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Are you eligible to make your loan disappeared?

Bank of America Notifies Eligible Mortgage Customers of Second Lien Mortgage Debt Extinguishment

Friday, September 28, 2012 4:20 pm EDT
from Bank of America website

As part of Bank of America’s ongoing efforts to help customers in need of mortgage assistance, this company is in the process of mailing approximately 150,000 letters to pre-qualified homeowners offering automatic extinguishment of their second lien mortgages. The intention of the program is to place homeowners in an improved financial situation by reducing their monthly debt obligations and, potentially, help them create equity in their property.

The full forgiveness of second lien balances on eligible loans is being extended under Bank of America’s participation in the 2012 national mortgage settlement among the five largest mortgage servicers, 49 state attorneys general and the federal government.

Letters that began mailing in July 2012 and continue through the end of this year inform predetermined eligible homeowners that the full balance of their Bank of America-owned and -serviced second lien mortgage will be forgiven and the bank’s lien on the collateral property will be released free and clear, unless the customer opts out of this relief offer within 30 days of receiving the letter.

Amada's Comments[Amada's Comment]
Hummm… really?!? Are they the good guys now?? Let’s read on…

Questions and Answers

1. What is the second lien mortgage elimination offer?

We are offering eligible customers who are behind on their home loan payments the opportunity to have their remaining second lien mortgage debt eliminated. With this offer, the full unpaid principal balance on the second lien mortgage will be eliminated.

Amada's Comments[Amada's Comment]
So what BOA saying is if you have a second mortgage with them, they will make that loan disappeared and you don’t have to pay!!!!??? OK, the key words here are “eligible customers” and “behind”. Who is eligible? Are you eligible? On Question 3, BOA explained who is eligible without telling how (is one of those official only information). And the other key word is “behind”, if you are not behind on your mortgage, now you go behind that disqualified line. In the other word, you have to qualified at BOA’s provision and go through their loops and hoops.

2. Why is Bank of America doing this?

These offers are part of Bank of America’s ongoing efforts to help customers in need of mortgage assistance and are among the customer relief programs we have launched under the national settlement agreement between the five largest mortgage servicers, state attorneys general and the federal government. The goal is to help customers remain in their homes and avoid foreclosure whenever possible. By eliminating this debt for eligible customers, we are trying to help them get back on track financially with their first mortgage payments and return to sustainable homeownership.

Amada's Comments[Amada's Comment]
WHY?? That’s a good question. It’s part of a $25 billion court settlement due to the big 5 banks’ “questionable” practices on many troubled homeowners that are facing foreclosure. Basically the Federal court slapped their hands and said you cannot steal the whole thing coz people are starting to notice. Though them a bone back and next time do it while nobody is watching.

3. Who is eligible for the offer?

To qualify, customers must currently have a second lien mortgage owned and serviced by Bank of America that meets certain threshold delinquency or property value criteria, or a second lien mortgage associated with a first lien mortgage that is severely delinquent. Only second lien mortgages owned and serviced by Bank of America are eligible for this extinguishment program. It does not matter who owns and services the first lien mortgage. The vast majority of the second lien mortgages eligible for this program are in default in their subordinate lien position. A small number of second lien mortgages that are paid current will be extinguished if they are associated with a first lien mortgage that meets the program criteria.

Amada's Comments [Amada's Comment]
The New York Times reported on an article How to Erase Debt that Isn’t there explained those who “Eligible” don’t even have the debt anymore. And it said “a small number of second lien mortgages are paid current will be extinguished …. meets the program criteria.” Part of this criteria is the borrowers had begged and begged the banks to work out something for them but the bank didn’t.

4. How are you contacting eligible customers?

Eligible customers will receive letters from Bank of America via Federal Express or certified mail, explaining the offer to have their second lien mortgage debt eliminated. Mailings began in late July. At this time, only customers receiving letters will be eligible for the program.

Amada's Comments[Amada's Comment]
Sorry for those eligible customers now may be obligated to deal with the IRS due to the debt forgiveness program.

