By RICHARD BURNETT
SENTINEL STAFF WRITER
October 7, 2008

More than 57,000 Floridians caught in the subprime-mortgage mess may be eligible for nearly $1billion in help under a deal made by Countrywide Financial to settle claims that it used deceptive practices to sell financially shaky mortgages.

Details about the settlement came Monday, about three months after Florida, California and nine other states accused Countrywide of luring borrowers into inappropriate, unaffordable loans with high fees and predatory terms.

Across the country, more than 400,000 Countrywide customers may qualify for up to $8.4billion in mortgage relief, according to the company, which plans to launch the program Dec.1.

Customers may see reductions in their interest rates or principal, late-fee waivers, and in some cases, cash payments for 5,000 customers who have already lost their homes, the nation’s largest mortgage lender said.

Countrywide, now a unit of Bank of America, also made the unprecedented move of suspending foreclosure actions against all customers of subprime and other risky mortgages until the company can see whether they qualify for the relief.

Some consumer advocates welcomed the initiative as a big step forward in helping the nation recover from its mortgage and credit crisis. “In principle, this is a good approach,” said Kathleen Day, spokeswoman for the Center for Responsible Lending, a nonprofit advocacy group based in Durham, N.C. “It is a clear example of the mass loan-modification effort that we need to deal with this meltdown.”

Florida officials credited Bank of America for helping resolve the allegations. “This agreement will bring much-needed relief to countless homeowners,” said Florida Attorney General Bill McCollum. “We appreciate Bank of America’s commitment to rectify the situations created by Countrywide’s loan practices.”

In several lawsuits filed against Countrywide, state authorities said they found widespread abuses by the company in selling subprime mortgages — the higher-cost loans made to people with troubled credit records. Bank of America took over negotiations in the dispute after it acquired Countrywide in July in a stock deal valued at more than $3 billion.

“We are confident that together with the Attorneys General we have developed a comprehensive program that provides more solutions than ever before to assist troubled borrowers and put them back on the path to sustained home ownership,” said Barbara Desoer, president of Bank of America Mortgage.

Countrywide has lost billions in the subprime-mortgage meltdown as defaults and delinquencies skyrocketed since mid-2007.

Since the foreclosure crisis erupted, Bank of America, Countrywide and other mortgage lenders have voluntarily worked with troubled homeowners to reach new affordable mortgage terms. The industry-sponsored Hope Now Alliance claims that lenders have helped more than 2.3million people avoid foreclosure since mid-2007. But consumer advocates are skeptical of such numbers. What the industry generally calls “loan modifications” are too often temporary fixes that set up the homeowner for failure later, they say.

“It’s like a Band-Aid on a really bad wound,” said Rosalyn Dorfman, a field counselor for The Helpful Hands Foundation, a HUD-certified nonprofit housing-counseling agency in Orlando. “In many cases, they’re putting people in interest-only payments for several years and calling that a loan modification. Yes, the people are still in their homes for now, but then they’ll be in the same bad situation again.”

Mary Duckett is one homeowner who worries about that.

The 55-year-old Orlando nursing assistant approached Countrywide for relief last year after her husband was diagnosed with multiple sclerosis; they were financially strapped with medical bills and became delinquent on their mortgage.

After lengthy talks — and with the help of the ACORN Housing counseling agency — Countrywide agreed to rework the Ducketts’ loan. Now they have interest-only payments for five years; then it reverts to the original terms. That’s not going to be enough for them to survive, she said. “It’s hard even now to make the payment, but we’re doing it, and at least we’re still in our house,” Duckett said. “But it’s not the good fixed rate that we need. … This is not a permanent solution.”

Richard Burnett can be reached at rburnett@orlandosentinel.com or 407-420-5256.
LINK TO STORY: http://www.orlandosentinel.com/business/custom/thrifty/orl-asecmortgages07100708oct07,0,6335375.story

· National Foreclosure Information

· Promissory Note Discovery

· Rescind Your Mortgage

· Truth In Lending Act – PDF

· Mortgage Forgiveness Debt Relief

· Foreclosure Dismissal

· RESPA ACT – Loan Regulations

· Foreclosure Counseling Assistance

· Foreclosure Prevention Act of 2008

Telephone: 407.908.8125

Languages Spoken: English, Spanish

About Me

My name is Erika Echevestre and I am with The Helpful Hands Foundation in helping folks fight to save and keep their homes from foreclosure.

As a part of The Helpful Hands Foundation I specialize in helping people work with their foreclosure problems.

Foreclosure affects more than just you. It affects your whole family. Many families will face losing their homes this year. Call today for help. Because nothing is worse than doing nothing.

