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HOPE NOW Planning Loss Mitigation Outreach Events Nationwide in 2015

Posted on September 13, 2018 by Safeguard

On April 1, DS News published an article discussing the announcement made by HOPE NOW to host several nationwide outreach events offering loss mitigation options to homeowners facing foreclosure.

HOPE NOW Planning Loss Mitigation Outreach Events Nationwide in 2015

HOPE NOW, an industry-created alliance of mortgage servicers, investors, counselors, and other mortgage market participants, has announced that it will be hosting several nationwide outreach events to offer loss mitigation options to at-risk homeowners.

So far in 2015, members of the HOPE NOW alliance have participated in two such events in Oakland and San Bernardino, both in California. At these events, homeowners at risk of foreclosure are typically reviewed for various foreclosure prevention options such as permanent loan modifications, repayment plans, or other retention solutions. When a home retention solution is not possible, other options are considered to avoid foreclosure such as a short sale or a deed-in-lieu.

According to HOPE NOW Executive Director Eric Selk, both California events hosted about 500 attendees each. Selk said that about 50 percent of attendees were delinquent on their mortgages and about 25 percent were unemployed. About 77 percent of attendees at the Oakland event were reviewed for a permanent home retention solution, compared to about 60 percent in San Bernardino.

Selk said HOPE NOW will be hosing similar events in Chicago, St. Louis, Ft. Lauderdale, Hartford, Memphis, and Los Angeles later this year.

“Additionally, we will host events requested by Congressional representatives and local leaders in other markets still recovering from the housing crisis,” Selk said. “In addition to our loss mitigation events, our members are working on new initiatives with us, such as community repair and loan originations, designed to further stabilize the housing market. We expect to roll out more detailed plans for these projects in the near future.”

HOPE NOW announced that from its creation in 2007 until the end of 2014, the mortgage industry has completed more than 23 million non-foreclosure solutions for homeowners, including 7.3 million permanent loan modifications. In January 2015, lenders and servicers offered homeowners another 158,000 non-foreclosure solutions, according to HOPE NOW.

Please click here to view the article online.

About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.

Homeowners Facing Foreclosure May Instead be Home Free

Posted on September 13, 2018 by Safeguard

On March 30, The Boston Globe published an article discussing cases around the country involving borrowers who have missed years of mortgage payments possibly keeping their homes without paying another cent due to the passing of the statute of limitations.

Homeowners Facing Foreclosure May Instead be Home Free

May be past deadlines

MIAMI — In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

The reason, lawyers for homeowners argue, is that the cases have dragged on too long.

There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey, and New York, where lenders must get judges to sign off on foreclosures. However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.

“No one gets a free house,” Judge Michael B. Kaplan of the US Bankruptcy Court in Trenton, N.J., wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” that he and others made during the foreclosure crisis.

But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his decision, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”

It is difficult to know for sure how many foreclosure cases are still grinding through the court systems since the financial crisis. It is even harder to say how many of those borrowers are still living in their homes.

Bank of America, for example, has initiated the foreclosure process on roughly 20,000 mortgages that have not been paid in at least five years. The bank estimates that 90 percent of those homes are still occupied.

The courts are not the only source of delay. Over the years, the federal government has made 69 changes to its mortgage modification programs, forcing lenders to repeatedly scrap previous offers to homeowners and extend new terms.

Of course, the banks have also dragged out this reckoning through shoddy paperwork, botched modifications, and general dysfunction as they struggled to cope with a flood of soured mortgages. Many cases were passed between lawyers like hot potatoes and lay dormant on court dockets.

Since housing prices peaked in 2006, roughly 6.7 million Americans have lost their homes to foreclosure. Another 800,000 people could share that fate by the time all of the delinquent mortgages from the crisis are settled, according to a Moody’s Analytics estimate.

“This whole event is going to take 10 years to sort out,” said Mark Zandi, chief economist at Moody’s Analytics. “So we probably have one or maybe two more years to go until it is all over.”

But the laws in places like Florida could prove to be a wild card. In a state where “hanging chads” decided the 2000 presidential election, a legal technicality could help settle the state’s foreclosure crisis.

Lawyers for homeowners in Florida contend that lenders have five years to file for foreclosure after a homeowner defaults, normally after several months of missed payments, and the mortgage is “accelerated,” meaning that the bank says the debt is due all at once. Banks say they have many more years to file for foreclosure, arguing that the five-year clock resets every time a homeowner misses a monthly payment — regardless of when the mortgage was accelerated. Some Florida judges have agreed.

The statute of limitations does not halt a foreclosure case that is continuing in court. But in some Florida courts, homeowners’ lawyers have argued that once a foreclosure is dismissed even for technical reasons, the lender cannot evict the delinquent borrower if the statute of limitations has passed.