5. Do customers have to accept the offer?

We will eliminate the remaining second lien mortgage debt for eligible customers, unless they contact the bank to decline the offer within 30 days of receiving the offer letter. Customers are asked to contact a Bank of America Home Loans representative at 1.800.496.7831 if they have questions or wish to decline the offer.

Amada's Comments[Amada's Comment]
For those who may still have choice – make the best choice for yourself. But some of these people might have moved away and this letter would never reach them, yup, they are now stuck with the IRS issue.

6. Are customers who are not contacted by the bank eligible for this program?

We will be contacting customers who are eligible to have their second lien mortgage debt eliminated. Customers cannot request to be part of the program.

7. How will second lien mortgage elimination impact the first mortgage?

The elimination of the second lien mortgage is completely separate from any actions being taken regarding the first mortgage. If the first mortgage is in foreclosure, those foreclosure activities may continue.

8. What happens if the customer is in foreclosure?

Although the second lien mortgage balance is being forgiven and the lien on this second mortgage is being extinguished, this action does not extinguish the customer’s first mortgage. If a customer’s first lien mortgage is impacted and in foreclosure, this will not stop the foreclosure proceedings; foreclosure activities are likely to continue. Customers should continue to answer and reply to all foreclosure communications from their first lien lender. If customers do not understand the legal consequences of the foreclosure, we encourage them to contact an attorney or housing counselor for assistance.

9. What are the tax implications of the forgiveness?

Bank of America may be required to report the amount of the eliminated second lien mortgage debt to the Internal Revenue Service. Current federal law provides for certain exceptions to tax liability when debt is forgiven in connection with a foreclosure prevention transaction for some customers; however, debt elimination may trigger state and federal income tax liabilities for customers. To understand whether they qualify for one of these exceptions and what other tax implications this transaction may have, we urge customers to contact a tax professional. Additional information on mortgage debt forgiveness can be found at www.irs.gov.

Amada's Comments[Amada's Comment]
Circle back to earlier issue of the IRS.

10. How does this affect Bank of America’s implementation of the terms of the agreement?

The program is consistent with the provisions of the agreement for second lien mortgage debt forgiveness.

11. Are there other ways that customers can have their second lien mortgage debt eliminated?

Additional government-sponsored and proprietary Bank of America programs are available which may involve the partial or full elimination of second lien loans. Interested customers should call 1.800.669.6607 or visit http://homeloanhelp.bankofamerica.com/en/home-equity-modification.html.

12. For a home mortgage loan, what is the difference between principal reduction or forgiveness and lien elimination?

If a lender forgives a portion of a home loan’s principal balance, the borrower is responsible for the remaining balance due and the lender retains its lien on the borrower’s property as collateral for the loan. In a lien elimination, the entire balance of a mortgage loan is reduced to zero, the lien securing the loan is released and the mortgage note is cancelled. The lender has no further claim to the borrower’s property as collateral, and no further monetary claims against the customer.

13. Will a customer benefit if their second lien mortgage debt has been discharged in a bankruptcy filing?

Yes. While customers who have filed for bankruptcy and receive a discharge of their second lien mortgage debt obligations are no longer personally liable for the debt, the bank still remains a lien holder to the extent of the remaining balance on the second lien. This means the bank still has a legal claim to the customer’s property as collateral to satisfy the second lien mortgage debt still owed through a court-approved foreclosure, or if the property is sold for a gain. Once the debt is cancelled and the lien extinguished or released (subject to court approval, if required), the bank relinquishes any further monetary or collateral claim to the property. This reduces the debt attached to the property and may provide the opportunity for the borrower to build equity in their home. Because the underlying personal obligation for the debt was discharged in bankruptcy, the bank will not report debt forgiveness to the IRS as a result of this transaction.

14. Will this affect the customer’s credit rating?

Through the extinguishment program, we will report to the major credit bureaus that the customer’s second lien mortgage is now “paid and closed” and has a zero balance, which could affect a customer’s credit rating. A credit score is determined by the customer’s credit history and is not controlled by Bank of America. Customers should review information on credit scores at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm.

