Matthew T. Desrochers

Recent Foreclosure and Loan Modification Numbers

Massachusetts Bankruptcy — Tue, 13 Sep 2011 16:38:10 +0000

55,687 homeowners received permanent, proprietary loan modifications in July compared to 50,283 in June, an increase of 11 percent
Of proprietary loan modifications that were completed 80 percent (44,413) included reduced monthly principal and interest payments with 60 percent (33,302) receiving a reduction of more than 10 percent
87 percent (44,402) received fixed interest rate loans of five years or more
Monthly foreclosure starts declined in July with 185,076 starts recorded, compared to 194,310 in June, a decline of 5 percent
Completed foreclosure sales dropped from 72,570 in June to 64,578 in July, a decline of 11 percent

If you would like to learn more and/or receive assistance a bankruptcy, short sale, or a loan modification, please contact us today.

Is One Choice Better Than Another Regarding Foreclosure, Deed in Lieu of Foreclosure, or Short Sale?

Massachusetts Bankruptcy — Mon, 12 Sep 2011 16:37:51 +0000

Deed in lieu of foreclosure: one voluntarily gives their home to the lender in exchange for cancellation of their loan

Short Sale: where the lender allows the homeowner to sell their home for less than what is owned

Foreclosure: where the lender takes the home through a court proceeding

Is one choice better for your credit score than another?

No: All of the options come out to be about the same on your credit score because all of these events represent a loan default. Check out this chart showing how each of these items will affect credit scores at different credit levels.

However, lenders may look more favorably at a short sale than a foreclosure.

If you would like to learn more and/or receive assistance a bankruptcy, short sale, or a loan modification, please contact us.

Short Sale Numbers

Massachusetts Bankruptcy — Tue, 30 Aug 2011 16:45:32 +0000

Short sales increased 19 percent in the second quarter of 2011 and account for 12 percent of all sales nationwide
Distressed property sales, including foreclosure sales and short sales, accounted for 31 percent of all U.S. residential sales in the second quarter, down from nearly 36 percent in the first quarter but up from 24 percent from the same quarter last year
The average sales price for a distressed property was down less than one percent from the first quarter and down nearly five percent from the same quarter in 2010
Distressed properties typically sold for 32 percent below the average price of a home not sold in foreclosure
The average price for a home sold in a short sale was 21 percent below the average price of a non-foreclosed home, while the average price for a home sold in foreclosure was nearly 40 percent lower than a non-foreclosed home

If you would like to learn more and/or receive assistance a bankruptcy, short sale, or a loan modification, please contact us at (857) 244-1940 or fill out the form on the right.

I’ve Completed a Short Sale… Now What? Do I Owe Anything Else?

Massachusetts Bankruptcy — Tue, 30 Aug 2011 16:44:35 +0000

Deficiency: If after the short sale there is a deficiency between what you owed on your loan and what the house was sold for you may be on the hook for that amount, unless there is a written agreement otherwise. In addition, if this amount is forgiven and it was larger than $600 you may have to pay taxes on it.

Owed Back Taxes: You should be free and clear of them going forward because your escrow provider and/or title insurer have to clear those tax liens, making sure they are paid up to the date of closing, before they transfer clear title to the buyer.

Homeowner’s Association Dues: You may be responsible for all of some of your owed Home Owners Association fees. Sometime the bank will pay them or contribute to paying them and sometimes the Buyer will contribute. But there are many situations where the Seller will have to pay all of them.

2^nd and 3^rd Mortgages that expressly agreed to let the short sale go forward on the condition that the seller/former homeowner would agree to pay some or all of the outstanding balance over time.

A Few Downfalls of Short Sales

Massachusetts Bankruptcy — Tue, 30 Aug 2011 14:37:55 +0000

1. Your credit score will drop. Since you must be at least 90 days late in your mortgage payments your score will drop around 140 points.
2. If your bank decides to it can choose to sue you for the difference from the short sale and what you owe.
3. The bank gets the final approval on the sale and it can take them a VERY long time. Many times it’s so long that the potential buyer doesn’t wait out the whole process.

