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Cape lawmakers sponsor bill to ease flood zone changes

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BOSTON — State lawmakers are moving forward with legislation to help floodplain home and business owners cope with surging insurance costs forced by new federal rules and expanded flood zone maps.

“Without this help, we’re greatly concerned that many additional homeowners will face foreclosure and local merchants will be at risk for going out of business,” Rep. Timothy Madden, D-Nantucket, one of two Cape representatives co-sponsoring the bill, told the Joint Committee for Financial Services hearing Thursday.

The bill is in reaction to changes in federal flood insurance, including new expanded flood maps drawn by the Federal Emergency Management Agency.

The bill, filed by House Speaker Robert DeLeo, would stop mortgage lenders from requiring homeowners to buy flood insurance for an amount greater than their outstanding home loan, including coverage for contents and a deductible of less than $5,000.

The goal is to lower insurance coverage, which has seen big increases in premiums paid by homeowners.

“There’s not a real lot that the state can do, but this is a real remedy,” Rep. David Vieira, R-East Falmouth, the other co-sponsor, said in a telephone interview.

Banks also would be required to tell homeowners clearly that required flood insurance coverage tied to their outstanding mortgage amount may not be enough to pay for damages after a flood.

The federal Biggert-Waters Act of 2012, coupled with the expanded flood plain maps, has created a headache for property owners in flood-prone areas, who have seen insurance costs increase by double- and triple-digit percentage rates since the law passed.

The federal act was passed to shrink the National Flood Insurance Program’s $24 billion deficit by increasing premiums so insurance rates accurately reflect a property’s risk of flood. The redrawn flood zone maps, which include larger flood zone areas, will require more people to buy flood insurance while the program also phases out federal subsidies for insurance on properties long deemed at risk.

“We understand what the federal government is attempting to do,” Madden said. “But their process is flawed.”

In December, the state’s congressional delegation urged FEMA to slow implementation of the new flood zone maps and reconsider the data used to develop them. A scientific study requested by U.S. Rep. William Keating, D-Mass, revealed maps for towns on New England’s Atlantic coastline had been developed using Pacific Coast data.

FEMA announced earlier this month that it would not implement the new flood maps until at least October.

Last month, the U.S. Senate voted to delay implementing the Biggert-Waters Act for four years to re-examine the flood maps and complete an affordability study. The bill is now awaiting action in the U.S. House.

“This is not just a coastal issue,” Madden said. “It involves rivers and streams and ponds and everything else where people are affected by this. If it hasn’t gotten to your neighborhood yet, it will.”

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Article source: http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20140228/NEWS/402280342

Seven Charged in Home Loan Mod Scam That Ripped off Hundreds

Seven people accused of perpetrating a home loan modification scam that ripped off hundreds of Inland Empire residents are facing a string of felony charges, state officials said Wednesday.

The California Attorney General’s Office announced a 24-count complaint alleging conspiracy, grand theft and state income tax evasion against Nehad “Nick” Ayyoub, 57, of San Bernardino; James Clemons, 55, of Riverside County; Wissam Ismall, 32, of Riverside County; Eddie Mercado, 57, of San Bernardino; Ghydan Ayyoub Rabadi, 38, of Los Angeles; Zaid Rabadi; 49, of Los Angeles; and Majid Safaie, 60, of Orange County.

All of the defendants are behind bars in correctional facilities in Los Angeles, Orange, Riverside and San Bernardino counties. Their bail amounts range from $50,000 to $75,000.

Prosecutors allege Ayyoub was the mastermind behind the scam, which ran from 2007 to 2010 and targeted mainly San Bernardino-area residents.

The defendant ran three businesses — Firm Loans, First Choice Debt Solutions and Insurance and Investments Inc., all of which were based in San Bernardino County.

Ayyoub and his co-defendants preyed upon property owners at risk of defaulting on their mortgages and seeking to get their monthly payments down, according to the attorney general’s office.

The scam artists told victims they could negotiate with their loan servicers and banks to get loan modifications, prosecutors allege. But before providing any service, the property owners would have to make up-front payments — which supposedly would be fully refunded if at any time they were not satisfied, according to the government.

Payments ranged from $1,500 to $10,000, according to court documents. The defendants allegedly instructed homeowners to stop paying their mortgages and instead write checks only to Ayyoub and his co-conspirators.

Prosecutors believe as many as 1,550 homeowners were victimized.

“These individuals profited from the fear and desperation of hard- working Californians, who were simply fighting to keep their homes during the height of our state’s foreclosure crisis,” said Attorney General Kamala Harris. “This kind of predatory activity is reprehensible.”

Agents with the California Attorney General’s Bureau of Investigations, along with inspectors from the California Franchise Tax Board, conducted the investigation.

Anyone who believes they may have been snared in the scam was urged to file an online complaint at http://oag.ca.gov/consumers.