15. If the lien is extinguished in a bankruptcy filing, what are the credit reporting implications?

In the event debt is discharged through bankruptcy, the credit bureaus normally reflect that event as a loan or a debt discharge in a bankruptcy filing. Through the extinguishment program, we will report to the credit bureaus that the customer’s second lien mortgage is now “paid and closed” and has a zero balance.

16. How will Bank of America help customers who are still in need of assistance following the elimination of their second lien mortgage with the bank?

We want to work with customers to address their financial needs, especially if they are in need of assistance. Customers can always visit one of the 50 Customer Assistance centers in cities around the country or call 1.800.669.6607 or visit http://homeloanhelp.bankofamerica.com/en/home-equity-modification.html to find out about available programs.

Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 56 million consumer and small business relationships with approximately 5,600 retail banking offices and approximately 16,200 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

FHA Waives 3 Years Wait Time for Short Sellers..

This may help a few of ‘Short Sale Sellers’ who  have already “short sold”  their homes…or it can  make a big difference to future Short Sellers who are considering a “short sale”.

FHA has financing for homeowners who are short selling their home and wants to repurchase another home after the short sale is approved and completed thru their current lender.

There are a number of home owners who  will qualify for this program by meeting the “extenuating circumstances” criteria.

In other words…there  will be “life (home ownership) after foreclosure” following their short sale”.

The caveats are:

1) They must be current on their mortgage and all other credit obligations for the 12 months prior to the actual short sale completion date.

Editor Note: Contrary to popular belief ..a “short sale” in and by itself  is a not a credit score killer! The damage to a borrower’s credit score by the  number of lates incurred during the “ramp up” to the short sale.

Also note…there is absolutely no discernible difference between a “short sale” and a “foreclosure action” (or loan mod for that matter) in the eyes ofan underwriter.

 

FHA/Fannie/ Freddie see all 3 events listed below as equally negative to each other ….thus triggering the  3 year “wait time”:

 

a) Loan modifications

b) Short sales and deed -in-lieu

c) Foreclosures

2)  Home owners must document “hardship” as defined by:

a) Job loss and subsequent job transfer/ relocation… (a new stream of income will be needed to qualify for the new loan).

 

b) Catastrophic medical bills (and/ or possible death) incurred by a member of the borrower’s “nuclear family” (i.e. co signer of the current mortgage..child…spouse..or other dependent as listed on the borrower’s tax returns).

 

3) They must be downsizing  and relocating. Buying a bigger home across the home will not fly.

4) Their current lender(s)  must be willing to approve the short sale of their current residence.

5) Their credit scores need to be above 620 and any outstanding collections (usually medical bills) need to be paid THRU ESCROW (ONLY)  at COE.

Lenders Tighten Rules on Self Employed Borrowers

Real Estate Blog : Investment Property : Los Angeles : Manhattan Beach : Hermosa Beach : Redondo Beach : Palos Verdes : Torrance

Real Estate Blog : Residential Commercial Income Investment Property

The ever changing lending rules is different by the hours (OK, I am kidding) but by the weeks is pretty close.

One of the latest is Fannie Mae will tighten the guidelines for self employed borrowers on October 27 2012. How Tight?? We don’t know yet.

But the current guideline is pretty favorable since only 1 year Tax Return is required with 20% down.

  • Only 1 year Tax Return Required
  • for Self Employed Borrowers…
  • 20% Down …Conventional Financing
  • Refi or Purchase OK!
  • Loans up to $625,000
  • 620+ FICO scores

If you are a Self-Employed person looking into buying or refinancing your home, contact your loan agent for the latest before more changes are coming.

Bidding Wars are BACK in some areas.

California Home Price is stabilizing….

Interest rate is all time low….

Buyers’ Confidences are back….

Home Inventory is low….

That Means = Bidding Wars are BACK in some areas.

If you are planning or thinking of selling, it’s not a bad time to do so.

Bidding War is Back

What is HAFA?