The issue is now before the Florida Supreme Court.

The lenders’ lawyers have warned in court papers that if the state’s high court sides with the homeowners, “it would spawn a public policy hazard” and dissuade banks from extending mortgages in Florida in the future.

The statute of limitations issue is also coming up in the New York courts.

“It’s becoming a more common way to get out from under these cases,” said Linda Tirelli, a lawyer in White Plains, N.Y., who represents homeowners facing foreclosure.

In June, it also appeared that Rodolfi was literally home free.

When a lawyer then working for her mortgage servicer did not show up for a routine hearing, the judge dismissed her foreclosure case.

But her servicer, Nationstar Mortgage, recently won a reversal of the dismissal, saying the lawyer had missed the hearing because of “inadvertence, mistake, and excusable neglect.” Rodolfi’s lawyers plan to appeal.

“People who are paying their mortgage might see this as a windfall for the homeowner,” said one of her lawyers, Martin G. McCarthy. “But the lenders are more than partly to blame, and in Susan’s case, I wouldn’t feel bad for them.”

Please click here to view the article online.

Tenant Protection Legislation Enacted in Utah

Posted on September 13, 2018 by Safeguard

Legislation Update
March 28, 2016

General Description:

This bill enacts and amends provisions related to foreclosure of residential rental
property.

Highlighted Provisions:

This bill:

under certain circumstances, allows a preexisting tenant to continue to occupy, for a limited amount of time, a residential rental property after a forced sale at public auction;
repeals a sunset provision;
eliminates a sunset repeal date; and
provides a repeal date for certain sections.

Source: Utah State Legislature (SB 22 full text)

Proposed California Assembly Bill AB 514

Posted on September 13, 2018 by Safeguard

On February 23, Assembly Member Das Williams (D-CA) introduced California Assembly Bill 514. AB 154, if enacted, would amend the local fines and penalties for violations of local building and safety ordinances.

SEMBLY BILL No. 514
Introduced by Assembly Member Williams

An act to amend Sections 25132 and 36900 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 514, as introduced, Williams. Ordinances: violations: fines. Existing law authorizes the legislative body of a city, county, or city and county to collect any fee, cost, or charge incurred in specified activities, including the abatement of public nuisances, enforcement of specified zoning ordinances, inspections and abatement of violations of the State Housing Law, inspections and abatement of violations of the California Building Standards Code, and inspections and abatement of violations related to local ordinances that implement these laws. Existing law limits the amount of this fee, cost, or charge to the actual cost incurred performing the inspections and enforcement activity, including permit fees, fines, late charges, and interest.

Existing law authorizes the legislative body of a local agency to make, by ordinance, any violation of an ordinance subject to an administrative fine or penalty and limits the maximum fine or penalty amounts for infractions, as specified. For violations of city or county building and safety codes determined to be an infraction, existing law limits the amount of the fine to $100 for a first violation, $500 for a second violation of the same ordinance within one year, and $1,000 for each additional violation of the same ordinance within one year of the first violation.

This bill would eliminate these fine amounts for violations of local building and safety code ordinances determined to be an infraction and instead require a maximum fine or penalty amount for a violation of those local building and safety ordinances to be established by ordinance that is subject to specified requirements. By requiring cities and counties to establish these fine or penalty amounts by ordinance, the bill would impose a state mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Please click here to view the full text of AB 154 [pdf].

Oregon Proposed Legislation HB 3080 ?Relating to assessments that association of unit owners imposes on foreclosed residential real property?

Posted on September 13, 2018 by Safeguard

On February 20, Rep. Sal Esquivel (R-OR) introduced HB 3080, titled “Relating to assessments that association of unit owners imposes on foreclosed residential real property” to the Oregon Legislature.

House Bill 3080
Sponsored by Representative ESQUIVEL

SUMMARY

The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the measure as introduced.

Requires owner to pay dues, charges, fees and assessments that homeowners association, condominium board or association of unit owners imposes to maintain property that homeowners association, condominium board or other association of unit owners holds in common, and for related purposes, during period in which foreclosed residential real property is vacant. Requires owner to pay utilities during period in which foreclosed residential real property is vacant. Permits homeowners association, condominium board or other association of unit owners to bring action for dues, charges, fees or assessments that remain unpaid 60 days or more after date on which homeowners association, condominium board or other association of unit owners notified owner of dues, charges, fees or assessments.

Current status as of March 18, 2015: On February 27, it was referred to the House Committee On Human Services and Housing and has a public hearing scheduled for March 25.

Please click here to view the full text of HB 3080 [pdf].

North Carolina Bill Would Permit Homeowners to Exclude Forgiven Mortgage Debt from Taxes

Posted on September 13, 2018 by Safeguard

On March 9, DS News released an article discussing a bill approved in the North Carolina House of Representatives which would affect about 4,000 homeowners.

