During the recent election campaign, President-Elect Obama called for a 90-day memoriam on foreclosures to give homeowners more time to find a solution. The thinking behind the proposal is that rampant foreclosures will only deepen the economic crisis.

However, according to an article in American Banker, the plan has mortgage servicing companies nervous. No surprise that they oppose the plan - after all, they will suddenly have less money coming into their coffers and be prohibited from taking back homes.

Some lenders, such as JP Morgan Chase, have temporarily stopped foreclosing on homes. Chase has pretty deep pockets and can afford this largesse, but the smaller lenders and servicing companies are the ones that stand to lose the most in the event of a mandatory federal moratorium.

The hope among the smaller companies is that the voluntary suspension by the larger lenders will be enough to stave off federal intervention.

But let’s not think for a moment that JP Morgan Chase is playing “good cop,” or acting out of corporate benevolence. If foreclosures stop then the bank doesn’t need to worry about having huge inventory of houses on the corporate books. In addition, letting past due balances pile up gives mortgage companies the ability to tack on continued late fees and other default-related fees - the bread-and-butter of the mortgage servicing industry.

So is a 90-day moratorium a good idea? Probably not in the long run, though it’s an easy sell to the public. 90 days doesn’t give a homeowner a ton of time to get out from under the crushing mortgage debt, and it lets servicers jack up the mortgage balance significantly.

A better idea? Homeowners should face the problem head-on and consider foreclosure defense, workouts and Chapter 13 bankruptcy.

In an effort to keep the economic system from getting any worse, the Federal Deposit Insurance Company (FDIC) has unveiled a plan to prevent 1.5 million homes from going into foreclosure by offering to share the losses that lenders typically experience when they refinance a home. According to FDIC chairwoman Sheila Blair, the $24 billion price tag for the plan would be financed with the money from the $700 billion bailout plan.

The plan still has some hurdles to overcome. For instance, Treasury Secretary Henry Paulson has dismissed it as a “subsidy or spending program” and said that the bailout is “investment, not spending.” However, the FDIC is moving forward with its plan and has posted the outline of the plan on its website.

The intent of the plan is to make mortgage modifications more attractive to lenders. Historically it’s been nearly impossible to get a mortgage lender to voluntarily renegotiate the terms of a mortgage. Why? Because the homeowner typically interacts solely with the mortgage servicer - the company that collects payments. The servicers work under strict agreements with the owners of the loans, and there is typically very little they can do on their own.

The FDIC plan comes shortly after fears within the mortgage servicing companies of a 90-day federal moratorium on foreclosures. The fears expressed by lenders involve the very thing the FDIC hopes to minimize: the losses incurred when loans are renegotiated.

The FDIC plan is now nothing more than a proposal, and one with obstacles to overcome. However, it does represent hope for some homeowners.

But if you’re having problems paying your mortgage, don’t wait for the FDIC plan to go into action. Remember - even if the plan goes into action you may not qualify for their assistance.

Be proactive. Contact a qualified foreclosure attorney who can help you work through your foreclosure problems.

During the height of the housing boom, getting a home loan was easy. Lenders offered attractive incentives like low down payments and low initial interest rates. However, once the bubble burst, housing values plummeted as obtaining a loan became increasingly difficult. Now, many homeowners that took advantage of the lending boom have found themselves living in homes that are worth less than they owe on them.

Since they are falling behind on the mortgage and they cannot recover the money by selling, an increasing number are opting to let the bank take the home in foreclosure. Called walking away, this may not be the best course of action.

Someone considering letting the lender foreclose and simply walking away from the property may not have considered all the effects that a foreclosure can have. Having a foreclosure on your record may make it harder to get a new mortgage for at least five years. There is also the effect of foreclosure on your credit score to consider. With loans being much harder to get even for the best qualified consumers, you need to protect your credit rating at all costs.

Walking away from a home because you don’t like owing more on your home than the current market value is a bad idea. Home values rise and fall periodically - after the current market conditions have stabilized they will likely rise again. If you walk away now you’re locking in your losses rather than possibly reaping gains in the future.

Of course, if you can’t afford to make the mortgage payments then you may decide to walk away. But before you do, be sure to contact an experienced foreclosure lawyer to help you determine your best option.

It seems as though it’s getting more difficult to make ends meet. Homeowners are being forced into foreclosure in record numbers. If you’re one of them, or think you might be in the near future, you’re probably wondering what to do.