If convicted, the defendants could face anywhere from eight to 12 years in prison.

The case was filed in San Bernardino County Superior Court.

– City News Service.

Article source: http://murrieta.patch.com/groups/police-and-fire/p/seven-charged-in-home-loan-mod-scam-that-ripped-off-hundreds

Delegate argues for 6-month foreclosure freeze

A debate Thursday in the House Environmental Matters Committee ultimately centered on whether legislators have done enough. Many homeowners are still facing crises, but business groups say it’s time to let the foreclosures run their course so the market will recover.

Del. Aisha Braveboy, a Prince George’s County Democrat running for attorney general, argued for a bill that would halt foreclosures for six months. She said this could save homeowners struggling through bureaucratic delays with banks, such as lost paperwork.

Del. Heather Mizeur, a Montgomery County Democrat running for governor, has proposed banning deficiency judgments. Judges sometimes impose these on homeowners who default on their mortgages when the sale of their homes doesn’t cover what they owe.

Murphy argued that these measures would hamper loan negotiations and slow down the market recovery.

“It really does have a detrimental effect for all homeowners in the state,” by dragging down property values, Murphy told the House Environmental Matters Committee.

According to a January report from the data service RealtyTrac, Maryland’s foreclosure starts had risen by 126 percent in the past year. One in every 543 housing units had a foreclosure filing, nearly twice the national average.

Nationwide, the foreclosure rate had dropped for 40 consecutive months, according to the report.

Braveboy told the committee her bill could lead to canceling many impending foreclosures.

She said some of these involve robo-signing, in which mortgage industry employees approve documents they haven’t read and use fake signatures. In some cases, banks don’t have legal authority to carry out foreclosures, but since the borrowers don’t have attorneys, no one halts the process.

During the moratorium, the state investigates the banks’ practices and considers further protections for borrowers, Braveboy said.

Mizeur’s bill would adopt the policy of 12 other states: a ban on deficiency judgments.

If someone defaults on a $100,000, and the bank sells the person’s house for $80,000, the bank can seek a court order to collect the other $20,000 by garnishing the borrower’s wages or levying the person’s bank account.

Mizeur said it’s unnecessary because banks can recoup their losses via mortgage insurance. Though in theory, deficiency judgments are only for unrecovered losses.

Murphy said interest rates and down payment requirements tend to be higher in states that ban deficiency judgments.

She praised the measures legislators have taken since 2008 to protect borrowers and end the foreclosure crisis. But she said these measures are enough.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Article source: http://www.washingtonpost.com/local/delegate-argues-for-6-month-foreclosure-freeze/2014/02/27/41de82ea-9ff7-11e3-878c-65222df220eb_story.html

Washington Supreme Court Takes On Loan Fraud, Foreclosure Fights

Larry Jametsky visits his family home frequently, even though he was evicted from it almost four years ago.

He and his family have been homeless since then, but they’ve stayed near the blue house in the city of SeaTac. “This was my grandparents’ house, my dad’s house,” Jametsky said.

Jametsky is in the throes of a legal battle over the house after he signed over the deed in what he thought was a loan deal. His case and others have caught the attention of the Washington Supreme Court and attorney general as the effects of the housing crisis continue to be felt.

Loan Or Sale?

According to court documents, in 2008 Jametsky owed $10,000 in property taxes and he started looking for a loan. 

Then his life went off the rails when his teenage son was killed. Shortly after, he was contacted with an offer. “They came and woke me up and that’s the day that I signed the loan papers, was just three days after losing my 16-year-old son,” Jametsky said.  “Anybody shouldn’t have to try and cope or put all that stuff in your head, it’s just too much to try and deal with.”

In the end he received what he thought was a loan. But it turns out Jametsky had signed over the deed to his house for $100,000 even though it was estimated to be worth $230,000. After paying his obligations and inflated fees, Jametsky ultimately received $4,697.

His loan payments were in fact considered rental payments under the agreement he signed. When he realized his mistake he stopped paying and was evicted.

He sued to reverse the sale, under a recent law that protects homeowners from fraud. The lawsuit was thrown out at every level until it came to the Washington Supreme Court. In a unanimous decision earlier this month, the court said Jametsky’s case should be re-examined.

David Leen, Jametsky’s lawyer, said the case is one of several “amazing” decisions in the past year or so where the Washington Supreme Court has bolstered the rights of homeowners.

“They attack a lot of federal court decisions that have been adverse to the homeowners’ position, and they protect homeowners that are in foreclosure or have had a foreclosure without proper notice,” Leen said. “So I think the climate has been very good for the protection of rights of homeowners.”

Rodney Olsen bought Jametsky’s house. Olsen’s lawyer, Aaron Okrent, declined to be interviewed because the case is still ongoing and is headed back to trial. There, Okrent said new evidence will be considered, including what he said is Jametsky’s “conflicting testimony.” 