North Carolina Bill Would Permit Homeowners to Exclude Forgiven Mortgage Debt from Taxes

A bill approved by a committee in the North Carolina House of Representatives would allow distressed homeowners to omit forgiven principal mortgage loan debt when reporting tax income at the end of the year, according to a media reports.

The bill that was just approved by the House committee was actually a rewritten version of a bill that passed in the North Carolina State Senate last month that would require taxpayers to count forgiven mortgage debt – the remaining mortgage loan balance when a home is sold in a “short sale” to avoid foreclosure – as part of their gross income when filing tax returns.

The rewritten North Carolina bill would allow homeowners to exclude the forgiven tax debt from their taxable income. For example, according to a report from the Charlotte Observer, if a homeowner had $20,000 worth of principal mortgage debt forgiven, that homeowner would have to pay $1,160 in state taxes if that forgiven debt is listed as taxable income.

According to the report from the Observer, about 4,000 homeowners would be affected by the rewritten bill.

North Carolina Representative Bill Brawley, a Republican who is the chairman of the House Financial Committee, said that if the rewritten bill passes – and he expects it to, even though most Republicans who control the House don’t want it to – then he estimates it would cost the state about $14 million in lost revenue by not going along with the version of the bill that passed in the State Senate last month.

For years in response to the housing crisis, North Carolina permitted homeowners to exclude forgiven mortgage debt as taxable income, in accordance with similar laws the U.S. Congress enacted for federal income taxes. The Mortgage Forgiveness Debt Relief Act of 2007, originally signed into law by President George W. Bush, relieved distressed homeowners from having to pay taxes on forgiven mortgage debt for the three calendar years of 2007 through 2009. That tax exemption was extended three more years until the end of 2012 with the Emergency Economic Stabilization Act of 2008, and it was extended until the end of 2013 with the American Taxpayer Relief Act of 2012. Just before Christmas last year, President Obama signed a House bill into law that retroactively extended the tax break until the end of 2014. With the number of foreclosures steadily declining nationwide since 2010, it remains to be seen if that tax break will be extended into 2015 for federal income taxes.

Please click here to view the article online.

Nebraska Bill Creates Notification Process for Code Violations on Foreclosed Properties

Posted on September 13, 2018 by Safeguard

On February 26, Legislative Bill LB-151 was approved by the Governor of Nebraska.

Nebraska LB-151 Summary of Purpose and/or Changes (Urban Affairs Committee 1/20/15)

LB 151 creates a notification process for code violations on foreclosed properties. Upon a complaint for foreclosure of a mortgage or a notice of default for a trust deed, and within five days of a request by a city or village, the mortgage holder or trustee shall provide the name and address of a person designated by the mortgage holder or trustee to accept notices of violations by the owner of the foreclosed property. Failure to provide a designated contact person does not impact the validity of a complaint for foreclosure or notice of trust deed default in any way, and the requirement to provide a designated contact person does not create a duty to maintain the property. A designation terminates upon transfer of fee title ownership to the property.

Please click here to view the full text of LB-151 [pdf].

MBA: Principles to Expedite the Foreclosure Process for Vacant and Abandoned Properties

Posted on September 13, 2018September 13, 2018 by Safeguard

Recently, the Mortgage Bankers Association released a white paper titled Principles to Expedite the Foreclosure Process for Vacant and Abandoned Properties. Versions created in part with the New York Mortgage Bankers Association and Ohio Mortgage Bankers Association have been made available.

Principles to Expedite the Foreclosure Process for Vacant and Abandoned Properties

Our nation’s recent financial crisis had a damaging effect on the residential housing market, and while the market is beginning to show tangible signs of recovery — with sales, new construction, and home values all gradually improving from the lows experienced in the recession — many communities continue to “carry scars from rampant foreclosures and vacant properties.”1

The recovery of the residential housing market is an ongoing process and one that requires wise solutions for the nation’s foreclosure inventory — particularly the current backlog of vacant and abandoned properties — to continue successfully. These vacant and abandoned properties cause numerous harms, as they devalue neighboring properties when they fall into disrepair and escalate maintenance and administrative costs for local officials, communities and mortgage servicers. It is also very difficult for neighborhoods or communities that have suffered significantly to recover, as the limbo status of these properties prevents new ownership opportunities and offers difficult to control locations that attract criminal activity.

It is clear that vacant and abandoned properties are impeding a full economic recovery and neighborhood revitalization efforts. To address this, state legislators across the country are considering expedited foreclosure legislation as a promising solution.

1 “Policy Considerations for Improving Ohio’s Housing Markets,” A Staff Report of the Federal Reserve Bank of Cleveland (May 22, 2013).