Just the word “foreclosure” conjures images of despair and desperation for many. However, much of the fear is brought about because so few homeowners understand how a foreclosure works. This is why it’s a good idea to consult with an experienced foreclosure lawyer if you are facing foreclosure.

Most people are under the impression that if they’ve fallen behind on their mortgage payments, there is no alternative but to accept foreclosure as an inevitability.

But the worst thing to do in a foreclosure case is nothing. Why? Because an experienced foreclosure lawyer can review the case, help you mount a defense, and put you in a better legal position. Whether there are problems with the loan itself, overcharging by the bank or just the need for a steady and in negotiations, a lawyer can guide you effectively.

Besides representing you in court during foreclosure proceedings, an experienced foreclosure lawyer can also help you find an alternative to foreclosure.

If you’ve been presented with foreclosure papers, all is not lost. Contact me for a free phone consultation to discuss your options.

Times are tough. The foreclosure rate is up and many people are trying to refinance their homes before the lender that owns the mortgage can foreclose.

In your haste to refinance, be aware of the increasingly abusive practices of predatory lenders in the mortgage industry.

This is a prime time for predatory lenders to seek out new customers. You don’t have to become one of them.

Predatory lending is the general term used to describe a loan which is based on collateral, such as a house or car, where the lender uses predatory or unfair lending practices. These abusive lending practices may include; taking advantage of uneducated borrowers by inaccurate or nondisclosure of terms and conditions, pressure to buy higher priced credit insurance, inclusion of unexplained settlement cost, risk based pricing and a total loan amount for more than the value of the home.

You should also be wary of lenders that ask you to leave signature lines unsigned. They can easily change the terms and conditions of your mortgage. Before you sign the final papers, make sure you check to see that nothing has been altered or changed. Some predatory lenders have been known to even go so far as to ask you to tell a “little white lie” on your application. Do not trust this type of lender under any circumstance.

The Federal and State governments have many laws to help prevent predatory lending. Twenty-five states have enacted anti-predatory lending laws - including New York. The Home Ownership and Equity Protection Act of 1994 is committed to identifying and protecting the consumer from possible predatory mortgage loans.

If you are in the process of financing or refinancing your home, you may want to seek professional help before you sign the final papers. An experienced lawyer can advise you of your rights and explain the terminology of the loan so that you understand what you are signing for.

Your home is perhaps the largest expenditure you will make in your lifetime. Buying a home is an emotional and stressful time; don’t let unscrupulous predatory lenders ruin it for you and your family.

Are you one of the thousands of people faced with tough decisions about your financial future? Are you behind in your mortgage payments and facing foreclosure? Are you trying to find an option that will work for you and allow you to keep your house and still make payments?

You could call your mortgage company and try to work a deal with them. Sometimes they will look into your payment options and are able to restructure part of the delinquent payments. But what often happens is that they tack a percentage of the missed payments onto your future payments making them considerably larger and harder to pay. Then if you miss another payment, you are again faced with the threat of foreclosure.

If your mortgage company is unable to help you, there is something called a mortgage assistance company. These companies can be a help or a rip off scam. If they are reputable companies, they can offer you some relief but more often they charge you money to do what you could have done for yourself, which is call your mortgage company.

You could save the money that you would have paid a mortgage assistance company and talk to a bankruptcy lawyer.

You may be eligible for a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy may help you free up funds that could go toward your mortgage payment by reducing or eliminating some of your debts. Studies have shown that most homeowners would pay their mortgages if they only had the funds. It’s also possible that a Chapter 13 Bankruptcy could stop any foreclosure activity and give you a lot longer to catch up on your delinquent payments.

When you are faced with tough financial decisions concerning you home, don’t panic. Consider all your options carefully. An experienced bankruptcy lawyer will openly discuss your needs and options with you and guide you toward a better financial future.

The recent government bailout has spawned a new program called Hope For Homeowners. This program is designed to help as many as 400,000 struggling home owners who are facing foreclosure. While this is good news for some home owners, there are certain conditions that must be met to qualify.

The home you wish to refinance must be your primary residence - rental properties and second homes don’t qualify. You can’t own another home either. The monthly mortgage payment must be at least 31% of your monthly income and you had to have obtained the mortgage on or before January 1, 2008.

The program is entirely voluntary for both the lenders and borrowers.