If you would like to learn more and/or receive assistance with foreclosure, loan modification, short sales or deeds in lieu of foreclosure, please contact us at (857) 244-1940 or fill out the form on the right.

Home Affordable Foreclosure Alternatives Program or HAFA Program

Massachusetts Bankruptcy — Mon, 29 Aug 2011 14:37:49 +0000

The HAFA program gives homeowners the option of a short sale or a deed in lieu of a foreclosure in order to help them avoid a foreclosure proceeding. There are many homeowners who are unaware of this program and if they are running out of options should think about this. It is generally said that these options will not hurt your credit score as much. However, be aware that recently participants are seeing their credit score hurt just as much. So why do this instead of a foreclosure then? Because it could still be potentially seen in a more positive light by a future lender.

The Senate is Looking into Foreclosure Fraud and How to Prevent It

Massachusetts Bankruptcy — Tue, 09 Aug 2011 20:30:54 +0000

Senator Patrick Leahy and Committee Member Richard Blumenthal are looking into “ongoing abuses and fraudulent practices by mortgage servicers are needlessly forcing foreclosures on families struggling to stay in their homes — slowing our economic recovery,” (Blumenthal). They are starting by requesting information from 11 leading mortgage services on the polices and practices that each company follows in regards to foreclosures.

In addition, they have introduced legislation to strengthen the tools available to the United States bankruptcy trustee to protect American homeowners from creditor fraud in bankruptcy court. Thus giving the trustees and bankruptcy courts more power to fight creditor fraud.

If you would like to learn more and/or receive assistance with foreclosure, Mortgage Audit, loan modification, bankruptcy or debt settlement, please contact us at (857) 244-1940 or fill out the form on the right.

What’s the Difference between Debt Settlement and Debt Counseling?

Massachusetts Bankruptcy — Mon, 08 Aug 2011 20:30:08 +0000

Debt Settlement

They negotiate with the credit card companies or collectors for generally a single payment (Can go up to 6 months) of which is for a percentage of what you owe.
This can be anywhere between 80% to 20% of your original debt.
They get their money in either a monthly payment plan or as a percentage of what they save you.
Plans generally take 2 to 4 years depending on the amount of credit and the amount of money you can put into the program.

Debt Counseling

They negotiate with the credit cards for a smaller payment plan
They provide educational services to teach you how to use your money
They get paid by an upfront fee and then they take a certain amount each month from what you put in
These plans can last 15 to 30 years.

. If you would like to learn more and/or receive assistance with foreclosure, Mortgage Audit, loan modification, bankruptcy or debt settlement, please contact us at (857) 244-1940 or fill out the form on the right.

Taxes on Debt Settlements and Short Sales

Massachusetts Bankruptcy — Sun, 07 Aug 2011 20:29:40 +0000

There are times when you have to fill out a Form 1099 and will have to pay taxes on that amount because you earned an “income” on your debts. For instance:

When you settle out a debt with a credit card company and the difference between what you pay and what you owed is greater than 600
When you go through a short sale and the difference between what you owed and between what the bank accepted is greater than 600

Sometimes if you are considered insolvent you will not have to pay taxes on your short sale or debt settlement. You will be considered insolvent if immediately before your short sale or debt settlement your liabilities are more than the fair market value of your assets. Just remember, unlike bankruptcy there are no exemptions to your assets you have to consider everything including: retirement accounts and insurance.

If you believe you were insolvent and shouldn’t have to pay taxes on your short sale or debt settlement, you’ll need to complete Form 982.

Beware of Mortgage Audits

Massachusetts Bankruptcy — Sat, 06 Aug 2011 20:28:45 +0000

Recently, there has been another scheme put into place by people that want to steal your money; they are called mortgage audits. The FTC and many Better Business Bureaus have been receiving complaints.

Yes, there are good mortgage audits. So how do you tell which ones are bad?

Upfront Fees
Promises to stop Foreclosures
Promises to speed up loan modifications
Promises to reduce your monthly payments
Instructions to stop talking to your lender
Don’t let a warning about using caution before picking a mortgage audit company fool you, many of the bad companies include this.

If you decide that you are interested in doing a mortgage audit, think about working with a lawyer. They may already be using a reputable company and your risk decreases significantly.