Home prices are down! Interest rates are at an all time low!! But can you get a loan?

Home prices are down!  Interest rates are at an all time low!!  But can you get a loan?Mortgage rates have reached all time lows. Unfortunately, the mortgage crisis in American has made it extremely difficult for the average American to qualify for these low interest mortgages.

A number of years ago, during the housing boom, if you were breathing and you walked into a mortgage brokers office, you could walk out with a mortgage. Today, only the most highly qualified perspective homeowners can obtain mortgage financing. Recent data from the Federal Reserve System shows more than 25% of all Americans who apply for mortgage loans are being rejected.

Lawrence Yun, the chief economist for the National Association of Real Estate Brokers, recently stated “good borrowers with one or two blemishes on their credit are being denied credit.”

Statistics regarding credit scores concerning Fannie Mae and Freddie Mac financed loans show the average credit score to qualify for a loan has increased from 720 to 760. For Federal Housing Authority loans the average score has increased from 660 to 700.

Down Payments

Today it is necessary that a perspective mortgage borrower have between 15 and 20% of the total cost of the home to qualify for obtaining a mortgage. It should be noted during the boom year in the real estate market all a prospective borrower needed to buy a home was a down payment of Zero!

About the Author

Elliot Schlissel, Esq. is an attorney who assists clients in real estate related matters. He is a former president of the Commercial Lawyer’s Conference of New York. He currently represents numerous individuals throughout the Metropolitan New York area in a variety of foreclosure defense lawsuits and mortgage modification applications.

Late Mortgage Payments Increase

During the last quarter of 2011, Trans Union credit reporting agency reports more than 6% of all mortgage holders in the United States were behind on their mortgage payments by 60 days or more.  It should be noted prior to the housing crisis that exists in America, the delinquency rate on mortgages was usually in the area of 2%.

Tim Morton, a group Vice President of US Housing in the Trans Union financial services unit, stated “the more encouraging news is when looking year over year the delinquency rate dropped over 6%! At this pace it will take a very long time for mortgage delinquency rates to get back to normal.”

Delinquency rates have been decreasing in Arizona and California.  Florida, which is the state with the highest delinquency rate, has a mortgage delinquency rate of approximately 14.5%!

The recent settlement by the five largest banks concerning mortgage improprieties may result in as many as one million mortgage holders having a reduction in the size of their mortgages.

Stabilization of Home Prices

The key to the real estate crisis in the United States is the stabilization of home prices and the reduction in the unemployment rate in the United States.  As the unemployment rate goes down, more Americans will become employed and the delinquency rates on mortgage payments will go down.  Less homes will be foreclosed upon and there will be stabilization over the long run in the real estate market.

Should You Buy A Foreclosed Property?

In foreclosure situations the bank brings a foreclosure action against a home owner.  Sometimes, after many years, the bank successfully takes title of the home. They evict the family who lived in the home.  There can be significant financial benefits from buying a foreclosed home.  However, there are also a variety of potential drawbacks.

Was The Home Properly Maintained?

If a homeowner was unable to make his or her mortgage payments there is a substantial possibility that the home was not maintained very well.  Homeowners who can’t make mortgage payments don’t improve their homes and often don’t fix things that break.  There is also the possibility that the homeowner, when he was being evicted, engaged in malicious conduct damaging the home.

The following is a list of things you should look for before purchasing a foreclosed home:

