We have the OFPTF Report, and I still had some questions. Lou Tisler of Neighborhood Housing Services of Greater Cleveland (NHSGC) has graciously provided some answers and comments.
Q:There seems to be a difference between the Bush Admin recommendations and the OFPTF Report recommendations, how will it be determined which ‘program/law’ is carried out in Ohio, would the Federal regs supersede Ohio’s if we are less stringent?
Answer: As for the difference between the state and the fed, I am not sure if pre-emption would apply since the feds are not writing this as a law, but as a “voluntary” action. As for the state, I believe that the state of Ohio continues to be much more proactive in addressing this crisis, as using such filters to make sure that it is those who are truly suffering from a trigger event or have been taken advantage of, rather than those who are of the mind set, such as some large corporations, “the government will bail us out”.
Q: There is a recommendation to ask mortgage providers to provide database lists of people who are in danger of getting to the foreclosure point. The notes in the T Force report say there are legal issues? This seems hard to overcome?
Answer: Being licensed in both first and second mortgages, this is definitely a privacy concern, as well as RESPA concerns. If the homeowner agrees to disclosure, then I think that it moves this point along, but I am not a lawyer, nor do I play one on TV.
Q: The ‘enforcement’ issue, which basically surrounds a few key points involving written notification of one sort or another. Am I understanding that denying these institutions projects within cities is the ‘carrot?’ are there other ways to do this?Answer: If you “choose” to follow the rules, then there are advantages. If you choose not to, then there are consequences. There are many more ways to do this, which are being investigated at all levels, not just at the state level.
Q: The Report, under the ‘legislation’ section, mentions ‘targeting of lease option scams. Can you fill me in on that because I am unaware of the issue?
Answer:These are where a company solicits someone in foreclosure to turn the property over to the company (almost a short sale/lease purchase), with heavy upfront fees, upon which the company then evicts their new tenant and has the property free and clear. Though not specifically addressed in this point, I would add the fee-for-service foreclosure prevention companies. As I have said before, you should never pay to have a third party intervene to assist in keeping your home.
Q: The list of things that need action (in the report) is long, what do you think is most critical?
Answer: Education/awareness – the most effective tool of foreclosure prevention Urban agenda issues – a competitive process to have municipalities, in a competitive environment, have access to capital to address vacant and abandoned propertiesTenants – what is happening to the tenants of land/slumlords-weekend real estate tycoons-Donald Trump wannabees that are being evicted because the person/corporation/LLC is being foreclosed upon (maybe not really in the report, but it was reoccurring).
I support all the recommendations because in my opinion they either all add to the tool box, lessen the foreclosure caseload, or address community needs.
Lou also had this to say:
“….a freeze is only good if those in bad loans change their financial philosophy and do what it takes to get to a point to refinance into a fixed rate loan, if possible. If you are in a bad loan today, and end up in a bad loan in five years, your still in a bad loan. As for those in foreclosure right now, this does nothing to help them, but it is supposed to lessen the front end of those going into foreclosure, which it may. As for the difference between the state and the fed, I am not sure if pre-emption would apply since the feds are not writing this as a law, but as a “voluntary” action. As for the state, I believe that the state of Ohio continues to be much more proactive in addressing this crisis, as using such filters to make sure that it is those who are truly suffering from a trigger event or have been taken advantage of, rather than those who are of the mind set, such as some large corporations, ‘the government will bail us out’…”
This next thing is a reprint of a Q and A Lou also sent me, answered rather well by Ruth Simon of the WSJ and it deals with the issue of what is sub prime anyway?
Who Qualifies for Help,
And What Qualifies as Subprime?