Wrongful Foreclosure Suits

The Washington Supreme Court is scheduled to hear oral arguments in another homeowners’ rights case, that of Florence Frias

Attorneys for the lenders in the Frias case also declined to be interviewed, but the Washington Bankers Association filed a brief in which it said allowing homeowners to sue for wrongful foreclosure before the sale has taken place would add costs and delays for everyone involved.

Washington Attorney General Bob Ferguson and his predecessor, Rob McKenna, have been involved in the Jametsky and Frias cases and many more. Ferguson said foreclosure prevention has been a priority during both of their terms. Legal settlements have provided funding to help homeowners.

Shannon Smith of the Attorney General’s Office said one role of the office is to press the rights of homeowners in court. “It’s very important to us to remind the court there are very valuable protections for consumers in our state law,” Smith said, “and the court should uphold those laws and make sure that consumers get the legal benefits that our laws entitle them to.”

Smith said they are prevailing in these lawsuits, but it took some time. “My sense is because the mortgage foreclosure crisis really started in 2008 and 2009, and now those cases are working their way through the court, that’s why we’re seeing them now,” she said.

A Question Of Inventory

But are these victories too late to benefit most homeowners affected by the housing crisis?

Foreclosures have declined 55 percent in King County over the last year, according to the website Seattle Bubble.

Real estate investor Stewart McCullum said it’s unclear how many distressed or bank-owned houses are still out there. He said the number of houses he sees being sold at foreclosure auctions has gone way down.

“I guess the big question is, how much inventory is the bank really holding onto and when are they going to let it go?” McCullum said. “As long as they continue to trickle it out, it will have the illusion that there’s not that much inventory, and it actually has helped house values.”

McCullum said after years of turmoil, the housing market seems to be stabilizing. But people are still living the effects of the crash – McCullum bought his own home at a foreclosure auction last year. He said the seller of his home now rents a mother-in-law unit from him in the basement. 

As for Jametsky, his case will return to King County Superior Court. If he prevails, he hopes to move back in to the blue house with his girlfriend and their young son. “I would like my home back,” he said.

Article source: http://kuow.org/post/washington-supreme-court-takes-loan-fraud-foreclosure-fights

Foreclosure rates keep falling



There were 48,000 completed foreclosures in January, a 19 percent drop from a year ago but still well ahead of the pre-recession average of 21,000, reports CoreLogic Inc. of Irvine, Calif.

There were 48,000 completed foreclosures in January, a 19 percent drop from a year ago but still well ahead of the pre-recession average of 21,000, reports CoreLogic Inc. of Irvine, Calif.











Wendy Culverwell
Staff reporter- Portland Business Journal

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CoreLogic reports a dramatic drop in completed foreclosure rates over the past year.

The Irvine, Calif.-based real estate research firm reports 48,000 foreclosures were completed nationally in January, a 19 percent drop from one year ago.

There were 2,292 completed foreclosures in the Portland area for the 12 months that ended in January. CoreLogic said 3.9 percent of mortgages were seriously delinquent.

Completed foreclosures serve as an indicator for the total number of homes actually lost to foreclosure. There have been approximately 4.9 completed foreclosures since September 2008. Prior to the recession, the average figure was 21,000 per month.

“The painful tide of high foreclosures continues to recede as fewer borrowers are losing their homes and states are working through their shadow inventory,” said Anand Nallathambi, president and CEO of CoreLogic.

“We are entering 2014 with less than a million homes in the foreclosure inventory. We expect to see continued progress in the months ahead, but the judicial foreclosure states will continue to lag the rest of the country in working down their backlogs of foreclosed properties.”

Wendy Culverwell covers real estate, retail and hospitality.

Article source: http://www.bizjournals.com/portland/blog/real-estate-daily/2014/02/foreclosure-rates-keep-falling.html

San Bernardino man among seven held in multi-million dollar mortgage fraud …



SAN BERNARDINO Seven coworkers were arrested for allegedly taking advantage of at least 1,550 struggling homeowners during the recent foreclosure crisis, according to the state’s Attorney General’s Office.

Kamala D. Harris announced Wednesday that her office has filed 24 felony counts — 20 for grand theft — against 57-year-old San Bernardino resident Nick Ayyoub, president of The Firm Loans, Insurance and Investments Inc. and First Choice Debt Solutions Inc. The complaint alleges Ayyoub and six associates defrauded homeowners of $6.2 million by charging them up front for loan modification services that they didn’t provide.

“These individuals profited from the fear and desperation of hard-working Californians who were simply fighting to keep their homes during the height of our state’s foreclosure crisis,” Harris said in a statement. “This kind of predatory activity is reprehensible.”