  1. Is the home neat and clean? Sometimes bank foreclosed homes have been sitting empty for long periods of time.  No maintenance or cleaning has been done and the houses have fallen into disrepair.
  2. Is the home legal? Sometimes homeowners modify, extend, and change their homes without getting the appropriate approval from their local building departments.  This makes title unmarketable.  In the foreclosure process whether the title is marketable or not does not come up.  However if you buy the home and thereafter you decide to sell it you will be responsible for legalizing the home.  This can involve thousands of dollars of modifications, application fees and legal work.
  3. Has the home lost electricity? If the home was vacant for a long period of time and the electricity was cut off this can have a negative impact on the electrical appliances in the house.
  4. Water damage. If there have been leaks in the home while it was empty it is possible that the home has suffered from water damage.
  5. Low quality upgrades to the house or poorly done repairs. Sometimes the homeowners are short on money, they take short cuts when the upgrade, modify or repair their homes.  The expression “A stitch in time saves nine” may apply in these cases.  These poorly done upgrades or repairs may not last very long.
  6. Overgrown property.  Homeowners who can’t afford to maintain their homes often fail to maintain their yards and lawns.  The property may be overgrown and/or may require extensive landscaping.
  7. Vandals.  Homes that are empty have a higher propensity to be vandalized than homes that are occupied residences.  Vandalism can involve individuals breaking in to homes, breaking windows, damaging walls, and removing pipes in the basement to sell the copper or brass.

Although there are bargains to be had in buying foreclosures, be careful!  You should carefully inspect the home before purchasing it.  It is suggested that, you have an engineer write an engineering report on your home before buying a foreclosure.  The price may be cheap on a foreclosed home but the real question is have you bought a bargain or a money pit!

Twenty Five Million Dollar Mortgage Settlement

The Federal Government has recently settled for 25 million dollars with Bank of America, Wells Fargo, JP Morgan Chase, Citigroup, and Ally Financial with regard to pending litigation concerning their improper activities regarding mortgages.

The cases were initially started in 2010.  Banks were initially found of guilty of signing off on foreclosures without appropriately reviewing them.  The scandal uncovered what has been referred to as robosigning.  Robosigning is where bank officials sign documents without reading them.  Sometimes as many as hundreds of these documents within a day.

Banks Broke The Law

The banks involved in the robosigning scandal broke the law.  As a result of their improper activity thousand of homeowners were evicted from their homes for invalid or nonexistent documentation.

Who Receives the 25 Million?

The exact details with regard to the settlement have not been worked out. However, it is anticipated the money will be allocated as follows:

1.         1.5 billion dollars in cash payments will go to approximately 750,000 qualified homeowners who lost their homes in foreclosure between 2008 and 2011.  This works out to about $2000 per homeowner.

2.         Banks will agree to 17 billion dollars in principle reductions concerning homeowners who have homes that are underwater and are either at risk of default or currently in default on their mortgages.

3.         3 billion dollars will be allocated to homeowners who are currently paying high mortgage raters or have adjustable mortgages.  The adjustable mortgages can be reset to very low interest rates.

4.         The balance of the settlement funds will be utilized for consumer protection programs and to establish reforms with regard to the bank servicing agency.

It is estimated that it will take between eight and ten months to set up a methodology of distributing the funds and establishing who the homeowners are that would have to be compensated.  The settlement will be thereafter put into effect for a period of 36 months.

Federal officials have suggested that the total amount of funds paid by the financial institutions will end up being as high as 39 billion dollars.

This Is Not Enough

Paul Dales, a housing economist recently stated “you are hardly skimming the surface.  It could help some people a lot, individually. But in terms of the big picture, overall economy and housing market, it is really just a drop in the ocean of the problem.  Only the five banks mentioned have agreed to this settlement, while mortgages funded by Fannie Mae and Freddie Mac are exempt.  This cuts more than half of the homeowners from eligibility right off the bat.”

Punishment for Banks

Experts feel that the 25 billion dollars being paid by the financial institutions will not have a significant impact on dealing with the housing crisis in the United States.  While the plan may be flawed, it is a start in the right direction!

Stopping Foreclosure By Filing Bankruptcy

Foreclosure related bankruptcy filing is one of the possible options in dealing with foreclosure problems.  Individuals and spouses can file either Chapter 7 or a Chapter 13 bankruptcies.  The filing of the bankruptcy immediately stops foreclosures from moving forward, stops debt collection practices and stops creditor harassment.  In some circumstances the filing of bankruptcy can eliminate second mortgages.  Call us and we can discuss the types of bankruptcy that are available to you and why filing bankruptcy may be in your interest and other foreclosure defense related options.

