Foreclosure review program

Homeowners who received a foreclosure filing in 2009 or 2010 may be eligible to have their cases reviewed for errors under a new federal program. Some may receive compensation for shoddy foreclosures.

Tens of thousands of South Florida homeowners who were in foreclosure in 2009 and 2010 will begin receiving letters this week asking if they would like to have consultants go through their case and check for errors.

Under a new federal foreclosure review program, major servicers must hire independent consultants to search for foreclosure errors and provide financial compensation if the reviewers find damages.

Fourteen mortgage servicers have been tasked with hiring reviewers to look over the foreclosures they processed in 2009 and 2010, after an audit by the Office of the Comptroller of the Currency found widespread evidence of shoddy home repossessions.

Here’s how the program will work:

Between now and December 31, homeowners eligible for the program will receive letters from their mortgage servicers asking if they would like to have their foreclosure cases reviewed. Homeowners have until April 30, 2012 to respond.

Eligible homeowners who request a review will have their cases looked over by an independent consultant and will receive a report with the findings of the review. If the reviewer finds that an improperly handled foreclosure caused financial injury, the homeowner will be eligible for financial compensation.

The 14 servicers involved in the review include major players in South Florida like Bank of America, Wells Fargo, Chase Bank and CitiMortgage.

The review initiative could cover more than 4.5 million foreclosure cases nationwide, and tens of thousands in South Florida.

There is no cost to participate in the review process, and only primary residences are eligible for the program.

Different types of financial losses could be eligible for compensation. For example, a homeowner who was foreclosed upon while actively engaged in the mortgage modification process could be eligible for compensation. Homeowners who were charged excessive fees by servicers may also receive some kind of refund.

For more information, visit independentforeclosurereviews.com or call 1-888-952-9105.

Banks bait-n-switch

The top four banks JP Morgan, Bank of America, Citigroup and Wells Fargo have plenty of money to lend, They are all advertising new record-low mortgage rates. At first glance, one would think those very attractive rates would spur on both home buying and refinancings.

The problem is consumers often find (once in the door) they can't access those rates and are instead either pushed to higher rates or told they do not qualify altogether. Two of every three mortgage refinancings over the last three years have gone to higher income households with the bulk of refinancings going to higher coupon loans.

How is it that the banks can now disqualify Americans from refinancing at lower rates and lower payments when they are currently performing on loans at higher rates and higher payments?

Even more appalling, mortgage rates should actually be lower than advertised. The spreads between the average national rate on the 30-year fixed mortgage and the 10-year treasury rate seen over the past 10 years has been 153 basis points. On Friday 10/14, the 10-year treasury rate was at 2.26%, while the average national mortgage rate advertised by the banks was at 4.17%, a shocking 191 basis point spread.

The average rate presented to consumers should now be more around 3.79%.

Banks push to expedite Florida foreclosures

Florida is among 26 states that requires banks to file foreclosures through the court system, a process that takes an average of 728 days to complete. In states where foreclosures aren't routinely handled by the courts, a foreclosure takes an average of 550 days to process, from default notice to repossession.

We don't want to be too quick to condemn the Florida judicial system.

One of the main reasons the foreclosure process has slowed here and elsewhere is because banks temporarily stopped adding cases to the court system about a year ago and pulled many others from the system when it became apparent that documents in some cases had been lost or illegally signed. Another reason is the delays are partially due to lenders not wanting to have the property on their real-estate rolls because they don't want to pay association fees.

Banks have also been criticized for agreeing to short-term, trial mortgage modifications for customers, only to later refuse to grant any kind of long-term solution for the strapped homeowners, many of whom are living in houses now worth half what they paid for them just a few years ago.

None-the-less, the Florida Bankers Association is pressuring state lawmakers to speed up the court process.  Legislators are answering by considering proposals that would divert noncontested foreclosures from the courts, allowing banks to handle them in much the same way they repossess cars. If such a measure became law, it would likely affect houses entering foreclosure after June 2012.

Housing Market Indicators

*month-to-previous-year comparison

Florida existing home sales: +15%

Florida existing condo sales: +17%

Florida existing home median price: $137,500

Florida existing condo median price: $91,900

Florida consumer confidence: 64

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*month-to-previous-month comparison; all housing types

National existing home sales: -3.5%

National existing home median price: $168,300

National (Freddie Mac) mortgage rate: (all housing types) 3.94%

Occupy Movement Meetups Everywhere

According to the Meetup.com website, the Occupy Movement is growing internationally. As of Thursday, October 13th, the website has listed 1,641 cities holding scheduled events in support of the Occupy Wall Street group in New York City.