Basic Counseling Qualifications for Stopping Foreclosure

Remember, not all options will apply to everyone. Each homeowner will have a unique set of circumstances. It is very important that an assessment of your current crisis situation be performed before we can find the right solution for you.

Below, you’ll find a list of questions that will help us determine the best option for you.

• Is your mortgage payment 1 to 15 months behind?
• Are you able to make your regular mortgage payment now?
• Can you make your regular mortgage payments consecutively?
• Are you currently living in your home?
• Have you recovered from the financial hardship that caused you to get behind?

If you answered “YES” to the above questions, you may qualify for Mortgage Counseling Assistance.

Call Us Now 407.366.3999

Our Guarantee – We are here to coach you to get back on your feet with-out loosing your greatest asset – YOUR HOME.

KEY REASON as a non profit foreclosure prevention counseling organization: we provide foreclosure counseling, and hands on assistance in dealing with your lender, bank and investor properly and most of all, successfully.

The Second Key Reason is this: We ARE NOT & DO NOT work with ANY individuals or businesses that buy ANY portion of their clients real estate assets as part of their “counseling options”.

This is Our Guarantee, and it is this simple. If you are willing to work hand in hand with us, you have a wonderful chance to get back on your feet and successfully keep and retain your home ownership.

H.R. 3221: Foreclosure Prevention Act of 2008 became law on 7/30/2008 signed by presidential order.

Mortgage Payments Sending You Reeling? Here’s What to Do

The possibility of losing your home because you can’t make the mortgage payments can be terrifying. Perhaps you are one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate. Or maybe you’re anticipating an adjustment, and want to know what your payments will be and whether you’ll be able to make them. Or maybe you’re having trouble making ends meet because of an unrelated financial crisis.

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can’t tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

Here are some examples of types of mortgages:

• Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
• ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
• Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase — and you have trouble making the increased payments, find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you’re planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you’re planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You Are Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. Most loan servicers are willing to work with customers they believe are acting in good faith, and those who call them early on. The longer you wait to call, the fewer options you will have. After you’ve missed three or four payments and your loan is in default, most loan servicers won’t accept a partial payment of what you owe. They will start foreclosure unless you can come up with the money to cover all your missed payments, plus any late fees.

Avoiding Default and Foreclosure

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer:

Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you’ve missed only a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn’t going to help you if you’re in a home you can’t afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications can include lowering the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A loan modification may be necessary if you are facing a long-term reduction in your income.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you’ve reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy another home, get life insurance, or sometimes, even get a job. Still, it is a legal procedure that can offer a fresh start for people who can’t satisfy their debts.

If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

Contacting Your Loan Servicer

Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan. Then, write down the answers to the following questions:

• What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

Throughout the foreclosure prevention process:

• Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, “return receipt requested,” so you can document what the servicer received. Keep copies of your letter and any enclosures.
• Meet all deadlines the servicer gives you.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional “workout” assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

Consider Giving Up Your Home Without Foreclosure

Not every situation can be resolved through your loan servicer’s foreclosure prevention programs. If you’re not able to keep your home, or if you don’t want to keep it, consider:

Selling Your House: Your servicers might postpone foreclosure proceedings if you have a pending sales contract or if you put your home on the market. This approach works if proceeds from the sale can pay off the entire loan balance plus the expenses connected to selling the home (for example, real estate agent fees). Such a sale also would allow you to avoid late and legal fees and damage to your credit rating, and protect your equity in the property.

Short Sale: Your servicers may allow you to sell the home yourself before it forecloses on the property, agreeing to forgive any shortfall between the sale price and the mortgage balance. This approach avoids a damaging foreclosure entry on your credit report. You still may face a tax liability on the amount of debt forgiven. Consider consulting a financial advisor, accountant, or attorney for more information.

Deed in Lieu of Foreclosure: You voluntarily transfer your property title to the servicers (with the servicer’s agreement) in exchange for cancellation of the remainder of your debt. Though you lose the home, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure. You will lose any equity in the property, and you may face an income tax liability on the amount of debt forgiven. A deed in lieu may not be an option for you if other loans or obligations are secured by the property on your home.

Housing and Credit Counseling

You don’t have to go through the foreclosure prevention process alone. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost.

More Links of Similar Interest to Foreclosure Assistance:

Mortgage Forgiveness Debt Relief Act of 2007

Truth In Lending Act

Rescind Your Mortgage Loan and Save Your Home From Foreclosure

Fight Your Foreclosure: Make Them Produce The Original Promissory Note

RESPA ACT – Loan Regulations Servicing Guidelines

American Housing Rescue and Foreclosure Prevention Act of 2008: H.R. 3221

Foreclosure Dismissal