I have a Satisfaction of Mortgage recorded in Palm Beach Florida by MERS in conjunction with a short sale of my property. The language reads as follows:

Know all men by these presents: MERS is the owner of and holder of a certain mortgage deed executed by My_Name to MERS bearing Date 01/01/2005 recorded on 01/13/2005 in Official Records Book OR XXX234, Page 999, Instrument # XXX2228899 in the office of the Clerk of the Circuit Court of Palm Beach County State of Florida, securing a certain note in the principal sum of $300,000.00 Dollars, and certain promises and obligations set forth in said mortgage deed, upon the property situated in said State and County hereby acknowledge full payment and satisfaction of said note and mortgage deed, and surrenders the same as canceled, and hereby directs the Clerk of the said Circuit Court to cancel the same of record.

Witnessed sealed notarized etc. and recorded.

Is this a release of my note as well as the mortgage? I have no cancelled note, and have not yet received a 1099C from my “lender”. They reserved the right to pursue a deficiency judgement in their short sale letter. This sure looks like MERS recorded the note as paid in full and satisfied along with the mortgage.

Thanks
Jeff (more…)

I and two others purchased an undeveloped lot in the Florida Panhandle in 2005.  When the loan came up for a balloon payment in 2008, I found my co-owners were unable to pay and one had transferred his interest to the other.

To clear the air, I paid my 1/3rd ($127,500) to the lender and was given a full release from the note in the amount of $382,500 but no certificate of satisfaction or partial release from the mortgage. 

My remaining co-owner entered into a modification agreement with the lender with a new unpaid balance of $255,000 on the note and security instrument which reflects my payment. 

In view of lender’s refusal to cooperate, is it possible to infer a partial release by virtue of the lenders acceptance of my payment and their having released me from the entire note. My question is in anticipation of foreclosure and due to my payment I feel I should share in the foreclosure proceeds. 

Rodney (more…)

National Mortgage News – The business of brokering residential loans has enjoyed a good run — about 25 years by most measurements — but now there are increasing signs that not only are these third-party salesman facing a bleak future, but that they have no future at all.

Recently, David Olson of Wholesale Access made headlines in the industry press when he predicted that by yearend there would be just 15,000 brokerage firms in existence. Mr. Olson, who has made a good living the past two decades studying brokers, cites a number of reasons: restrictions on yield-spread premium payments, new national registration requirements and licensing costs, and a general lack of interest on the largest remaining wholesalers in growing their broker channels. (A few mortgage insurance firms have said they either won’t accept broker loans or put bans on condominium mortgages sourced through them.)

“Chase?” asked Mr. Olson. “They don’t like brokers and are out that channel. Bank of America and Wells are seeing their TPO (third-party origination) volumes going down, down, down.” He added, “Everyone is writing brokers off.”

Three years ago there were 54,000 brokerage firms in existence, which means if Mr. Olson’s prediction comes true, the peak-to-trough decline translates into 72% of the industry going bust over three years, not a pretty picture. Keep in mind, though, that many brokerage firms are small “mom and pops” that employed less than five people. Some were sole proprietor operations.

Every month or so Wholesale Access would hear from 1,000 brokers, picking their brains about the state of the market and reselling that research to some of the largest wholesalers, as well as Fannie Mae and Freddie Mac. But today, Mr. Olson says he’s talking to just a handful of brokers each month and many are “looking for something to do.” Some he said are selling car insurance on the side or doing loss mitigation work.

Yet, Mr. Olson sees a ray of hope in the industry’s future. The chief reason is costs. He and many other mortgage veterans know that it can get expensive keeping full-time loan officers on their books, especially when origination volumes begin to swoon. “Brokering is a form of outsourcing,” he said. “It has to be viewed that way.”

In other words, if a loan doesn’t close, a broker doesn’t get paid by the wholesaler. And because a broker is really just an outsourced employee, it costs the wholesaler nothing in terms of fixed salary costs. Banks and thrifts have to maintain retail branches — another fixed cost.

As for how long it will take the brokerage sector to revive, Mr. Olson is uncertain. There have been scattered reports of regional banks launching small, targeted wholesale divisions, a positive sign for the industry. And recently, Michael Ashley, chief business strategist at Lend America, Melville, N.Y., started to lay the groundwork for a new wholesale channel.

According to Mr. Ashley, there “are still plenty of brokers around that would want to do business if they had a source [of funding].” He said he believes the declining numbers in the Wholesale Access report reflect a “survival of the fittest” dynamic among brokers. In many cases he believes those remaining “know how to responsibly and ethically originate a loan.”

In other words, perhaps all the sector’s “bad actors” have left the building and only the cream of the crop are left. We shall see.

Washington Post – The Federal Housing Administration has been hit so hard by the mortgage crisis that for the first time, the agency’s cash reserves will drop below the minimum level set by Congress, FHA officials said.