Please click here to view the New York Mortgage Bankers Association version [pdf] in its entirety.

Please click here to view the Ohio Mortgage Bankers Association version [pdf] in its entirety.

Please click here to view an MBAlert (3/5) featuring articles pertaining to expedited foreclosure methods and New York’s recenty re-proposed Abandoned Property Neighborhood Relief Act.

Massachusetts Proposed Legislation MA HB 1498 “An Act relative to vacant, foreclosing and foreclosed property in the Commonwealth”

Posted on September 13, 2018September 13, 2018 by Safeguard

On March 10, MA HB 1498 was introduced and referred to the Massachusetts Joint Committee on The Judiciary.

HOUSE . . . . . . . . . . . . . . . No. 1498

The Commonwealth of Massachusetts

In the One Hundred and Eighty-Ninth General Court
(2015-2016)

An Act relative to vacant, foreclosing and foreclosed property in the Commonwealth.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:

1 Whereas, The deferred operation of this act would tend to defeat its purpose, which is

2 forthwith to protect citizens of the Commonwealth and Municipalities impacted by the mortgage

3 foreclosure crisis by further expanding existing options for Municipalities to further specify and

4 ensure compliance with state sanitary code, therefore it is hereby declared to be an emergency

5 law, necessary for the immediate preservation of the public convenience.

Please click here to view the full text of MA HB 1498 [pdf].

Maryland SB 197 Proposed Legislation Municipalities-Vacant and Blighted Buildings

Posted on September 13, 2018September 13, 2018 by Safeguard

On February 2, Maryland Senate Bill 197 (“Municipalities-Vacant and Blighted Buildings”) received its first reading in the Education, Health and Environmental Affairs Committee.

Bill Summary: A vacant building is defined as real property improved by a building that is not occupied continuously. A blighted vacant building is defined as a vacant building that is determined by a municipality to be unsafe or insanitary or that is otherwise determined to threaten the health, safety, or general welfare of the community.

A person who fails to register a vacant building is guilty of a misdemeanor and on conviction is subject to a fine of up to $2,000. In addition, a person who violates this provision is liable to the municipality for a civil penalty of $2,000 per day for each day that the violation continues. The maximum amount of a civil penalty may not exceed the assessed value of the property.

The municipality may set a special tax rate for vacant buildings of up to $5.00 more per $100 of assessed value than the rate that would otherwise apply to the building. This tax rate applies whether or not a vacant building is registered with the municipality. The municipality may set a special tax rate for blighted vacant buildings of up to $10.00 more per $100 of assessed value than the rate that would otherwise apply to the building.

Current Law/Background: The concept of “nuisance” originates under common law and is something that causes offense, annoyance, trouble, or injury. A private nuisance obstructs the rights of a specific individual or group, while a public nuisance is an act or omission that obstructs, damages, or inconveniences the rights of the community. Several types of nuisances are specifically addressed in State law, including:

conditions that are dangerous to health or safety, including an inadequately protected swimming pool, an unprotected open ditch, an unsanitary outhouse, a foul pigpen, an improperly functioning sewage system, an unkempt junkyard or scrap metal processing facility, an excessive accumulation of trash or garbage, a dead animal, a contaminated or inadequately protected water supply, a rodent harborage, poor housekeeping that could endanger an individual’s health, or any condition that may endanger health and may be transmitted by means including surface drainage and air currents (Title 20 of the Health-General Article);
dwellings, buildings, vehicles, vessels, aircraft, or any other place(s) used by individuals to administer illegally controlled substances or where controlled dangerous substances or controlled substances or controlled paraphernalia are manufactured, distributed, dispensed, stored, or concealed illegally (Title 5 of the Criminal Law Article);
conditions affecting public health and involving plumbing, drainage, offensive trades, water supplies, and disposal of any waste material (Title 10 of the Environment Article); and
property that is used for prostitution or for the administration, manufacture, distribution, or storage of a controlled dangerous substance or related paraphernalia (Title 14 of the Real Property Article).

Depending on the nuisance, the department charged with abating the nuisance is authorized to enter onto private property to determine its existence.

Additionally, each county board of health is authorized to adopt and enforce rules and regulations on any nuisance or cause of disease in the county. If a county health officer investigates and finds a nuisance, the health officer is required to serve a written notice to the person who is causing the nuisance, ordering the person to abate the nuisance within a specified period of time.

The City of Annapolis reports that between 30 and 50 properties may meet the definition of a vacant building and another 20 buildings may be considered blighted.

Current status as of March 4, 2015: “In the Senate – Unfavorable Report by Education, Health, and Environmental Affairs; Withdrawn”.

Please click here to view the full text of SB 197.

Please click here for media coverage (Capital Gazette 3/5) of SB 197.