Attorneys Who Defend Foreclosures In New York

The Long Island foreclosure defense lawyers at The Law Offices of Schlissel DeCorpo have for more than two decades been representing the families in the courts of Nassau and Suffolk Counties.  The firm helps clients obtain mortgage modifications.  The firm also prepares forensic audits on behalf of clients.  If a foreclosure action is started, the firm submits written answers alleging defenses such as predatory lending, defective foreclosure lawsuits and defective mortgages.  The firm’s attorneys appear in court for settlement conferenceand pressure the financial institutions to give their clients mortgage modifications.

Foreclosure related bankruptcies are another option to deal with foreclosure lawsuits.  Either the filing of a Chapter 7 or a Chapter 13 bankruptcy will bring a foreclosure proceeding to a halt.  Either of these bankruptcies can be utilized to stop foreclosures, stop debt collection, and stop creditor harassment.  Contact the firm for a free consultation.

Mortgage Services Agree to 25 Billion Dollar Settlement For Their Improper Activities Regarding Mortgages

Seven Hundred and Fifty Thousand Americans who lost their homes in foreclosures between 2008 and 2011 will be able to qualify for up to $2000 in reimbursement from a settlement worked out with large financial institutions.

New York Attorney General Eric Schneiderman

New York Attorney General Eric Schneiderman played a key role in working out the settlement with the large financial institutions. However this settlement doesn’t excuse criminal activity on behalf of the mortgage services. Schneiderman has stated that he will keep pursuing his investigation with regard to mortgage abuses.

Schneiderman said “there are huge tax fraud implications to some of the stuff involving mortgages that we went on.” The large financial institutions involved in the settlement are Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial Services.

Too Little Too Late

The $2000 dollars being paid to people who lost their homes is much too little and it is being paid much too late. Schneiderman stated that the settlement is just a down payment. He intends on pursuing interest and further penalties on the financial servicing companies.

Long Island Foreclosure Lawyers

The Long Island foreclosure defense lawyers at The Law Offices of Schlissel DeCorpo have for more than two decades been representing the families in the courts of Nassau and Suffolk Counties. The firm helps clients obtainmortgage modifications. The firm also prepares forensic audits on behalf of clients. If a foreclosure action is started, the firm submits written answers alleging defenses such as predatory lending, defective foreclosure lawsuits and defective mortgages. The firm’s attorneys appear in court for settlement conferenceand pressure the financial institutions to give their clients mortgage modifications.

Foreclosure related bankruptcies are another option to deal with foreclosure lawsuits. Either the filing of a Chapter 7 or a Chapter 13 bankruptcy will bring a foreclosure proceeding to a halt. Either of these bankruptcies can be utilized to stop foreclosures, stop debt collection, and stop creditor harassment. Contact the firm for a free consultation.

Foreclosure and Continuing to Live in the House for Years

Foreclosure And Continuing To Live In The House For YearsThousands of American families have stopped making their mortgage payments, their houses have gone into foreclosure and they’re living in their homes for years without making mortgage payments. Approximately four and a half million American homes are behind on their mortgage payments or have foreclosure actions pending against them. In two-thirds of these cases, the homeowners continue to live in their homes, with their families, without making any payments towards their mortgage. Many of these families have been living in their homes for more than a year and approximately one-third of the families have been living in their homes for more than two years, without making mortgage payments.

Foreclosures Move Slowly Through the Courts

In virtually all fifty states, the courts have been inundated with foreclosure proceedings. At a time of economic turmoil throughout the country, additional judges and resources have generally not been allocated to deal with the foreclosure crisis. This means that cases sit idle in the courts for long periods of time before the foreclosure actions are completed. It is estimated that it takes approximately a little more than a year and a half for the average foreclosure case in the United States to make it’s way through the courts. In the State of New York, in cases handled by my office, it generally takes three to five years for the cases to proceed through the courts.

