Posted by kevin on March 15, 2010 under Foreclosure Blog | 
This was never an issue in the old days. Banks lent you money, and put the Note in their vault until you either paid off the mortgage or sold the property. Nowadays, banks sell your note and mortgage. Many times, the note and mortgage wind up in what is called a securitized trust.
What is a securitized trust? In simple terms, it is a financial product dreamed up by Wall St. to make lots of money. And for awhile, Wall St. did makes lots of money selling interests in trusts. How did it work? An investment company (either by itself or through subsidiaries) buy up hundreds or thousands of mortgage loans. The loans wind up in a trust. The investment firm or subsidiary files papers with the Securities and Exchange Commission stating that they are going to sell to the public interests in the trust. This is generally called an offering. The investment company sells the interests and takes out its money.
Read more of this article »
Posted by kevin on March 11, 2010 under Foreclosure Blog |
The Home Ownership and Equity Protection Act (“HOEPA”) is a part of TILA. It was initially enacted in the 1990’s. It applies to re-finances of first and second mortgages of the borrower’s principal dwelling. It usually does not apply to lines of credit. It does not apply to investment properties or second homes.
HOEPA is triggered by certain high interest loans where the APR exceeds by 8% the yield on a treasury security of comparable maturity (10% on secondary financing). HOEPA is also triggered by the charging of excessive costs and fees at closing (more than 8% of the total loan amount). These are commonly known as high cost loans. Although the concept is pretty straightforward, the calculation of these triggers requires expertise and experience.
Read more of this article »
Posted by kevin on under Foreclosure Blog |
The Truth in Lending Act, known as TILA, was enacted in 1968. TILA is primarily a disclosure statute.
TILA applies to individuals or businesses that offer or extend credit under the following circumstances:
- the credit is offered or extended to a consumer (as opposed to a business)
- the offer or extension of credit is done on a regular basis
- the credit is subject to a finance charge or is payable by a written agreement in more than 4 installments; and
- the credit is primarily for personal, family or household purposes.
Read more of this article »
Posted by kevin on under Foreclosure Blog |
The New Jersey Home Ownership Security Act of 2002, also known as NJHOSA, is a powerful, state statute which protects borrowers.
****NJHOSA applies to both purchase money mortgages (when you buy your home) and refinancings of no more than $350,000 as of the date of enactment, adjusted for inflation. Currently, the ceiling is $4
The loan must be primarily for personal, family or household purposes, in which the loan is secured by a one to six family dwelling which is occupied by the owner as a principal residence, or a manufactured home occupied by a borrower as his or her principal residence. So, NJHOSA does not apply to investment properties or vacation homes.
Read more of this article »
Posted by kevin on under Foreclosure Blog |
The New Jersey Consumer Fraud Act ( NJCFA ) is another powerful borrower tool in fighting predatory lending. The statute was enacted in the 1960’s and then amended to specifically cover real estate transactions. The statute has been around long enough to develop a substantial history of case law. And the case law, across the board, has been very favorable to consumers.
NJCFA prohibits unconscionable commercial practices, deception, misrepresentation, and the knowing concealment of a material fact. It does not matter whether the consumer is mislead. The onus is on the seller, or in this case, the lender. The cases say that the statute is to be liberally construed to protect the consumer- and that means YOU!
Read more of this article »
Posted by kevin on under Foreclosure Blog |
Bankruptcy still works for some people. If you own a home with or without equity, are not too far behind on your mortgage, have significant unsecured debt like credit card debt, and have a job, Chapter 13 may be a vehicle whereby you can keep your house, get rid of a second mortgage that is completely underwater , and discharge significant amounts of unsecured debt. But here s the kicker. You do not get to lower the amount due on the first mortgage for your principal residence. You pay the mortgage going forward to the lender. If you are in arrears, you can spread the arrears out over up to 60 months, and pay them off monthly.
Congress rejected an amendment to the Bankruptcy Code which would have allowed bankruptcy judges to modify first mortgages in a Chapter 13. Lobbying is alive and well.
For more information about bankruptcy, go to bankruptcy.kevinhanlylaw.com.