By RUTH SIMON
December 7, 2007; Page A14The mortgage plan outlined by the Bush administration should help some borrowers with subprime adjustable-rate mortgages. But other borrowers who are having trouble making their payments won’t qualify for the “fast-track” interest-rate freeze outlined yesterday. Here’s a look at the agreement:Which mortgages does the plan cover?The agreement covers only a subset of borrowers. These are borrowers who took out subprime ARMs that were originated between Jan. 1, 2005, and July 31, 2007, and whose interest rates will reset for the first time between Jan. 1, 2008, and July 31, 2010. It applies only to loans that have been packaged into securities and not those that are held by banks on their own books. Homeowners should call their servicer to determine if their mortgage is covered by the plan. It doesn’t apply to borrowers with subprime ARMs that have already faced their first rate reset. It also doesn’t cover loans that are seriously delinquent, fixed-rate mortgages or ARMs issued to borrowers with good credit.How do I know if I have a subprime mortgage?The agreement doesn’t provide a specific definition of subprime ARMs because it isn’t always clear. Typically, subprime ARMs carry a fixed interest rate for the first two or three years, then adjust annually. Borrowers who aren’t sure whether or not they have a subprime ARM can ask the company that collects their loan payments.What are mortgage companies doing for these borrowers?Mortgage companies are setting up guidelines for who may qualify for a fast-track program that would freeze the interest rate at the introductory rate for five years. Some borrowers who don’t qualify for fast-track may be eligible to refinance into a new mortgage, based on their credit score and the amount of equity in their home. Mortgage companies have been encouraged to “take all reasonable steps” to facilitate a refinancing.Who qualifies for the rate freeze?To qualify, borrowers must live in their home and face a payment increase of more than 10% when the rate on their ARM resets for the first time. The program is designed to help borrowers who aren’t good candidates for refinancing because of a poor credit score, have little or no equity in their homes or a history of late payments. To qualify for the fast-track program, borrowers must have a credit score of less than 660 and it can’t have improved by more than 10% since the mortgage was originated.What if I’ve missed a mortgage payment?Missing one mortgage payment won’t automatically disqualify borrowers from the program. Borrowers can’t have more than 60 days late more than once in the last 12 months.What if I can’t qualify for the fast-track freeze?Some borrowers may be able to refinance into Federal Housing Administration loans or other mortgage programs. Borrowers who don’t qualify for a refinance or who don’t meet the criteria for the fast-track program will be dealt with on a case-by-case basis by their mortgage-servicing company. In some cases, these borrowers may be able to obtain a lower rate or a reduction in the amount owed. Other options include a short sale, in which the house is sold for less than the amount owed with the lender forgiving the balance, or foreclosure.Whom should I call if I have questions?
Borrowers are encouraged to contact the mortgage-servicing company that collects their loan payments. They can also call 1-888-995-HOPE, which provides counseling to homeowners with mortgage problems.
Other Posts:
Ohio Task Force on Foreclosure Prevention Report
How Do We Handle The Mortgage Crisis?
Peace Out -3C
11 responses so far ↓
1 John Ettorre // Dec 11, 2007 at 10:05 am
Very interesting stuff, Carole, and how wonderful that you capitalize on Lou’s uniquely detailed grasp of these developments. Every homeowner, homebuyer and seller should have a Realtor as plugged-in and on top of things as you.
2 TimFerris // Dec 11, 2007 at 6:50 pm
I think that in speculating like this, we’re getting away from the present, from the problem at hand; that’s probably exactly what “they” want us all to do, because then we are dealing with what “isn’t.”
What “is” is that a lot of people are being forced out now. Boyko is in the present here. He is jamming an unfair process. He is saving people now. Lou should be saving those now in trouble, too.
Legislators are in the present, too, in Ohio in trying to get that HB 138 to the floor: It stipulates that the county be paid timely, among other things. Right now, we the people finance the foreclosures of our neighbors, extending financing to those doing the sloppy, unfair foreclosures.
Let’s quit focusing on those not yet in trouble and focus on helping those who are in the briar patch already, and getting their money and equity back, and then getting back the equity of those who have already been whacked, if we feel the need to get out of the present situation.
Fixing the matter at hand will automatically take care of the future. We won’t have to ask pundits to speculate about it any more.
3 Carole Cohen // Dec 12, 2007 at 12:10 am
A sad fact but true Tim, I hear you. The other sad fact about it is that with all the publicity about people being able to call their lenders and try to work something out, or even contacting organizations like Lou’s, most people are still not being pro active. It’s a shame. And the people who were truly ‘predated’ if that is a word, those are the ones that should be able to get even legal recourse now.
But the second point is, so many more people are still going to be added to the pool, we need to help them too, in my opinion. I agree that some of the legislation is aimed at current homeowners and that’s good. I don’t think we can afford to ignore either group. I also think people need to step up and contact someone for help!