HAFA Explained in video!
How HAFA (Home Affordable Foreclosure Alternative) program can help home owners on a tough foreclosure situation.

Real Estate Blog : Investment Property : Los Angeles : Manhattan Beach : Hermosa Beach : Redondo Beach : Palos Verdes : Torrance

Real Estate Blog : Residential Commercial Income Investment Property

Rich Woman : Hong Kong wife wins $154 million divorce settlement

Real Estate Blog : Investment Property : Los Angeles : Manhattan Beach : Hermosa Beach : Redondo Beach : Palos Verdes : Torrance

Real Estate Blog : Residential Commercial Income Investment Property


Hong Kong (CNN) — A Hong Kong judge ordered a wealthy real estate mogul to pay his former wife $154 million in one of the city’s largest divorce settlements.
The divorce award translates to HK $1.2 billion and dwarfs famous settlements in other countries.
In comparison, Paul McCartney was ordered to pay Heather Mills almost $50 million three years ago.
Court documents released Thursday detailed a breakdown of the ruling.
It includes a home in the city worth HK $250 million, a London residence valued at HK $30.5 million and HK $2.5 million to buy two cars.
Samathur Li Kin-kan and his wife, Florence Tsang Chiu-wing, married in 2000 and separated in 2008, according to court documents.
They lived a lifestyle “best described as just below that of a US- dollar billionaire,” court documents said.
The wife told local media she was “delighted” as she left the courtroom smiling.
CNN’s Judy Kwon contributed to this report.

San Pedro bluff is disappearing slowly sliding into the sea

San Pedro bluff is disappearing slowly sliding into the sea. While the IRS do not consider ‘Land’ to be a depreciative item in their book, but not in this case. When nature decided to ‘foreclosure’ and taking the land back, we can only do so much to fight against it. I had seen similar case in another part of California along Highway 1 in Pacifica (Nor Cal). It quite a scene. There is/was a sizable apartment building hanging on the cliff, some residents’ balcony is overhanging straight over the Pacific Ocean. Very scary sight and many residents in that apartment complex were evacuated.

In this case in San Pedro, many coastal residents are also worried the coastline is getting to close and make their land disappeared.

Click to Read Full Article:
http://www.latimes.com/news/local/la-me-san-pedro-slide-20111102,0,3671163.story?track=icymi

Are the Federal Reserve and Its Primary Dealer Banks Manipulating the Stock Market?

The Federal Reserve is rotten to the core.

Real Estate Blog : Investment Property : Los Angeles : Manhattan Beach : Hermosa Beach : Redondo Beach : Palos Verdes : Torrance

Real Estate Blog : Residential Commercial Income Investment Property

If the Federal Reserve don’t even have to report to Congress, the President, or any Government entity, why would the Fed report to us!!! They are GOD on their own, and ‘Friends’ with Wall Street and the Super Riches. Of coz they need to take care of their own at the Taxpayers expense. So the answer to the Title Question is YES!

Read Full Article by Gary D. Barnett
via Are the Federal Reserve and Its Primary Dealer Banks Manipulating the Stock Market? by Gary D. Barnett.

IMproved HARP Refinance Program Expanded

HARP Refinance Program Expanded

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

The basic eligibility requirements for an enhanced HARP loan are as follows:

  1. Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
  2. Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
  3. Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
  4. Current loan-to-value (LTV) ratio must be more than 80%.
  5. Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.
  6. More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.
Amada’s Comment:
This could help many home owners staying at their home.

Bill would encourage foreigners to buy U.S. homes

A house in San Marino, where median home prices have risen -- largely because of Asian home buyers and investors -- even as real estate values in the region have declined. (Gary Friedman, Los Angeles Times / January 27, 2011)

Article from L.A. Time. This could be a help of our depressed market. Somebody is ought to pump some real money into this economy, not the artificial money from Bernanke.

By Jim Puzzanghera and Lauren Beale, Los Angeles Times
October 20, 2011, 7:00 p.m.

