Foreclosure options foreclosure solutions homeowner associations

Julie Boyd Certified Homeowner Advocate

1(888)668-9680 ext 201

BRE # 01051535

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Homeowner Must Know Laws Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

1. California Homeowner Bill of Rights 2. $25 Billion Dollars Mortgage Se@lement Average California Principal ReducHon: $200,000

3. How to Deal with Mortgage Debt Relief Act Expiring 12/31/2012 4. Current laws in place for distressed homeowners www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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THE FORECLOSURE CRISIS IN CALIFORNIA Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Since 2008, over 1,200,000 California homes have been foreclosed upon. § In 2011, 257,664 families received noHces of default, the first step in the foreclosure process. § An addiHonal 118,000 California families lost their homes through short sales that year.

Ø This year approximately another 700,000 California households are reported to be in the foreclosure pipeline. www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Julie Boyd

Certified

California’s Homeowner Bill of Rights -­‐-­‐2018

$25 Billion Dollars Mortgage SeJlement-­‐-­‐2015

Homeowner

Advocate

1(888)668-9680

ext 201

Is a package of bills not just the secHon that we are going to focus on today, where homeowners will use to try to save their homes. For example it has a secHon to protect tenants on foreclosed tenant is 90 day noHces on foreclosed property, give grand jury power to a@orney general to go across county to chase aXer foreclosure scammer.

It does not over throw anything substanHve contract right between investor and the service. BUT it does include very strict procedures and rights for homeowners before foreclosure.

This was model aXer the $25 Billion Dollars A@orney General Se@lement – which is effecHve another 3 years or so BUT the CHBOR will remain unHl 2018 and some porHon will be an indefinite future.

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California’s Homeowner Bill of Rights: Purpose Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Civil Code §2923.4: “…to ensure that, as part of the non-­‐judicial foreclosure process, borrowers are considered for, and have a “meaningful opportunity” to

obtain, available loss mi6ga6on op6ons (include short sales), if any, offered by or though the borrower’s servicers, such as loan modifica?ons or other alterna?ves to foreclosure…” (emphases added) www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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The Smith Family

is at risk for defaulRng on her home loan.

JulieBoyd Real Estate Attorney & CEA 1(888)668-9680 ext 201

UNDER THE CURRENT LAW, Californians like Smith don’t know who to call at their bank, and oXen end up having to re-­‐explain their situaHon to several representaHves.

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THE HOMEOWNER BILL OF RIGHTS requires that bank provide a single point of contact to borrowers at risk of default: someone who is responsible for helping them avoid foreclosure.

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The Smith Family

is in the process of geUng a loan modificaRon. Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Under the Current Law, the bank can sHll foreclose on their home even as their applicaHon is being reviewed, in a procedure known as dual tracking.

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THE HOMEOWNER BILL OF RIGHTS restricts dual tracking. The Smith family’s home will be safe from foreclosure unHl a decision is reached on their applicaHon.

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Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Highlights:

Modeled on AG Se@lement Agreement servicing standards, but not idenHcal

Heightened pre-­‐foreclosure outreach and communicaHons requirements

AnH-­‐dual tracking requirements

Heightened documentaHon requirements

Private right of acHon

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DefiniRons and Exclusions Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Key Exclusions/Limita6ons § Only applies to first liens on owner-­‐occupied, 1-­‐4 unit properHes

Borrower is going to mean: Only applies to first liens on owner-­‐occupied, 1-­‐4 unit properHes. –this mirror HAMP –Home Affordable Mortgage Program.

In the CHBOR you will find the phrase: Foreclosure preven6on alterna6ve—applying to means the 1st lien holder; which includes short sales or any other available loss miHgaHon. SO VERY BROAD!!!

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SPOC—Key Component

One of the key component is a single point of contact of this Bills. The experiences of homeowners been gegng bounce around from staff person to staff person and really there was no consistency.

Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Single Point of Contact (SPOC)(§2923.7) § Triggered by borrower’s request for foreclosure prevenHon alternaHve § Allows for a team vs. a specific person § Specifies responsibiliHes: SPOC is responsible for the

communica6ng the process to the homeowners, the process which the homeowners can apply for a loan mod or foreclosure alterna6ve or the deadline for any of the op6on.

