as well as foreclosure prevention. Hitherto Scott had gone through all the routine of filling up forms and processing the appeal on her own but it had come to naught. But when Hope America stepped in, suddenly the lenders were willing to talk.

Hope America debuted in 2005 and relies entirely on donations. It is a small body with two staff members, a Board of Directors and about 80 volunteers according to the Eleanor Walker, the Executive Director. Hope America organizes financial workshops and distributes food and clothing four times a year. Till 2007 in Washtenaw County 5,700 have benefited from their activities.

In December 2007 the foreclosure issue was included in their itinerary. This was in response to a rising number of foreclosures in the area surrounding Michigan. It offers financial advice and foreclosure prevention classes apart from interacting with individuals for specific support. So far about 50 to 75 foreclosure victims have been helped. They have avoided foreclosure by negotiations with lenders conducted by Hope America on their behalf. Few have lost out but that was because they sought help too late.

Looking Foreclosures?
ForeclosureListings.com has a comprehensive, searchable database of foreclosures in California, Florida, Texas, Michigan and all US States. Try to search foreclosures by state today! Ypsilanti Agency Spells Hope For Foreclosure Victims