Reporting from Washington and Los Angeles— American consumers and the federal government haven’t been able to bail out the sinking U.S. real estate market. Now wealthy Chinese, Canadians and other foreign buyers could get their chance.

Two U.S. senators have introduced a bill that would allow foreigners who spend at least $500,000 on residential property to obtain visas allowing them to live in the United States.

The plan could be a boon to California, which has become a popular real estate market for foreigners, particularly those from China.

Nationwide, residential sales to foreigners and recent immigrants totaled $82 billion in the 12-month period ended March 31, up from $66 billion the previous year, according to the National Assn. of Realtors. California accounted for 12% of those sales, second only to Florida.

“Overall, Los Angeles is the perfect place for investors,” said YanYan Zhang, an agent with Rodeo Realty in Beverly Hills, who travels to China several times a year to meet potential clients.

Sandra Miller, a broker at Engel & Volkers in Santa Monica, an international real estate firm that caters to foreign clients, said about 10% of the luxury market now is composed of foreign investors. She estimated that offering them U.S. visas would triple that figure, as well as help sales elsewhere.

“California, Florida, New York, Colorado, Hawaii and Texas — those states will see a huge increase in demand,” she said. “The whole Westside would certainly benefit.”

The bipartisan proposal, part of a package that also would make it easier for international tourists to visit the U.S., is similar to an existing program that puts foreigners on a fast track to a green card if they invest at least $500,000 in an American business that creates at least 10 jobs.

“Many people want to come and live in the United States,” said Sen. Charles Schumer (D-N.Y.), who introduced the legislation Thursday along with Sen. Mike Lee (R-Utah). “They will be here spending money and paying taxes, and the most important thing is they’ll sop up the extra supply of homes we have right now compared to demand, and that’s what’s dragging our economy down.”

The legislation would create a new homeowner visa that would be renewable every three years, but the proposal would not put them on a path to citizenship. To be eligible, a person would have to buy a primary residence of at least $250,000 and spend a total of $500,000 on residential real estate. The other properties could be rented.

The program would come with several restrictions.

The purchase would have to be in cash, with no mortgage or home equity loan allowed. And the property would have to be bought for more than its most recent appraised value, Schumer said.

The buyer would have to live in the home for at least 180 days each year, which would require paying U.S. income taxes on any foreign earnings. Buyers would no longer be eligible for the temporary visa if the property were sold.

The buyer would be able to bring a spouse and minor children to live in the U.S. but would need to apply for a work visa to hold a job. Neither the buyer nor dependents would be eligible to receive Medicaid, Medicare or Social Security benefits.

“The bill does not limit people from being productive,” Schumer said. “It simply prevents them from coming here and taking jobs that otherwise would go to Americans.”

Billionaire investor Warren Buffett and others have advocated boosting the U.S. economy by attracting foreign investment.

The Visa Improvements to Stimulate International Tourism to the United States of America Act, or VISIT-USA Act, aims to do that by also making several other changes to visa policies.

Among them are allowing Chinese tourists to receive a five-year visa that permits multiple visits. They now must apply for a new visa every year. Canadians would be allowed to stay in the U.S. for more than 180 days without having to obtain a visa.

Schumer and Lee have lined up support from the U.S. Chamber of Commerce, the U.S. Travel Assn. and the American Hotel & Lodging Assn. Schumer said he was working to get the backing of the Obama administration, which received the bill’s details Thursday.

“For too long, we have created barriers, and too many hoops and hurdles, which act to deter visitors from other countries coming to the United States to spend their money and create jobs,” said Chamber of Commerce President Thomas Donohue. “This is a loss we can ill afford in today’s economy.”

Robert Toll, executive chairman of Toll Brothers Inc., a Pennsylvania builder of luxury homes, joined Schumer on a conference call with reporters to back the foreign home-buyer proposal. He said it was no different from tax breaks designed to attract businesses.

Lee described it as a free-market way to boost demand in the real estate market after “big-government programs have failed to work.”

jim....@latimes.com

laur...@latimes.com
Copyright © 2011, Los Angeles Times