4 John Ettorre // Dec 12, 2007 at 9:34 am
Congressman Barney Frank is heroically trying to push for legislation that would allow more homeowners more leeway in this and added protection to block foreclosures. Let’s hope it works.
http://financialservices.house.gov/foreclosuremanual.pdf
5 Lou // Dec 12, 2007 at 1:57 pm
Tim, I truly appreciate your “present” mindset and I really don’t want you to think that this post defines the limits of NHSGC. This is but only one facet of our involvement. It is great that Boyko has entered the fray at the present time, but we have been dealing with the present for a very long time. The Ohio Home Rescue Fund, adminstered by NHSGC is helping homeowners stay in their homes today; the ability to intervene on the homeowner’s behalf in advocating for refinancing, forebearance, principal reductions, loan modifications and other loss mit attactivities is happening right now (even though I’m in Portland, Ore); we have spent countless days on the hill pushing for federal involvement, including Frank, Schumer, Olver, Brown and others trying to develop and implement other tools to help those how are in this crisis right now (including $200M for counseling/education which is what really allows the loss mit activities that we are doing). These are just a quick example of delivering programs and services to those that are presently in this crisis.
For just a peek of what we are doing (and others like Treasurer Jim Rokakis, and Councilman Tony Brancatelli) read today’s Christian Science Monitor here:
http://www.csmonitor.com/2007/1212/p01s04-usec.html
I’m with you on the here and now, but since this crisis had been put on the shoulders of those with the least amount of resources, we need to try to stem the future onslaught of foreclosures, which I think Carole’s post demonstrates.
6 Lou // Dec 12, 2007 at 2:38 pm
This time difference is killing me, but here is another example, fresh off the presses.
On Monday, December 17, a press conference is being held by the organizations listed below to call for a “Foreclosure Holiday”, starting immediately and extending at least through mid-January. During this Holiday period, we’re asking our Common Pleas judges, our County Clerk of Courts and our Sheriff — the elected officials who actually operate the machinery of home foreclosure — to bring that machinery to a halt, at least for occupied homes. That means no actions on new filings, no hearings, no foreclosure orders, no Sheriff’s sales, and no evictions.
Declaring a Foreclosure Holiday will serve three important purposes:
1) It will allow hundreds, if not thousands, of our neighbors to remain in their homes through the holiday season.
2) It will send a strong signal to the mortgage industry that this community has had enough, and that “business as usual” — the ongoing destruction of our communities — will no longer be facilitated and enabled by County leaders.
3) It will create breathing space for County and community leaders to implement a long-term plan to stem the foreclosure flood: to work out more mortgage defaults before they lead to foreclosure filings, to reduce the percentage of those filings that result in Sheriff’s sales, to minimize vacancies and flipping and maximize the preservation of equity in our neighborhoods.
The Foreclosure Holiday press conference will take place at 10 am this Monday, December 17 at 3884 East 112th Street, a Mount Pleasant home whose owner is currently facing a foreclosure eviction. We welcome your organization’s participation. Please join us to show your support.
If you want your organization’s name included on the sponsoring list, or you need further information, please reply directly to bilcal@juno.com or call Bill at 216-870-4736.
Thanks.
Bill Callahan, on hehalf of the following organizations:
Neighborhood Housing Services of Greater Cleveland
Empowering & Strengthening Ohio’s People (ESOP)
Cleveland ACORN
Cleveland Housing Network
Cleveland Tenants Organization
Neighborhood Progress, Inc.
Cleveland Neighborhood Development Coalition
Housing Research and Advocacy Center
Legal Aid Society of Cleveland
7 Carole Cohen // Dec 12, 2007 at 2:47 pm
John thanks for the reminder about the Frank proposal….
Lou, the moratorium is short so I am liking it so plans can be put in motion. Very interesting, wonder if it will work
I am thinking this is one of those times when a massive effort to get people out of their fear zone and onto the phones taking care of business is in order. I’d help
8 Lou // Dec 12, 2007 at 5:55 pm
A quick one here, HB 138 that Tim refers to just passed through the rep side with only 2 voting no.
9 Carole Cohen // Dec 12, 2007 at 11:56 pm
Lou, when you get used to Pacific Time it will be time to come home!
I have one question: I can see violations/legal issues with release data. But if a mortgage company already has a loan agreement with someone, and they send a notice to them six months before their ARM is resetting, how is that violating anyones truth in lending rights? I don’t want to sound dense, but I think if I don’t get it there are more people who do not get it as well.
Thanks for the CSM article. And the Moratorium info.
10 Carole Cohen // Dec 14, 2007 at 9:39 am
You know, HB138 passed, and you can read about it in Callahan’s Diary here: http://www.callahansclevelanddiary.com/
11 links for 2007-12-11 | Brewed Fresh Daily // Jan 2, 2008 at 3:13 pm
[...] Ohio Foreclosure Prevention Task Force Q&A With Lou Tisler of NHSGC | Cleveland Real Estate New… [...]
Leave a Comment