In order for the program to work, the lender must agree to refinance the delinquent mortgages into a 30 year fixed loan at 90% value of the current market price. The current market price will be determined by an FHA approved appraiser. It’s possible that the interest rate may not change, but monthly payments will be lower due to the lesser current market values. Homeowners that currently have adjustable rate mortgages (ARMS) will now have a fixed monthly payment for the life of the loan.

The homeowner would be responsible for any closing costs as well as an up-front payment of mortgage insurance. The FHA will insure the new mortgages.

The Hope for Homeowners program went into effect on October 1, 2008 and will remain available until September 11, 2011.

Since this is a voluntary program, it will take time to see if the mortgage lenders are willing to participate. They would receive an FHA insured mortgage in exchange for accepting the reduced 90% mortgage refinancing. The lenders may wish to explore other measures, such as loan extensions and reduced interest rates, before they agree to absorb the costs of the reduced mortgages.

The term “lis pendens” is a Latin term that means “suit pending.” And that’s essentially what it is. A lis pendens is a formal notice that signals the beginning of the foreclosure process.

While a lis pendens means foreclosure proceedings are underway, the homeowner remains in possession of the property and retains the right to refinance or sell. The notice of default or lis pendens puts the property in a state of pre-foreclosure, where it will remain until it is sold. This amount of time varies greatly from state to state.

The filing of a lis pendens alerts lenders and buyers that the home’s title is in question and makes the property less marketable. This means that, should a homeowner wish to sell after the lis pendens is filed, he or she will possibly be offered a considerably smaller amount than the property’s actual market value.

There are investors that will buy homes with a lis pendens filed. The lis pendens gives investors an opportunity to buy the property at a considerably lower price than if they wait until the foreclosure proceedings are finished.

When a property that is being rented faces a foreclosure (http://en.wikipedia.org/wiki/Foreclosure), many owners wonder if they can continue to collect rent from the tenants. Once the notice of foreclosure is received, some tenants may balk at the idea of paying rent to someone who they believe is no longer the owner of the property. However, until the foreclosure proceedings have been completed, the tenant is still required to pay rent.

A notice of a pending foreclosure is just what it appears to be: a notice. It simply means that foreclosure proceedings have begun. The property remains under its present ownership until it is sold at auction. Until that time, nothing has changed and tenants must follow the rules and regulations contained in the lease, including the timely payment of rent.

If a property owned by a landlord should face a foreclosure, the best thing the landlord can do is address the tenants directly. He should explain in no uncertain terms that he will legally remain the owner of the property until it is sold at auction. He should also let the tenants know that he does not plan to void the lease by allowing the property to fall into disrepair and that they still have the legal obligation to pay rent.

Of course, many mortgages contain what is called an “assignment of rents” from the borrower to the bank. This means that if you fall into foreclosure, you may be required to turn over all rents received to the bank. Before spending that rent money, you should review your loan documents carefully to be sure that you are entitled to keep the money.

Homebuyers face scammers who try to take you for a ride. This sort of predatory lending practice has become all too common in recent years. Homeowners end up unable to pay their mortgage and usually end up facing foreclosure. However, the State of New York has made amendments to existing legislation that punishes those that practice predatory lending.

The new legislation places restrictions on what are considered “high cost loans.” The law defines a high cost loan as one that exceeds certain boundaries, such as if the total “points and fee” exceeds 5% for a loan over $50,000 or 6% for a loan less than $50,000. The amended law now prohibits certain loan practices, such as lending money without considering the homeowner’s ability to pay, financing points and fees that exceed 3% of the total loan, giving kickbacks to mortgage brokers, and several others. There are to be no more balloon payments on loans of less than 15 years in duration and lenders are now required to provide a list of financial counselors to the borrower prior to the loan’s approval.

Certain elements have been added that provide assistance to homeowners facing foreclosure. Lenders are required to provide a written notice to the homeowner 90 days before any foreclosure proceedings can begin. This time is to allow the homeowner time to come up with a way of preventing the foreclosure and prevents the homeowner from being blindsided. The amendments also require a settlement conference, where all involved parties must meet within 60 days of the proof of service being filed with the courts. The lender or a representing attorney must appear with authority to dispose of the matter. In these situations, the court can appoint an attorney if the homeowner cannot afford one.

In response to the predatory lending practices of the past, the State of New York has taken steps to help homeowners defend themselves against foreclosure. If you find yourself facing foreclosure, contact me immediately to set up a time to talk about your options.