The other six charged were identified as Ghydan Ayyoub Rabadi, 38, of Los Angeles, Zaid Rabadi, 49, also of Los Angeles, James Clemons, 55, of Riverside County, Wissam Ismail, 32, of Riverside County, Eddie Mercado, 57, of San Bernardino, and Majid Safaie, 60, of Orange County.

Citing court records, the attorney general’s statement said, from January 2007 to March 2010, homeowners were instructed to stop paying their mortgage and to instead give the money to Ayyoub and his colleagues to ensure that they would obtain a loan modification, causing many victims to default on their home loans without obtaining a modification.

“Homeowners were falsely told that attorneys would be negotiating their loan modifications, that they would get a loan modification with no risk of failure, that they would receive a refund if they were dissatisfied and that the suspects had special contacts with lenders, which would give them an advantage in obtaining lowered monthly payments,” the statement said.

The complaint against Ayyoub and his associates was filed in Monday in West Valley Superior Court in Rancho Cucamonga. Ayyoub is named in all 20 grand theft counts as well as one count of conspiracy to commit a felony and three counts of filing false tax returns. The other defendants are named in the conspiracy charge and various grand theft counts.

Ayyoub has been booked into West Valley Detention Center in Rancho Cucamonga in lieu of $75,000 bail, according to online booking records. He faces a maximum prison sentence of 12 years, according to the attorney general.

The other six were being held in various Southern California jails and each faces an eight-year maximum sentence, according to Harris. Their bail was set at $50,000 each.

Article source: http://www.dailybulletin.com/general-news/20140226/san-bernardino-man-among-seven-held-in-multi-million-dollar-mortgage-fraud-scheme

Calls for Foreclosure Moratorium Intensify

A consortium of community and civil rights groups are pressuring Maryland legislators to commit to a six month moratorium on foreclosures in the state amid concerns of irregularities in the proceedings.

Members of the Maryland NAACP, CASA de Maryland, and the Maryland Black Caucus joined other community groups on the steps of the state capital in Annapolis to rally for housing and wage issues while calling on legislators to pass laws regulating foreclosure proceedings.

“We are united here today. We are fighting together,” Gustavo Torres, executive director of CASA de Maryland, belted out from the podium to a crowd of more than 200 people. “Yes, we can!”

The NAACP, including the Prince George’s County Branch, has been pressing elected leaders and the Maryland Department of Housing and Community Development (DHCD) to intervene in the increased number of foreclosures occurring in the state over the last year.

The foreclosure rate in Maryland has steadily risen in recent months. According to the DHCD, the state has the second highest foreclosure rate in the nation at the close of 2013, which is an increase from the third quarter of the same year. Within the state, Prince George’s County and Baltimore City have the highest foreclosure rates, according to the DHCD.

“We are in [a] crisis,” said

Carmen Johnson, housing chair of the Prince George’s County Branch of the NAACP. “We have been bamboozled. We must save our families … our homes.”

Community leaders said foreclosures in the state overwhelming affect minority communities, sapping property values and wealth from families who have built equity in their homes.

“It becomes a huge problem for communities,” said Del. Aisha Braveboy (D-Dist. 25), who spoke at the rally.

Braveboy joined state Sen. C. Anthony Muse (D-Dist. 24) of Fort Washington in introducing legislation in the General Assembly that would put more restrictions on banks during the foreclosure process and on how banks maintain foreclosed properties.

“The [legislation] will hold the banks accountable and prevent the artificial depreciations of home values in our state,” she said.

Braveboy said oftentimes, banks purchase mortgages from other lenders without acquiring proper paperwork or verification. Some banks start the foreclosure process without verifying that it owns a property’s mortgage

“There have been some concerns that banks purchase mortgage documents … they may not have the original [mortgage note],” Braveboy said.

Braveboy introduced HB1322, legislation that calls for a six-month moratorium on foreclosures — a measure that NAACP officials said is long overdue.

Johnson said that foreclosures are impacting middle-class families who could afford their homes when they were purchased. She said the NAACP has seen an uptick in calls from homeowners from all races who are trying to stop their homes being foreclosed.

“These are middle-class or even upper-middle-class people,” she said. “We’ve been brainwashed into thinking it was blacks and Hispanics running out buying homes they couldn’t afford.”

Johnson said that the NAACP is asking the state to have an independent organization audit foreclosure proceedings to ensure fairness during the process.

“Even Stevie Wonder can see we have a problem with foreclosures in this state,” she said.

But state officials said they may have their hands tied in intervening between the rights of private banks and their ability to govern contracts related to foreclosures — even if the state legislature passes a law allowing a moratorium.

“The state doesn’t have any authority to stop private banks from enforcing their contracts,” said Allen Brody, spokesman for the Maryland Attorney General’s Office. “We’re all interested in protecting the rights of the people … the right to own property and maintain their homes.”

