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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. Avoid Losing Your Home.

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Avoid Losing Your Home

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  1. 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. AvoidLosing Your Home

  2. Seminar: America’s Housing CrisisHow to Avoid Losing Your Home Peter Spino, Jr. Senior Foreclosure Prevention Counselor Community Housing Innovations, Inc. Brooklyn Law School, JD 1996 Admitted in New York & Massachusetts

  3. CONGRATULATIONS! OVERCOMING FEAR IS YOUR GREATEST OBSTACLE. BY COMING HERE, YOU HAVE DONE THAT. IT IS ONLY GOING TO GET EASIER.

  4. What the Federal Government is doing… Prior to President Obama’s recent “MAKING HOME AFFORDABLE PROGRAM,” there were a few lender and legislative attempts to help with the Foreclosure Crisis, but they provided limited value to borrowers.

  5. Crisis Continues to Grow 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.

  6. N.Y.S. Action: Residential Foreclosure Program 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 fund • New requirement that lenders meet with borrowers facing default Source: 6/20/08 www.lohud.com,“Fixing Mortgages” A Journal News Editorial

  7. What is foreclosure in NYS? FORECLOSURE TIMELINE BORROWER DELINQUENT - 2 to 3 months late with mortgage Payments; 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 balance becomes due. FORECLOSURE CASE INITIATED – Lender files a Lis Pendens, Summons and Complaint with court.

  8. 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. 8

  9. 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. 9

  10. FORECLOSURE DEFENSE Litigation 10

  11. Defenses to Foreclosure Predatory Lending Loan Fraud Standing and Capacity to Sue Affirmative Allegation of Ownership 11

  12. Defenses to Foreclosure Banking Law Sec. 6-1 and 6-M NY General Business Law Sec. 349 (Deceptive Practices Act) Truth in Lending Violations RESPA Violations 12

  13. Predatory Lending A loan based upon the appraised value of the property without regard to ability of the borrower to repay. 13

  14. Loan Fraud Bank or Broker misrepresents income to the lender Bank’s appraiser overvalues property Negligent Underwriting No Due Diligence 14

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  16. Ways of Perpetrating Loan Fraud 17

  17. Ways of Perpetrating Loan Fraud:When projected payment schedule is wrong because actual payments due are higher. 18

  18. Goals of the Foreclosure Defense 19

  19. Goalsof Foreclosure Defense • Obtain damages • Delay the foreclosure for an extended period of time • Better bargaining position for re-negotiation of the loan, including possible reduction of the principal amount. 20

  20. Advocacy: “The mortgage crisis could have been alleviated by the involvement of more lawyers.” -Michael Schill, Dean, UCLA School of Law Source:The Wall Street JournalJune 18, 2008

  21. 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

  22. What You Can Do OPEN THE LETTERS. THEY DO NOT BITE. CALL OR WRITE TO YOUR LENDER’S (BANK’S) LOSS MITIGATION DEPARTMENT IMMEDIATELY.

  23. 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. Forbearance

  24. 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 Sale

  25. Short Refinance 26 Similar to a short sale but the lender allows borrower to obtain a refinance at 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.

  26. DEED IN LIEU OF FORECLOSURE 27 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.

  27. 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

  28. Loan Modification 29 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.

  29. 30 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

  30. www.makinghomeaffordable.gov 31 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.

  31. Loan Modification 32 REQUIRED DOCUMENTS FOR LOAN MODIFICATION One month of paystubs Two months of bank statements Hardship Letter Financial Statement W2 and/or tax return

  32. Thank you all for coming. 32 PLEASE ASK QUESTIONS AND TAKE DOWN MY NUMBER Peter Spino 914-595-0980

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