Default Mortgage For Caar Lunch n' Learn 11 18 08

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Foreclosure/Default mortgage presentation at Charlottesville Area Association of Realtors' -

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  • Default Mortgage For Caar Lunch n' Learn 11 18 08

    1. 1. Lunch N’ Learn @ CAAR Mortgage Default/Delinquency-What Realtors need to Know Facilitated by Piedmont Housing Alliance SunTrust Mortgage December 4, 2008 12-2pm
    2. 2. Overview <ul><ul><ul><li>PHA and Housing Counseling </li></ul></ul></ul><ul><ul><ul><li>Counselor’s Role </li></ul></ul></ul><ul><ul><ul><li>Realtor’s Role </li></ul></ul></ul><ul><ul><ul><li>Alternatives for Homeowners </li></ul></ul></ul><ul><ul><ul><li>Understanding the Processes: Short Term Repayment Plan, Forbearance, Deed in Lieu, Loan Modification, Pre-foreclosure Sale/Short Sales, Foreclosure, Bankruptcy, Reverse Mortgage </li></ul></ul></ul>
    3. 3. Cont’d <ul><ul><ul><li>Government Role: Understanding the H4H, FHA Secure, Hope Now programs </li></ul></ul></ul><ul><ul><ul><li>Scams Running Rampant </li></ul></ul></ul><ul><ul><ul><li>Planning a Move! </li></ul></ul></ul><ul><ul><ul><li>Recap-How Realtors, Lenders and Counselors work together </li></ul></ul></ul>
    4. 4. PHA and Housing Counseling <ul><li>Mission: </li></ul><ul><li>Piedmont Housing Alliance is a regional nonprofit organization that creates housing and community development opportunities for very low to moderate income families and individuals, teaches financial literacy and management, homebuying and homeownership skills, and advocates for affordable housing policies and programs. </li></ul><ul><li>Partners: SunTrust, HUD, Wachovia, BOA, City of Charlottesville, Albemarle County, FHLB, VHDA, Legal Aid Justice Center, CACF & CAAR, and a host of community organizations. </li></ul>
    5. 5. Programs and Services <ul><li>First time Homebuyer, VIDA, Rentals, Fair Housing Education, Default/Delinquent Foreclosure and Reverse Mortgage Counseling </li></ul>
    6. 6. Housing Counselor’s Role <ul><li>To help the client understand and manage challenges and choices. To EDUCATE, not advise. </li></ul><ul><li>Ref: VAHC Manual pg. iii-2006 </li></ul>
    7. 7. Realtor’s Role <ul><li>Resource of information </li></ul><ul><li>Support & Guidance </li></ul><ul><li>Know the process & timelines </li></ul>
    8. 8. Virginia Foreclosure Timeframes <ul><li>*handout </li></ul>
    9. 9. Counselor’s Process <ul><li>Intake* </li></ul><ul><li>Is it Curable or Un-curable?* </li></ul>
    10. 10. Be Aware! <ul><li>Recognize the stress that you are experiencing. </li></ul><ul><li>Recognize the signs of clients stress. </li></ul><ul><li>Recognize the stress the lender is under </li></ul><ul><li>Don’t be afraid to ask questions and seek help yourself </li></ul>
    11. 11. Alternatives/Options for Homeowners <ul><li>Short term Repayment Plan </li></ul><ul><li>Forbearance </li></ul><ul><li>Deed in lieu </li></ul><ul><li>Loan Modification </li></ul><ul><li>Pre-foreclosure sale </li></ul><ul><li>Foreclosure </li></ul><ul><li>Bankruptcy </li></ul><ul><li>Reverse Mortgage </li></ul>
    12. 12. Short Term Repayment Plan <ul><li>Lenders will try to set up repayment plan first </li></ul><ul><li>Negotiated by the collections dept. </li></ul><ul><li>Collections have limits on how long they set up the repayment plan </li></ul><ul><li>Usually 90-120 days </li></ul>
    13. 13. Forbearance <ul><li>Definition: agreement to suspend or reduce regular monthly payments for a period of time </li></ul><ul><li>At the end of the forbearance a lump sum of the pass due amount is due. </li></ul><ul><li>Basic documents that lender needs: client needs to write a hardship letter, provide proof of household income, spending plan/budget </li></ul><ul><li>Lender must approve </li></ul>