Article source: http://washingtoninformer.com/news/2014/feb/26/calls-foreclosure-moratorium-intensify/

Foreclosures Climaxing In New York-New Jersey Market

The epicenter of the U.S. foreclosure crisis is shifting to New Jersey and New York, threatening a housing rebound in one of the country’s most densely populated areas.

New Jersey has surpassed Florida in having the highest share of residential mortgages that are seriously delinquent or in foreclosure, with New York third, a Mortgage Bankers Association report showed last week. By contrast, hard-hit areas such as Arizona and California have some of the lowest levels of soured loans after allowing banks to quickly foreclose after the 2007 property crash.

The number of New York and New Jersey homeowners losing their houses reached a three-year high in 2013. Banks in these states have been slowly working through a backlog of delinquent loans that enabled borrowers to skip mortgage payments for years. Now these properties are poised to empty onto a market where affluent Manhattan suburbs neighbor blighted towns that are struggling most with surging defaults.

“It is really a delayed reaction in New Jersey and New York,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association in Washington. “Loans that were made pre-crisis have been in this state of suspended animation for a number of years. And now, we are beginning to see the pace of resolution pick up.”

Filings Plunge

In January, the number of New York foreclosure auctions reached 527, the highest monthly level since October 2010, according to data firm RealtyTrac. Foreclosure filings in New York City increased 30 percent to 15,993 in 2013, a three-year high, according to RealtyTrac.

Almost 10,000 cases in New Jersey headed to a sheriff sale in 2013, 47 percent more than the year before and the highest level since 2009, according to the New Jersey Administrative Office of the courts. Across the country, repossessions fell 31 percent in 2013 to the lowest since 2007, according to RealtyTrac.

The difference in New York and New Jersey stems partly from a foreclosure process that requires court approval before lenders can seize homes. It takes 1,029 days on average to foreclose in New York, the longest timeline in the U.S., followed by New Jersey at 999 days and Florida, at 944 days, RealtyTrac data show.

Delays were worsened by negotiations between top banks and state attorneys general over alleged foreclosure abuses that ended with a $25 billion settlement in 2012. Superstorm Sandy, which damaged homes and businesses in coastal northeast communities in 2012, also slowed the process.

New York Trailing

The real estate markets in New York and New Jersey are trailing the rest of the country as a result. Prices in New Jersey, the most densely populated state, climbed 2.9 percent in the fourth quarter from a year earlier, compared with a 7.7 percent jump for the U.S, the Federal Housing Finance Agency said yesterday. New York values rose 3.7 percent.

California prices surged 19.5 percent and Arizona’s gained 15.2 percent. These states do not have a judicial foreclosure process.

“Price increases that are occurring in the rest of the country are not likely to happen in the New York-New Jersey area, with the potential inventory that can come at any time,” said Lawrence Yun, chief economist of the National Association of Realtors.

“When one sees a price increase in Phoenix or many other parts of the country, one can assume it’s a genuine increase from falling inventory,” he said. “If it happens in Edison, New Jersey, or Long Island, New York, one has to ask, ’Is this for real or just temporary?”

Commission Income

Jon Pardi, a 62-year-old resident of Edison, is among those facing eviction after he stopped making house payments in mid-2012. Last month, a judge gave Pardi six months to generate enough income so that he could work out a modified payment arrangement with his loan servicer, Ocwen Financial Corp., or lose his home to foreclosure, he said.

Pardi said he could no longer pay his loan because his commission-based income as a mortgage broker dropped to $20,000 a year from a peak of more than $100,000. Having little confidence in New Jersey’s housing market rebounding, and the career prospects for loan officers, Pardi is training to become a holistic nutritionist.

“My odds are down but the chances of saving my home aren’t zero,” Pardi said. “If I start making money again, everything changes. But if jobs don’t come back for me, and for my country, then it’s going to keep moving in a down direction.”

Ocwen, which declined to comment on specifics of the case, citing privacy considerations, said it hasn’t made a decision and hasn’t received the necessary documentation from the borrower.

Ocwen Response

“Ocwen has been working hard to provide a modification or other resolution for this borrower,” since the servicing of the loan was transferred late last year from the prior servicer, the company said in an e-mailed statement.

Lenders in New Jersey are pushing cases through more quickly and it now takes about two months to process final judgments against delinquent homeowners, compared with a backup of nine months a few years ago, said Kevin Wolfe, assistant director of the Civil Practice Division in the Administrative Office of the Courts.

The Office of Foreclosure, which reviews case files before they can move to the final step of sheriff sale, has added four permanent staff members, six law clerks and 10 case analysts since 2012. It previously had seven employees.

Staffed Up

“We are staffed up to move these cases faster,” Wolfe said. “But the other reason cases are moving more quickly is that lenders have improved their foreclosure practices and worked out logistics with their law firms and, as a result, they’re geared up to handle foreclosures more efficiently.”