§ Communicate to borrower the Process/Deadline § No more different answers! § Does not expire – remained assigned unHl all opHons exhaust § Small servicers exempt (≤175 foreclosures in prior annual reporHng period per §2923.18(b)) § Enforceable by PRA www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Pre-­‐NOD (Before Foreclosure Starts) Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Pre-­‐NOD Outreach Requirements:

These lenders must send in wriHng a statement legng the borrower know that they have the right to request a copy of the promissory or other evidence of indebtedness, copy of deed of trust, a copy of any assignment of mortgage or deed of trust or payment history. -­‐-­‐-­‐-­‐So UnHl 2018, a mortgage servicer may not record a noHce of default unHl the borrower is told of their right to request documents providing the mortgage servicer’s right to foreclosure.

§ Wait 30 days a^er either establishing “iniHal contact” or saHsfying “due diligence requirements” AND § Complete the applicable first lien loan modificaHon review process if borrower has submi@ed a “complete a applicaHon” § Include a declaraHon of compliance or exempHon with NOD –or, unHl 1/1/18, with NOS if NOD already recorded § Enforceable by PRA

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AFTER-­‐-­‐ Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

NOD

Ø Send noHce 5 business days aXer NOD recorded (§2924.9) § Within 5 days of recording a^er the NOD recording; server has to send out a wri`en no6ce about foreclosure preven6on alterna6ve. -­‐-­‐Advise of foreclosure prevenHon alternaHves and applicable procedures § Small servicers exempt § Sunsets 1/1/18 § Enforceable by PRA

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AnR-­‐Dual Tracking Provisions Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

AnH-­‐Dual tracking provision is a good thing—good protecHon for homeowners-­‐-­‐-­‐This is how it works:

If borrower submits a “complete applicaRon” for a first lien loan modifica6on offered by or through servicer, servicer may not record NOD, record NOS or conduct a scheduled foreclosure sale while the applica6on is pending and un6l servicer provides a wri`en determina6on and wait 30 days a^er that wri`en determina6on.

The borrower will get a wri@en explanaHon either way. This rule so important that you sue lender for TRO if they don’t comply.

Ø Basic an6-­‐dual tracking rule § If borrower submits a “complete applicaHon” for a first lien loan modificaHon offered by or through servicer, servicer may not record NOD, record NOS or conduct a scheduled foreclosure sale (as applicable) while applicaHon is pending and unHl servicer provides a wri@en determinaHon. § Need a wri@en explanaHon § Enforceable by PRA www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Dual Tracking – 30 Days Wait if Denied Ø Large servicers –no NOD/NOS/sale unHl: § 30 days aXer date of wri@en denial noHce (appeal period); or Julie Boyd § If borrower appeals a denial, 15 days aXer denial of appeal; or Certified § If offered a first lien loan modificaHon, at least 14 days aXer offer if Homeowner borrower doesn’t accept Advocate § If there is an appeal of the deny; then absolutely bank has to wait 1(888)668-9680 another 15 days before foreclosure or take the next step toward ext 201 foreclosure. So let says homeowner is deny and you dispute and say the income is higher and the servicer come back say well even with that higher income you don’t qualify…so now from this date…bank has to wait 15 days before the next foreclosure step because deny can be incorrect for borrower to address the incorrectness. Ø Small servicers § No req’d appeal period or specific Hmelines Ø AXer 1/1/18 But aXer 1/1/2018-­‐-­‐-­‐no regulaHon -­‐-­‐-­‐ no nod protecHon….no waiHng period …. No brakes put upon foreclosure.

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AnR-­‐Dual Tracking – if approved Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø If borrower is approved in wriHng for a foreclosure prevenHon alternaHve… Ø Pre-­‐NOD: § Servicer cannot record NOD while borrower complying with terms of the offer or all parHes have approved in wriHng Ø Post-­‐NOD: § Servicer cannot record NOS or conduct sale while borrower complying with terms of the offer or all parHes have approved in wriHng Ø Transfer of servicing: Carry-­‐over § Transferee servicer must honor the agreement between transferor servicer and borrower [sunsets 1/1/18] –chase to na?on star –agreement is good to na?onal star Ø Must provide copy of fully executed agreement [small servicers exempt; sunsets 1/1/18] Apply to Short Sale

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Review Process-­‐5 days a`er receipt—a`er applicaRon Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Wri`en Acknowledgment Le`er(§2924.10)

