Wednesday, June 13, 2012

In the News

Virginia Ruling Holds that Mortgage Lenders Must Hold Face-to-Face Meetings Before Foreclosure in FHA/HUD Loans

HUD Regulation 4155.1 4.C.2.f, which governs FHA mortgages, addresses this common scenario. This regulation states that the contingent liability of the ex-spouse for the future payments due on the mortgage on the home now owned by the other spouse is not be counted if the loan was foreclosed. The regulation reads as follows:
A borrower is generally not eligible for a new FHA-insured mortgage if, during the previous three years his/her previous principal residence or other real property was foreclosed, or he/she gave a deed-in-lieu of foreclosure.
Exception: The lender may grant an exception to the three-year requirement if the foreclosure was the result of documented extenuating circumstances that were beyond the control of the borrower, such as a serious illness or death of a wage earner, and the borrower has re-established good credit since the foreclosure.

Recent changes to the HARP Program removed the maximum percentage amount that a property can have an underwater mortgage. Prior to December 1, 2011, the maximum amount that a property could be underwater was 125% of the loan balance.
This means that if a property is valued at $100,000, the maximum that the mortgage being refinanced would be $125,000 or 125% of $100,000. This would also be referred to as 125% LTV or loan-to-value. is a comprehensive online resource for underwater homeowners who are looking for non-biased information about their options to stay and refinance or consider a short sale.

foreclosure rescue scams overview

The Mortgage Forgiveness Debt Relief Act generally exempts you from being taxed on up to $2 million of mortgage forgiveness on your primary residence through the end of 2012 as long as its due to a decline in the value of your or your financial situation. That means you’ll want to avoid turning it into a vacation or rental property first or waiting until after the act is scheduled to expire at the end of the year.