Private-equity firms such as Blackstone Group LP — which helped drive up prices by buying thousands of single-family homes to rent in Arizona, Nevada, California and Florida — have steered clear of the Northeast. Large investors favor markets with newer construction and demographic growth rather than the Northeast’s aging homes and higher property taxes, said Sam Khater, senior economist for CoreLogic.

Some hedge-fund investors are instead purchasing delinquent mortgages in the New York and New Jersey area. They are discounted because of the legal delays, said Jeff Taylor, managing partner at Digital Risk, a mortgage-risk analytics firm.

The investor strategy is to avoid court delays by modifying loans, and if that’s not feasible, to pay homeowners to handover keys or sell for less than what’s owed, Taylor said. That may help flush out the pipeline of delinquencies.

Tight Market

“The sooner that this inventory that has been pent up gets to the market place the quicker you’re going to see more home price appreciation,” Taylor said. “It gets the overall real estate market healthier quicker.”

Housing inventory remains tight in the U.S., with a 4.6 month supply in December, according to the National Association of Realtors. New Jersey had a 6.6 month supply, the New Jersey Association of Realtors data show. A six-month inventory is considered equilibrium between buyers and sellers.

While investors may help the market, they are generally avoiding hard-hit neighborhoods in cities such as New Jersey’s Newark, Irvington, Elizabeth, Trenton and Camden, according to Jeffrey G. Otteau, president of Otteau Valuation Inc. in East Brunswick. About 21 percent of New Jersey foreclosures are in urban areas and another 18 percent are in towns hit by Sandy. Only 4 percent are in the southern suburbs and 2.5 percent in the northern ones, Otteau said.

“There is a crisis, and where that crisis will play out is in inner, urban neighborhoods where unemployment is highest, credit scores are lowest and investor appetite is non- existent,” Otteau said.

Eminent Domain

Newark, the state’s most populous city, and nearby Irvington are considering plans to use government power to seize underwater mortgages to help homeowners reduce debt and avoid foreclosure. The cities are researching a program that would offer fair-market value for the loans and reissue them to homeowners who can afford to keep making payments at the lowered amount.

Many largely black and Hispanic communities in New Jersey and elsewhere were targeted for predatory loans during the boom, said Linda E. Fisher, law professor at Seton Hall University, who is helping the cities research the eminent domain proposal.

Colbert’s Town

Fisher is also campaigning with residents on her block in the town of Montclair to encourage the bank, which owns a vacant property two doors down from her, to clean it up and resell it. The house, which has been empty for three years, was stripped of pipes. It attracted squatters who moved in a stove and a flat screen television, she said.

Montclair, home of comedian Stephen Colbert, is a leafy commuter town with hundreds of shops and restaurants accessible by foot.

“Here we are in our middle- and upper-middle-class community and we’re seeing the same problem of poor maintenance by servicers,” Fisher said. “The foreclosure crisis has had ripple effects and it is not limited to poor communities of color where it’s concentrated.”

About a 15-minute drive south of Fisher, a court officer knocked on the door of the two-story home on Newark’s west side that Janet Hopes-Edrington shares with her elderly parents. The officer served her with foreclosure papers. Hopes-Edrington, 50, said she had filed the necessary paperwork to modify the terms of payments with her lender in December and was surprised to learn it was pursuing a foreclosure. Now, she’s contemplating having to move along with her infirm parents.

Hopes-Edrington, who lives on Social Security disability benefits, fell behind on her mortgage after losing her job at the Internal Revenue Service and hasn’t made a mortgage payment since July 2012.

“That’s the thing that’s getting me, I can’t easily relocate,” she said. “I have no idea what I’m going to do.”
 

Article source: http://www.fa-mag.com/news/foreclosures-climaxing-in-new-york-new-jersey-market-17081.html

Rep. Esty Helps Veteran Recover over $16000 in Social Security Benefits; Avoid …

NEW BRITAIN, CT – February 26, 2014 – (RealEstateRama) — This week, Rep. Elizabeth Esty (CT-5) shared a “Constituent Corner” story from Thomas Campbell of Danbury. Mr. Campbell, a former Marine who was awarded a Purple Heart for his service, went months without receiving his Social Security benefits. Two months behind on his mortgage, Mr. Campbell faced pre-foreclosure on his home.

After, Mr. Campbell reached out to Esty’s office, her staff contacted the Social Security Administration and helped correct a clerical error, recovering Mr. Campbell’s benefits and ensuring timely payments moving forward.

“I never knew what a Member of Congress could do to help me. Others should give her a chance to help you out,” said Mr. Campbell. “Congresswoman Esty was a God-send. Without her, I’d probably be on the street today.”