Ø Triggered by receipt of applicaHon OR “any document in connecHon with a first lien modificaHon applicaHon” Ø Must be sent 5 business days aXer receipt Ø Must include (Meaningful Opportunity – can’t say within 24 hours)

§ DescripHon of the process and esHmated Hmelines § Any deficiency in the borrower’s applicaHon § Borrower deadlines, incl. to submit missing documentaHon § ExpiraHon dates for submi@ed documents

Ø Small servicers exempt; sunsets 1/1/18 Ø Enforceable by PRA

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Review Process – Denial LeJer Requirement– No wasted Rme Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Denial Le`er(§2923.6(f)) Ø “Following the denial” –no specified deadline to send Ø Must include informaHon about appeal process Ø Must idenHfy the reasons for denial, including: § If based on investor disallowance, the specific reasons for the investor disallowance § If the result of a net present value calculaHon, the monthly gross income and property value used to calculate the net present value and offer to provide all of the inputs used upon wri@en request § If applicable, a finding that the borrower defaulted on a previous loan modificaHon offer § If applicable, a descripHon of other available foreclosure prevenHon alternaHves with instrucHons § If borrower already approved for another foreclosure prevenHon alternaHve, relevant instrucHons Ø Small servicers exempt; sunsets 1/1/18 Ø Enforceable by PRA www.certifiedhomeowneradvocates.com

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Accuracy of Documents—No more Robot signing

Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Foreclosure documents must be “accurate and complete and supported by competent and reliable evidence”

Servicer must “ensure that it has reviewed competent and reliable evidence to substanHate the borrower’s default and the right to foreclose” before recording or filing foreclosure documents

Enforcement

Enforceable by PRA

“MulHple and repeated uncorrected violaHons” subject to civil penalty of $7,500 per DOT [sunsets 1/1//18]

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Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Trustee sales Postponement

Amendments to Non-­‐Judicial Foreclosure Procedures (§2924)

Servicer must provide wri@en noHce to borrower within 5 business days when a scheduled sale is postponed by more than 10 days [sunsets 1/1/18]

Not enforceable by PRA

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Enforcement and Remedies

TRO

Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Injunc6ve relief -­‐>So before sale you can sue to raise the viola6ons you want to allege before the final act of trustee sale. But be aware that all other state law are s6ll valid but under CHBOR it draws a line in the sand that says before the trustee sale. Ø Damages (Actual or $50,000 IntenHonal) Ø Money damage is available for material viola6on.

Ø A`orney fees/costs to prevailing borrower Ø Court may award Ø If you win you may award a@orney fees to you. www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Traps for the Unwary Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø “Complete applicaHon” à whatever the servicers deemed. Ø Timelines for noHces Ø Acceptance of offers à communicates acceptance ASAP Ø Prior applicaHons, reviews or denials Ø Has the process been exhausted? Ø Did borrower have a “fair opportunity” to be evaluated? Ø What is a “material change”? à change in income

Ø Effect of default on a prior modificaHon Ø Pending foreclosure sale www.certifiedhomeowneradvocates.com

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$25 Billion Dollars Mortgage SeJlement Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

The Servicer Se@lement is the product of sixteen months of intensive negoHaHons between the five largest banks and an unprecedented coaliHon of state a@orneys general and federal agencies, including the Departments of JusHce, Treasury, and HUD, that spanned parHsan lines.

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Background: The 2010 Robo-­‐Signing Scandal Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

In September 2010, many of the naHon’s largest mortgage servicers suspended foreclosure aucHons because it was becoming more apparent that their employees had submi@ed affidavits that were “robosigned” and that were not based upon personal knowledge.

• For much of 2011, foreclosure filings in judicial foreclosure states declined because of the robosigning scandal; but, according to RealtyTrac, foreclosure filings are beginning to increase.

• The 49 State AG Se@lement Agreement “se@les state and federal invesHgaHons finding that the country’s five largest loan servicers rouHnely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these pracHces violate the law. ” •

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25 Billion Dollars Mortgage SeJlement Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

How will I know whether this se@lement affects my situaHon?

Only homeowners in the states who joined the se@lement are eligible for benefit under this se@lement. Borrower from Oklahoma will not be eligible for any of the relief.

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Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

$25 Billion Dollar Mortgage Se@lement • February 2012 and 10/3/2012 implemented • Largest Mortgage Se@lement Ever in History • What does it means:

– Underwater house and on those on the brink of foreclosure might be able to keep house

• 1/1/2008 to 12/31/2011 foreclosed • Money for bank to encourage short sales www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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$25 Billion Dollars AG Se@lement Who does the Se@lement apply to: • So banks were sued and they lost and these 5 servicer has to pay $25 Billion Dollar to homeowners.