Evictions After Foreclosure

Even if your home is foreclosed on and eventually sold years later at auction, you can still continue to stay in your home. At the end of a foreclosure sale, should someone buy your home, whether it be the bank or a third party, and they seek to remove you from your residence, they have to bring an eviction proceeding. Eviction proceedings are brought in landlord/tenant courts. These proceedings are separate and distinct from the foreclosure actions. There are additional calendar delays in these eviction proceedings. Most take anywhere from two to four months.

Foreclosure Defense Lawyer

The Law Offices of Schlissel DeCorpo handles foreclosure defense for homeowners. We litigate all aspects of foreclosure proceedings including, but not limited to, defective foreclosure lawsuits,defective mortgages, predatory lending issues, bad faith, and other real estate legal issues. We attend foreclosure court conferencesfor the clients we represent. We also assist our clients in the preparation of mortgage modification applications, as well as deal with mortgage modification programs that are unresponsive to our clients’ needs.

In certain situations, foreclosure related bankruptcies can be utilized to stop foreclosures from moving forward. Upon filing either a Chapter 7 or a Chapter 13 bankruptcy, the bankruptcy court issues an automatic stay that stops the foreclosure lawsuit from moving forward. It should be noted that bankruptcy proceedings are brought in the United States Bankruptcy Court, while foreclosure proceedings are brought in New York State Courts.

For our clients who file bankruptcy, we can sometimes eliminate second mortgages. We also can assist our clients in re-establishing their credit after filing bankruptcy. Should you have questions as to what type of bankruptcy would be appropriate for you or whether there is other alternatives related to foreclosure defense, feel free to contact us. At your initial free consultation, we will discuss all of your foreclosure options. You can reach us at 1-800-344-6431, 516-561-6645 or 718-350-2802. We look forward to seeing you again on our foreclosure blog.

Analyzing Mortgage Applications

How large a mortgage can you afford? The size of a mortgage you can qualify to obtain will determine how much you can spend on purchasing a home. There are a variety of different factors looked at by banks when analyzing mortgage applications.

Debt – to – income Ratios

What is a debt to income ratio? There are two types of debt to income ratios. A front – end debt to income ratio and a back – end debt to income ratio. The front – end and back – end debt to income ratios are utilized by mortgage lenders during the mortgage application process. A front – end debt to income ratio is in reality a housing expense calculation. The theory is how much of an individual’s or family’s gross (pre tax) income can be utilized to make mortgage payments on a monthly basis. This front – end debt to income ratio usually runs between 28% and 33% of an individual’s or family’s income. This means that the financial institution will not approve your mortgage application if your debt to income ratio goes beyond the financial institution’s guide lines. This specifically applies to conventional loans and Federal Housing Authority (FHA) loans.

Back-end Debt to Earnings Ratio

The back – end debt to earning ratio is the percentage of you or your family’s gross (pretax) monthly income that will be utilized for debt service for your financial obligations. Financial obligations include your proposed mortgage, credit card bills, car loans, child support, and all other types of financial indebtedness in this ratio. The back – end debt to income ratio utilized by financial institutions in their mortgage underwriting process is usually between 36% and 40% of your gross monthly income. This means if your proposed new mortgage and other debts are more than 40% of your gross income, you will most likely get turned down for your mortgage application. In situations where there are assets in the bank and very high credit scores, financial institutions have been going as high as 48% on the back – end debt to income ratio.

Before you submit a mortgage application, you should calculate your front – end and back – end debt to earnings income ratios. This will give you a better idea as to whether you will qualify for the mortgage you are applying for.