Residents of Connecticut’s 5th District who are having issues with their Social Security benefits are encouraged to reach out to Rep. Esty’s office at 860-223-8412.

“Constituent Corner” highlights positive stories from folks who sought assistance with the federal government through Rep. Esty’s office. “When I talk with constituents after they’ve worked with my office, many of them ask me to share their stories so that others will know how to get help as well,” said Esty. “My office is here to cut through the red tape to help folks receive the benefits they have earned and better understand the federal programs that are out there.”

 

 

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Article source: http://connecticut.realestaterama.com/2014/02/26/rep-esty-helps-veteran-recover-over-16000-in-social-security-benefits-avoid-foreclosure-ID0758.html

Foreclosures Climaxing in New York-New Jersey Market: Mortgages

Feb. 26 (Bloomberg) — The epicenter of the U.S. foreclosure crisis is shifting to New Jersey and New York, threatening a housing rebound in one of the country’s most densely populated areas.

New Jersey has surpassed Florida in having the highest share of residential mortgages that are seriously delinquent or in foreclosure, with New York third, a Mortgage Bankers Association report showed last week. By contrast, hard-hit areas such as Arizona and California have some of the lowest levels of soured loans after allowing banks to quickly foreclose after the 2007 property crash.

The number of New York and New Jersey homeowners losing their houses reached a three-year high in 2013. Banks in these states have been slowly working through a backlog of delinquent loans that enabled borrowers to skip mortgage payments for years. Now these properties are poised to empty onto a market where affluent Manhattan suburbs neighbor blighted towns that are struggling most with surging defaults.

“It is really a delayed reaction in New Jersey and New York,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association in Washington. “Loans that were made pre-crisis have been in this state of suspended animation for a number of years. And now, we are beginning to see the pace of resolution pick up.”

Filings Plunge

In January, the number of New York foreclosure auctions reached 527, the highest monthly level since October 2010, according to data firm RealtyTrac. Foreclosure filings in New York City increased 30 percent to 15,993 in 2013, a three-year high, according to RealtyTrac.

Almost 10,000 cases in New Jersey headed to a sheriff sale in 2013, 47 percent more than the year before and the highest level since 2009, according to the New Jersey Administrative Office of the courts. Across the country, repossessions fell 31 percent in 2013 to the lowest since 2007, according to RealtyTrac.

The difference in New York and New Jersey stems partly from a foreclosure process that requires court approval before lenders can seize homes. It takes 1,029 days on average to foreclose in New York, the longest timeline in the U.S., followed by New Jersey at 999 days and Florida, at 944 days, RealtyTrac data show.

Delays were worsened by negotiations between top banks and state attorneys general over alleged foreclosure abuses that ended with a $25 billion settlement in 2012. Superstorm Sandy, which damaged homes and businesses in coastal northeast communities in 2012, also slowed the process.

New York Trailing

The real estate markets in New York and New Jersey are trailing the rest of the country as a result. Prices in New Jersey, the most densely populated state, climbed 2.9 percent in the fourth quarter from a year earlier, compared with a 7.7 percent jump for the U.S, the Federal Housing Finance Agency said yesterday. New York values rose 3.7 percent.

California prices surged 19.5 percent and Arizona’s gained 15.2 percent. These states do not have a judicial foreclosure process.

“Price increases that are occurring in the rest of the country are not likely to happen in the New York-New Jersey area, with the potential inventory that can come at any time,” said Lawrence Yun, chief economist of the National Association of Realtors.

“When one sees a price increase in Phoenix or many other parts of the country, one can assume it’s a genuine increase from falling inventory,” he said. “If it happens in Edison, New Jersey, or Long Island, New York, one has to ask, ’Is this for real or just temporary?”

Commission Income

Jon Pardi, a 62-year-old resident of Edison, is among those facing eviction after he stopped making house payments in mid-2012. Last month, a judge gave Pardi six months to generate enough income so that he could work out a modified payment arrangement with his loan servicer, Ocwen Financial Corp., or lose his home to foreclosure, he said.

Pardi said he could no longer pay his loan because his commission-based income as a mortgage broker dropped to $20,000 a year from a peak of more than $100,000. Having little confidence in New Jersey’s housing market rebounding, and the career prospects for loan officers, Pardi is training to become a holistic nutritionist.

“My odds are down but the chances of saving my home aren’t zero,” Pardi said. “If I start making money again, everything changes. But if jobs don’t come back for me, and for my country, then it’s going to keep moving in a down direction.”

Ocwen, which declined to comment on specifics of the case, citing privacy considerations, said it hasn’t made a decision and hasn’t received the necessary documentation from the borrower.

Ocwen Response

“Ocwen has been working hard to provide a modification or other resolution for this borrower,” since the servicing of the loan was transferred late last year from the prior servicer, the company said in an e-mailed statement.

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, said many borrowers who aren’t paying their mortgages don’t put that money aside.