    14. 14. Deed in Lieu <ul><li>Definition: the homeowner voluntary conveys the title to the lender in exchange for the discharge of the debt </li></ul><ul><li>Basic documents that lender needs: client needs to write a hardship letter, provide proof of household income, spending plan/budget, listing contract-house listed on the market for at least 90 days, CMA and justification summary </li></ul><ul><li>Lender must approve-will not do if there is a 2 nd or 3 rd mortgage on the property </li></ul>
    15. 15. Loan Modification <ul><li>Definition: any changes to the original terms of the loan, could be rate, payment amount, or maturity date. </li></ul><ul><li>Usually the loan must be at least 1yr old, owner wants to keep their house, has stable income to support the new payments, must be in writing. </li></ul><ul><li>Documents needed: hardship letter, proof of income, revised spending plan/budget, certificate of Housing Counseling </li></ul><ul><li>Lender approval </li></ul>
    16. 16. Pre-Foreclosure Sale/Short Sales <ul><li>Definition: sale of the property for less than amount due on mortgage </li></ul><ul><li>Lender might allow the time to sell </li></ul><ul><li>Must have property listed </li></ul><ul><li>Basic documents that lender needs: client needs to write a hardship letter, provide proof of household income, spending plan/budget, listing contract-house listed on the market, CMA and justification summary* </li></ul><ul><li>Less impact on credit report </li></ul><ul><li>Lender must approve and basically tells the 2 nd mortgage holder how much they will give them </li></ul>
    17. 17. Foreclosure <ul><li>Lender auctions the house for sale, usually at local court house </li></ul><ul><li>Government loans-owners can apply to stay after HUD takes back procession, usually up to 6 mos. But has to complete a form 20 days prior to the auction date. </li></ul><ul><li>If house sells-typically the owner has 30-60 days and can request an extension. </li></ul>
    18. 18. Bankruptcy-Chapter 7 and 13 <ul><li>Legal action to temporarily stop collection on all of the borrower’s debts </li></ul><ul><li>Damages the individuals credit rating </li></ul><ul><li>13-allows the homeowners to reorganize their debts and pay it back according to a payment plan developed by the courts </li></ul><ul><li>7-homeowner is allowed to discharge all debts </li></ul><ul><li>Does not protect the homeowner, only stalls for time </li></ul><ul><li>Referral to Bankruptcy Attorney </li></ul>
    19. 19. Reverse Mortgage <ul><li>62 and older </li></ul><ul><li>Owner of the home </li></ul><ul><li>Owner does not owe any federal debt </li></ul><ul><li>Must seek and complete counseling by a HUD approved Housing Counseling Agency (Piedmont Housing Alliance) </li></ul>
    20. 20. Government Options <ul><li>FHA Secure </li></ul><ul><li>Hope for Homeowners (H4H)-HUD </li></ul><ul><li>Hope Now </li></ul>
    21. 21. Scams running rampant <ul><li>The purpose is to strip the homeowner of their equity and eventually take the home </li></ul><ul><li>Be aware, contact your legislators, it should be illegal </li></ul><ul><li>Be a resource of good information </li></ul><ul><li>Call your local legal aid office (434) 977-0553 or Virginia Poverty Law Center (804)-782-9430 </li></ul>
    22. 22. Planning a Move How you can help clients move. <ul><li>Be aware of the rental market </li></ul><ul><li>Have information to pass out (i.e., rentals list) </li></ul>
    23. 23. Recap & Questions

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