Foreclosure Prevention Business

The State of New York Mortgage Agency announced Thursday expanded eligibility requirements for its “Keep the Dream” refinancing program, which helps borrowers in adjustable rate, interest-only or other non-conventional mortgages refinance into 30-year or 40-year fixed-rate mortgages.

New York saw one foreclosure for every 1,355 households during November, RealtyTrac reported today.

The program, originally launched in July, now considers owners of two- to four-family homes; has lower FICO credit score minimums, including a 575 minimum for single-family borrowers; increases the number of participating lenders to 9 from six, with the addition of CitiMortgage Inc., Countrywide Home Loans Inc. and JPMorgan Chase; and has initiated a direct mail campaign to reach potential borrowers, SONYMA announced.

Maryland’s Homeownership Preservation Task Force issued a report recommending the creation of a “Homeownership Crisis Intervention Fund,” according to an announcement by Gov. Martin O’Malley, who established the task force in June and assigned it to find short- and long- term solutions to help troubled borrowers sustain homeownership.

In addition to providing a case-by-case intervention, the fund could expand options for refinancing or restructuring mortgages and help communities in or at risk of distress due to concentrated foreclosure activity. It would also strengthen and expand nonprofit financial and housing counseling services and improve the foreclosure process.

RealtyTrac said Maryland’s November foreclosure rate was one filing for every 727 households.

Dominion East Ohio announced it donated $50,000 to the Cuyahoga County Foreclosure Prevention Program. The funds will be used to assist seven counseling organizations that, among other activities, renegotiate loan terms with mortgage lenders.

The foreclosure program, established in 2005, provides assistance to borrowers in danger of foreclosure or already in the foreclosure process.

Among the seven organizations to benefit from the funds are Cleveland Housing Network, Community Housing Solution, Neighborhood Housing Services of Cleveland, East Side Organizing Project and the Spanish American Committee. Also benefiting from the donation are Legal Aid Society, The Housing Advocates Inc. and United Way 2-1-1 First Call for Help Program.

Ohio’s foreclosure rate in November was one filing for every 307 households — the third worst of all states, RealtyTrac’s data indicated.

Meanwhile, MRG Document Technologies said it is providing modification agreements as part of its loan document library to enable lenders to be in compliance with state and federal regulations and give them flexibility to restructure loan terms and conditions. MRG’s most common modifications include changes to note and security agreement rates and terms, as well as ancillary services that combine disclosures and recording documents.

Equifax Inc. reported today that it launched a loan modification solution that analyzes income and employment, creditworthiness and equity position data to help servicers determine who qualifies for the recently announced subprime rate freezes touted by the Bush administration.

Rep. Joe Baca, D-Calif., seeks to provide emergency relief to refinance the loans of borrowers in foreclosure or default through a bill he introduced in November, H.R. 4135, or the Family Foreclosure Rescue Corporation Act.

Eligible borrowers would be those who occupy their homes and are unable to amortize their debt elsewhere, including those whose mortgages exceed the value of their homes. The corporation would buy the loans and replace them with affordable 30-year, fixed-rate mortgages, with a rate not exceeding 7.5 percent annually. The corporation would be able to sell as much as $150 billion in bonds for three years to obtain funds for the loans and then would then liquidate and return the proceeds to the Treasury, according to the bill’s text.

The same month Baca introduced the bill, a total of 12,282 California properties, with a loan value of $4.9 billion, sold at auction, a slight decrease from the number in the previous month but a 432 percent upswing from a year earlier, ForeclosureRadar reported Friday. The group’s California Foreclosure Report additionally showed the properties are selling at significant discounts. The average lender discount was $48,000 in November, up from $9,000 at the beginning of the year, and the percentage of sales being discounted doubled to 66 percent.

The Consumer Credit Counseling Service of Greater Atlanta Inc. announced that most of the borrowers who turn to its services for assistance are currently delinquent on their loans, having missed payments due to a variety of reasons, including reduced income to large medical expenses.

CCC outlined four common solutions it explores with lenders for delinquent borrowers who desire to stay in their home.

Among the solutions are a repayment plan that requires the normal payment each month plus an additional amount approved by the lender for a period of three to 24 months. This is the most common option for borrowers one to three months delinquent. Another is forbearance, which allows delays to or reduces a payment typically for borrowers who have experienced a major financial setback but can prove they can resume making their regular monthly payments in the future.

Loan modifications are another common solution, while a Federal Housing Administration partial claim brings FHA borrowers who are four to 12 months delinquent current by securing past due principle, interest, taxes and insurance into a second loan that is payable after the original mortgage is paid off.