Foreclosure Defense Lawyers

First you get the loan, then you start making payments to the loan. But what happens if your financial situation changes? If you lose your job, become disabled, are downsized or have other financial problems, you may find yourself in a foreclosure situation. Do not dispair. The Law Offices of Schlissel DeCorpo has been helping families deal with foreclosure problems for the last 45 years.

We provide all aspects of foreclosure defense. We attend foreclosure court conferences on behalf of our clients. We litigate issues such as defective foreclosure lawsuits, predatory lending, defective mortgages and other significant real estate related defenses. We’ve developed an expertise concerning federal laws and foreclosure.

We can also help you deal with foreclosure-related bankruptcy issues. Filing either a Chapter 7 or a Chapter 13 bankruptcy may be necessary to deal with the foreclosure on your home. If you file bankruptcy, you can eliminate second mortgages in some situations, stop foreclosure, stop other debt collections practices and at the end of the bankruptcy, action can be taken to re-establish your credit. Feel free to call us for a consulation. Our phone numbers are 1-800-344-6431, 516-561-6645 or 718-350- 2802. Thank you for visiting our foreclosure defense blog.

Federal Housing Finance Agency to Sue Large Banks

Fannie Mae and Freddie Mac are overseen by the Federal Housing Finance Agency. This agency is moving forward to sue more than a dozen of the largest banks in the country. The banks allegedly misrepresented information concerning mortgage securities they had sold during the course of the housing bubble. The lawsuit seeks several billion dollars in compensation. It is estimated that Fannie Mae and Freddie Mac lost in excess of 30 billion dollars during the real estate bubble.

Attorney General Negotiating Settlement

In addition to this lawsuit, all 50 State Attorney Generals are in the process of negotiating a settlement that deals with the abuses of the large banks, including Bank of America, JP Morgan and Citibank, with regard to the mortgage process. It is anticipated the banks will pay in excess of 20 billion dollars in fines and penalties as a result of the negotiations with the Attorney General.

American International Group (AIG) Lawsuit

American International Group has brought litigation against Country Wide Financial, Bank of America and Merrill Lynch. They claim they misrepresented information concerning mortgage backed securities.

Foreclosure Defense

If you are a victim of the mortgage crisis in America, we can help you. We attend foreclosure court conferences on your behalf. We can submit an answer to your foreclosure proceeding that can include defenses involving defective mortgages, defective foreclosure lawsuits, predatory lending and other real estate related defenses. We are knowledgeable about federal laws and foreclosure. We will provide you at the time of the initial consultation with all of your foreclosure options. These options will include foreclosure related bankruptcies. The filing of either a Chapter 7 or Chapter 13 bankruptcy will stop foreclosures from moving forward. Filing a bankruptcy will alsostop debt collectors and collection lawyers that may be harassing you. There are many bankruptcy myths that are untrue. Bankruptcy will not permanently destroy your credit. We will be able to help you re-establish credit after filing a bankruptcy.

Call us for a free consultation, we can help you. Thank you for visiting our foreclosure blog.

Credit Reports: What You Need to Know

creditForeclosures, bankruptcies, and losses by credit card companies for non-payment of your bills will have an obvious negative impact on your credit score. There are numerous other matters that are taken into consideration by credit agencies concerning credit scores.

Making Minimum Payments on Your Bills

Creditors make a lot of money from consumers who make minimum payments on their credit card bills. However, making minimum payments can have a negative impact on your credit score. Nessa Fedis, the Vice President of The American Bankers Association, states “it suggests you’re under financial stress.” Try to pay more than the minimum amount on your credit card bills. Minimum payments can be interpreted that you’re in financial difficulty.

Co-signing

A friend, family member or child may require you to guarantee their debt. When you co-sign for their debt, their entire debt appears on your credit report. The debt will be considered yours. If the primary obligore under the agreement misses payments or makes late payments, it will have a negative affect on the credit score of the co-signer.