• Bank of America • JPMorgan Chase • Ally/GMAC • CiH • Wells Fargo www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Government-­‐sponsored enterprises-­‐-­‐ GSE loans are not eligible • For Fannie Mae & Freddie: – If serviced by one of the five, must abide by the new servicing guidelines – BUT Fannie & Freddie mortgages, even if serviced by one of the five, are not subject to se@lement provisions pertaining to principal reducHon

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Breakdown of the $25 Billion • $10 Billion Principal reduc6on: At least $10 billion will be dedicated to reducing principal for borrowers who, as of the date of the se@lement, owe more on their mortgages than their homes are worth and are either delinquent or at imminent risk of default.

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Why force banks to forgive large por6ons of peoples’ loans?

• The states and federal agencies established that the servicers have done wrong – through improper lending pracHces, improper foreclosures, etc. – and in response the banks have agreed to a se@lement that helps many homeowners who have been hurt by misconduct in the marketplace.

• California average principal reducHon is $200,000 www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Principal ReducHon Eligibility Criteria • 1. In default –Delinquent by at least 60 days as of 1/31/2012 • 2. Underwater • 3. Have not defaulted on payment under a HAMP • 3. Ownership of loan – No Fannie/Freddie or FHA Hud/VA – Wells Fargo, CiH, & GMAC • Servicer-­‐own loans

– Bank of America and Chase • Servicer-­‐owned loans • Investor-­‐owned loans with delegated Authority www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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st 1 Lien Principal ReducHons

• Bank of America – Mandatory solicitaHon of certain group of borrowers (60 days default as of 1/31/2012 and other criteria) – Borrower in bankruptcy will solicited through their counsel if they represented

• Wells Fargo, Chase, CiH, & Ally/GMAC – Not subject to the same solicitaHon requirement as BOA

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BOA Principal ReducHon • Your current mortgage payment is 25% or more of your gross monthly income.

• You owe more on your first mortgage than your home is worth.

• You were delinquent by at least 60 days as of January 31, 2012.

• You have not defaulted on payments under a HAMP or HAMP-­‐ style loan modifica6on.

• Your mortgage is owned by Bank of America or part of a Countrywide securi6za6on that Bank of America has authority to modify principal.

• Bank of America is not prohibited or prevented by law or contract from solici6ng or providing you with a modifica6on.

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nd 2 lien principal reducHons

• Bank of America – Sending salutaHon to eligible borrowers – Borrowers in bankruptcy are being solicited,

• Wells Fargo, Chase, CiH, and Ally/GMAC – Second lien modificaHon programs vary but primary occur when 1st lien is modified under the Se@lement by them or another se@lement bank

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Breakdown of the $25 Billion • $3 Billion will be dedicated to a refinancing program for borrower who are current on their mortgage but who owe more on their mortgage than their homes are worth.

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To be eligible for refinancing you must meet the following requirements: Loan Serviced and Owned by the Same Bank Underwater Current Minimum Interest Rate-­‐-­‐Your current interest rate must be greater than or equal to 5.25%.

• Maximum Unpaid Balance • • • •

– One unit – $729,750 Two units $934,200 Three units – $1,129,250 Four Units – $1,403,400

• Loan Originated Prior to January 1, 2009 www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Refinance Program • Mandatory SolicitaHon refinance program for servicer—owned first lien of current underwater borrowers.

• Refinanced is really streamlined modificaHon to reduce interest rate.

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Breakdown of the $25 Billion • $7 billion to other forms of relief, including forbearance of principal for unemployed borrowers, anH-­‐blight programs, short sales and transiHonal assistance.

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Breakdown of the $25 Billion • $5 Billion to State and Federal government.

• Wrongful foreclosure from 1/1/2008 to 12/31/2012.

– Approximately $1.5 billion of the se@lement funds will be allocated to compensaHon to borrowers who were foreclosed on aXer January 1, 2008 and before Dec. 31, 2011.

• Legal aid, fund housing counselors, etc www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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How do I know if I am eligible for payment as a foreclosure vic6m?

• Your loan went to foreclosure sale between January 1, 2008 and December 31, 2011.

