Were You Foreclosed Upon in 2009 or 2010? Banks to Pay $8.5 Billion To Settle Foreclosure Abuse

This just in from CNBC, ten banks will pay a collective $8.5 billion to borrowers to settle foreclosure abuses. This all part of a deal with the Federal Reserve and the office of controller of the currency which began in 2011 after the so-called robo signing scandal came to light. Banks were required to do an independent review of foreclosures from 2009 and 2010, but they were taking too long and cost too this settlement puts an end to those reviews.

The banks will make $3.5 billion in direct payments to eligible borrowers and 5.2 billion in other assistance such as loan modifications and forgiveness of deficiency judgment. This settlement affects some 3.8 million borrowers. Eligible borrowers could receive somewhere from a few hundred dollars to several thousand.

The banks included are Aurora, Bank of America, Citibank, Chase, Metlife, PNC, Sovereign, Sun Trust and Wells Fargo. Four other banks, Allied, HSBC and One West were in the talks but did not sign on to this deal. Together, they service close to 500,000 loans.

This deal is separate from the $11.6 billion settlement announced just this morning between fannie mae and bank of america.

These settlements could pave the way for more normal foreclosure processing. We see a surge in foreclosures as banks move to clear the pipeline of defaulted mortgages now that most of the robo-signing charges are behind them.

Mortgage Forgiveness Policy was EXTENDED until 1/1/2014

Mortgage Debt Tax Relief Extended in the American Taxpayer Relief Act of 2012

As part of the American Taxpayer Relief Act of 2012,the tax break for forgiven mortgage debt that was set to expire Dec. 31 but was extended by lawmakers when they dodged the “fiscal cliff” this week.

The tax break, which has been extended to the end of 2013, allows home owners facing short sales, reduced loan principals, or foreclosures to avoid paying taxes on any debt still owed to the bank. Otherwise, the debt would have been taxed by the IRS as income.

The Mortgage Foregiveness Debt Relief Act first took effect in 2007 and was set to expire 12/31/2012.In 2012 numerous homeowners rushed to complete short sales before the end of the year out of fear that the tax break would not be extended. Homeowners who waited to complete a short sale can now take advantage of this tax break.

If your dreams have been shattered by the false promise of a loan modification and you need to do a short sale, its important to use a Realtor who will be an advocate in your corner and has a proven record of success. Jennifer and I started negotiating our short sales in 2007. We were the first Realtors to obtain the Certifed Distressed Property Expert designation and inspired our peers to follow suit.

Don't be fooled by Realtors who claim to have done short sale in the 80' or 90's or Realtors claiming they have inside connections with the banks. As it it true short pays now known as short sales have been around a long time, the sub-prime crisis and mortgage backed securities that created this housing crisis is very unique. It requires a extensively trained agent currenton the issues affecting short sale negotiations. Be cautious of Realtors using third party negotiators as they are not dealing directly with the mortgage servicer or note holder.

As Santa Clarita Pre Foreclosure Specialists, Jennifer and I have extensive training and experience in negotiating short sales. Our consultations are free and we provide you with a list of our past clients as references.All commisions are paid by the bank and in most cases we have gotten our clients $3000 relocation assistance.

Jennifer & Gary Ricco Realtors Phone: 661-803-2093 E-mail: Jennifer@JenniferRicco.com RE/MAX of Santa Clarita 25101 The Old Road Santa Clarita, CA 91381 US Fax: 866-873-6403
DRE License # 01461940/01803395