Short Sale of Real Estate

A short sale takes place when the bank agrees to allow the sale of a residence they have a mortgage on for less than the amount due and owing on the mortgage. This causes the financial institution to lose money. This will have a negative impact on your credit score. You should negotiate with the lender prior to the short sale. It is important you request that the lender not report that you paid less than the balance due and owing to the credit agency. If they report to the credit agency that you paid less than the balance due on the note and mortgage, it will have a significant negative impact on your credit score.

Numerous Inquires

When you apply for credit with a lender or other institution, an inquiry is made against your credit report. When the credit agency sees numerous inquiries, your credit score is impacted in a negative manner.

Having good credit is important if you seek to buy a house, obtain credit cards, lease a car or engage in other financial transactions.

foreForeclosure and Bankruptcy

Foreclosure and bankruptcy have a significant negative impact on credit scoring. Bankruptcy can act as an escape valve to prevent the loss of a home, stop foreclosure, eliminate a second mortgage and stop debt collection harassment. Your credit can be re-established after filing either a Chapter 7 or a Chapter 13 bankruptcy One bankruptcy myth is that you will never receive credit again after filing bankruptcy. This is simply untrue.

Should you have questions or issues concerning your financial situation or are considering filing for bankruptcy, feel free to call the Law Offices of Schlissel DeCorpo. We’ve been helping our clients for more than 45 years deal with foreclosure defense and bankruptcy matters. We can be reached at 1-80–344-6431, 516-561-6645 or 718-350- 2802.

Home Builders Assessment of Real Estate Industry is Full of Gloom

The real estate industry in the United States is doing poorly. Home builders are pessimistic with regard to the housing market in the United States. The National Association of Home Builders has recently put out an announcement that the sentiment among home builders in August of 2011 is extremely negative.

In 2011, the number of new homes built in the United States fell to its lowest level since records were maintained. Home builders cannot compete with the glut of foreclosed homes on the real estate market. It is less expensive to buy a home that was taken over by a bank in foreclosure than to build a new home. Homeowners who want to sell their existing homes and buy a new home cannot find buyers for their existing homes.

Although the sale of newly built homes is a very small portion of the real estate market, it has an significant impact in the economy in local areas. Three jobs are created for each new home being built for a period of one year. In addition, each new home built generates approximately $100,000 in real estate taxes.

Dave Crowe, an economist working with the National Association of Home Builders stated that the weakening of the U.S. economy, coupled with the high unemployment, is having a devastating effect on the marketplace for new home purchasers. The record low interest rates have not been enough to simulate the market place for the building of new homes.

Foreclosure Defense Lawyers

We can keep you and your family in your home. We provide foreclosure defense and bankruptcy legal representation for our clients. We attend foreclosure court conferencesfor our clients. We litigate foreclosure proceedings in the courts throughout the Metropolitan New York area. We are knowledgeable concerning real estate related defenses, in foreclosure proceedings and the federal laws that deal with foreclosure.

We can also assist our clients in foreclosure related bankruptcies. We file Chapter 7 andChapter 13 bankruptcies for our clients. At our initial consultation, we will discuss various types of foreclosure defenses and the types of bankruptcies that may be available to you. We can stop foreclosure and debt collection activities by filing bankruptcy on your behalf. There are also numerous bankruptcy myths, such as you will never receive credit again, that are untrue. We will be happy to meet with you and discuss issues involving foreclosure, bankruptcy, re-establishing credit and staying in your home. Call us for a free consultation. Thank you for visiting our foreclosure blog.

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

We represent individuals throughout the New York Metropolitan area with divorce and child custody, personal injury, car accident, wrongful death, estate administration, nursing home and medicaid issues

The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your particular legal issue. This is attorney advertising.

This is attorney advertising. This website is designed for general information purposes only. The information presented on this website shall not be construed to be legal advice. If you have a legal problem you should consult with an attorney.

Copyright © 2018 By The Law Offices of Schlissel DeCorpo. All Rights Reserved.