• The loan was serviced by one of the five mortgage servicers parHcipaHng in the se@lement.

• The borrower made at least three payments on the loan.

• The borrower lived in or intended to live in the property at the Hme of originaHon of the loan.

• The property was a one-­‐to-­‐four unit residenHal property.

• The unpaid principal balance of the first-­‐lien mortgage loan did not exceed $729,750 for a one-­‐unit property; $934,200 for a two-­‐unit property; $1,129,250 for a three-­‐unit property; or $1,403,400 for a four-­‐unit property. www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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The process • These big 5 are going through their loan and figuring out which loans are which and which qualify.

• These bank do get credit for principal reducHon. • So reach out to your servicer • Happening within the next 3 years. 10/3/2012 was the date for the big 5 to get in order. www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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For borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.

Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

NaHonal Mortgage Se@lement Administrator will mail NoHce Le@ers and Claim Forms in late September through early October 2012 to those borrowers who lost their home due to foreclosure between January 1, 2008 and December 31 2011 and whose loans were serviced by one of the five mortgage servicers that are parHes to the se@lement. Borrowers who receive payments will not have to release any claims and will be free to seek addiHonal relief in the courts.

You can contact the Na6onal Mortgage Se`lement Administrator at 1-­‐866-­‐430-­‐8358.

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Where to go for Help (Business CARDS) Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ally/GMAC: 800-­‐766-­‐4622 Bank of America: 877-­‐488-­‐7814 CiH: 866-­‐272-­‐4749 JPMorgan Chase: 866-­‐372-­‐6901 Wells Fargo: 800-­‐288-­‐3212 www.naHonalmortgagese@lement.com h@p://californiamonitor.org

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Mortgage Debt Relief Act • Expire 12/31/2012 • 2 million COD • Example: • $500,000 – mortgage • $300,000 – short sales • $200,000 – COD

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NO COD • Non-­‐Recourse debt • Insolvency • Bankruptcy

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California’s AnR-­‐Deficiency Statutes Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø CCP Sec. 580d: Homeowner has no post-­‐ fc liability to a lender who uses the non-­‐ judicial process to foreclosure § Note re: judicial foreclosures

Ø CCP Sec. 580b: Homeowner has no post-­‐ fc liability on purchase money loans for a primary residence of 1-­‐4 units

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California’s Short Sale AnR-­‐ Deficiency Statute Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø CCP Sec. 580e: Homeowner has no liability to a lender who consents in wriHng to a short sale of a 1-­‐4 unit dwelling. § Not retroacHve § “No deficiency shall be owed or collected” (emphasis added) § EffecHve 7/15/2011

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Assessing Homeowners PotenRal Deficiency Liability Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Is there a deficiency? Ø Purchase money? § 1-­‐4 unit? § Primary residence?

Ø Was there a foreclosure? Ø Was there a short sale? www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Property Tax and HOA Debts Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Unpaid property taxes run with Htle to the property – no personal liability for owner aXer foreclosure (or short sale) Ø Unpaid HOA fees are a personal debt of the owner – owner remains personally liable even aXer foreclosure (or short sale – unless there is an agreement for buyer to assume the HOA debt) Ø This is where a Short Sale can really assist a homeowner in truly se@ling their debts.

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Legal Strategies for Addressing Post-­‐Foreclosure Debt CollecRon Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø CA anH deficiency statutes § Short sales § Purchase-­‐money loan (primary residence only)

Ø Fair Debt CollecHon Act violaHons Ø UCL/common law claims Ø Bankruptcy www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

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Search “julieboydhomes@gmail.com”

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Have Your AssociaRon Manager call 1(888)668-­‐9680 ext 201 Julie Boyd Certified Homeowner Advocate 1(888)668-9680 ext 201

Ø Please have your associaHon manager call me at 1(888)668-­‐9680 ext 201 for presentaHons on these pressing issues facing your homeowners.

www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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Credits: • Julie Boyd, SFR, CDPE, CerHfied Homeowner Advocate, CerHfied Expert Advisor, LegislaHve Liaison & Frequent Keynote Speaker for AAREA, NAHREB, CDPE, Wells Fargo and Chase. Founder of RETHINK Short Sale SoluHons.

• Paul Horn, CPA and A@orney • Copyright, TM 9/22/2013 www.certifiedhomeowneradvocates.com www.RETHINKShortSaleSolutions.com

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