“Some people put money away, but most people are not paying for their house because they don’t have it,” Kaye said. “Why they don’t have it is often due to lack of employment or underemployment.”

Moving Quicker

Lenders in New Jersey are pushing cases through more quickly and it now takes about two months to process final judgments against delinquent homeowners, compared with a backup of nine months a few years ago, said Kevin Wolfe, assistant director of the Civil Practice Division in the Administrative Office of the Courts.

The Office of Foreclosure, which reviews case files before they can move to the final step of sheriff sale, has added four permanent staff members, six law clerks and 10 case analysts since 2012. It previously had seven employees.

“We are staffed up to move these cases faster,” Wolfe said. “But the other reason cases are moving more quickly is that lenders have improved their foreclosure practices and worked out logistics with their law firms and, as a result, they’re geared up to handle foreclosures more efficiently.”

Private-equity firms such as Blackstone Group LP — which helped drive up prices by buying thousands of single-family homes to rent in Arizona, Nevada, California and Florida — have steered clear of the Northeast. Large investors favor markets with newer construction and demographic growth rather than the Northeast’s aging homes and higher property taxes, said Sam Khater, senior economist for CoreLogic.

Hedge Funds

Some hedge-fund investors are instead purchasing delinquent mortgages in the New York and New Jersey area. They are discounted because of the legal delays, said Jeff Taylor, managing partner at Digital Risk, a mortgage-risk analytics firm.

The investor strategy is to avoid court delays by modifying loans, and if that’s not feasible, to pay homeowners to handover keys or sell for less than what’s owed, Taylor said. That may help flush out the pipeline of delinquencies.

“The sooner that this inventory that has been pent up gets to the market place the quicker you’re going to see more home price appreciation,” Taylor said. “It gets the overall real estate market healthier quicker.”

Housing inventory remains tight in the U.S., with a 4.6 month supply in December, according to the National Association of Realtors. New Jersey had a 6.6 month supply, the New Jersey Association of Realtors data show. A six-month inventory is considered equilibrium between buyers and sellers.

Urban Areas

While investors may help the market, they are generally avoiding hard-hit neighborhoods in cities such as New Jersey’s Newark, Irvington, Elizabeth, Trenton and Camden, according to Jeffrey G. Otteau, president of Otteau Valuation Inc. in East Brunswick. About 21 percent of New Jersey foreclosures are in urban areas and another 18 percent are in towns hit by Sandy. Only 4 percent are in the southern suburbs and 2.5 percent in the northern ones, Otteau said.

“There is a crisis, and where that crisis will play out is in inner, urban neighborhoods where unemployment is highest, credit scores are lowest and investor appetite is non- existent,” Otteau said.

Eminent Domain

Newark, the state’s most populous city, and nearby Irvington are considering plans to use government power to seize underwater mortgages to help homeowners reduce debt and avoid foreclosure. The cities are researching a program that would offer fair-market value for the loans and reissue them to homeowners who can afford to keep making payments at the lowered amount.

Many largely black and Hispanic communities in New Jersey and elsewhere were targeted for predatory loans during the boom, said Linda E. Fisher, law professor at Seton Hall University, who is helping the cities research the eminent domain proposal.

Fisher is also campaigning with residents on her block in the town of Montclair to encourage the bank, which owns a vacant property two doors down from her, to clean it up and resell it. The house, which has been empty for three years, was stripped of pipes. It attracted squatters who moved in a stove and a flat screen television, she said.

Montclair, home of comedian Stephen Colbert, is a leafy commuter town with hundreds of shops and restaurants accessible by foot.

“Here we are in our middle- and upper-middle-class community and we’re seeing the same problem of poor maintenance by servicers,” Fisher said. “The foreclosure crisis has had ripple effects and it is not limited to poor communities of color where it’s concentrated.”

Forced Move

About a 15-minute drive south of Fisher, a court officer knocked on the door of the two-story home on Newark’s west side that Janet Hopes-Edrington shares with her elderly parents. The officer served her with foreclosure papers. Hopes-Edrington, 50, said she had filed the necessary paperwork to modify the terms of payments with her lender in December and was surprised to learn it was pursuing a foreclosure. Now, she’s contemplating having to move along with her infirm parents.

Hopes-Edrington, who lives on Social Security disability benefits, fell behind on her mortgage after losing her job at the Internal Revenue Service and hasn’t made a mortgage payment since July 2012.

“That’s the thing that’s getting me, I can’t easily relocate,” she said. “I have no idea what I’m going to do.”

–With assistance from Heather Perlberg and Craig Giammona in New York. Editors: Kara Wetzel, Vincent Bielski

To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Article source: http://www.sfgate.com/business/bloomberg/article/Foreclosures-Climaxing-in-New-York-New-Jersey-5269225.php