The FHA guaranteed about a quarter of all U.S. home loans made this year, and the reserves are meant as a financial cushion to ensure that the agency can cover unexpected losses.

“It’s very serious,” FHA Commissioner David H. Stevens said in an interview. “There’s nothing more serious that we’re addressing right now, outside the housing crisis in general, than this issue.”

Until now, government officials have warned that the agency could be forced to ask Congress for billions of dollars in emergency aid or charge borrowers more for taking out FHA-insured loans if the reserves fell below the required level, equal to 2 percent of all loans guaranteed by the agency.

Both options are politically unpalatable. Congress and the public are weary of bailouts after the government spent hundreds of billions of dollars rescuing banks; insurance companies; automakers; and the mortgage finance giants, Fannie Mae and Freddie Mac. Raising premiums for borrowers could increase the cost of buying a home just as a wounded housing market is showing signs of life.

Stevens said that such drastic actions are not needed. He said he is planning to announce Friday several measures that should help the reserves rebound quickly.

The FHA, which is part of the Department of Housing and Urban Development, insures home mortgages against losses, thus helping prospective borrowers obtain loans. It uses the insurance premiums paid by these borrowers to pay for mortgage defaults. Since its creation in 1934, it has never used taxpayer money to cover losses at its flagship home-buying program. But rapidly rising defaults have burned through the agency’s reserves, raising the prospect that it would have to take dramatic action.

The reserves are meant to ensure that the agency remains solvent and can continue helping people get mortgages, which in turn supports the housing market and wider economy.

An independent audit due out this fall will show that the agency’s reserves will drop below the 2 percent level as of Oct. 1, the start of the new fiscal year, Stevens said.

Although the reserves had remained well above the minimum required level during the housing boom, the audit last year showed they had shrunk to 3 percent as of Sept. 30, compared with 6.4 percent a year earlier. The fund’s value was estimated at $12.9 billion, down from $21.2 billion the previous year.

‘Not Going to Congress’

Earlier this year, HUD Inspector General Kenneth Donohue told a Senate panel that falling below the reserve’s minimum threshold would require an “increase in premiums or congressional appropriation intervention to make up the shortfall.”

But Stevens, who became FHA commissioner in July, said these options are not on the table. “We are absolutely not going to Congress and asking for money for FHA,” he said. “We’re not going to need a special subsidy or special funding of any kind.”

He stressed that the agency plans to take other steps that will help beef up the reserves. Some of these measures address fraudulent loans that can contribute to FHA’s losses.

For one, he will propose that banks and other lenders that do business with the FHA have at least $1 million in capital they can use to repay the agency for losses if they were involved in fraud. Now, they are required only to hold $250,000. Second, he will propose that lenders also take responsibility for any losses due to fraud committed by the mortgage brokers with whom they work.

In an effort to reduce the risks faced by the agency — and thus the potential for losses — Stevens said he plans to hire a chief risk officer by the end of the year. The agency has never had one in its 75-year-history.

Though these changes were in the works before the FHA reviewed the new audit, he said the steps should help fatten up the FHA’s loss reserves faster than projected.

The new audit shows that even without any new measures, the reserves will rebound to the required level within two or three years largely as the result of the recovery in the housing market, Stevens said. This calculation is based on projections of future home prices, interest rates and the volume and credit quality of FHA’s business.

Agency’s Financial Health

The audit appears especially dire because it offers a snapshot of the agency’s financial standing at the depths of a severe recession, and it does not take into account the new loans FHA will insure and the new premiums it will collect, Stevens said. The borrowers receiving recent FHA-backed loans have, on balance, been more creditworthy than those the agency is used to catering to, he said.

And while the reserves are at a historic low, Stevens noted that they represent only part of the money the agency maintains to cover losses on insured mortgages. The agency, on an ongoing basis, pays for losses directly out of a second fund. The reserve fund is intended as a backup should losses exceed forecasts. In total, these two funds had $30.4 billion as of June 30, up from $28.3 billion on Sept. 30, 2008, according to Stevens.

The FHA’s financial health is in the spotlight in part because of its key role in buoying the housing market.

The agency lost much of its relevance during the housing boom when home prices soared and borrowers raced to aggressive subprime lenders. But after the subprime market collapsed, borrowers flocked back to the FHA, the only option for those who lack stellar credit or hefty down payments. Its historic role in backing loans is more crucial now than ever.

The agency does not lend money; it insures lenders against losses. It has captured 23 percent of all new loans made so far this year, up from just 3 percent in 2006.

But the agency’s sudden popularity has alarmed some lawmakers, who regularly question whether the FHA has the resources and expertise to handle its increased workload and avert an avalanche of new defaults.

I got a third on my property right before I refinanced my loan. The first and second were paid but not the third. Would this put that 3rd in first position since it wasn’t paid off?

It was signed and notarized but not recorded until after the refi. (not sure if that makes a difference)

I’d really appreciate your opinion. Thanks!

Carol (more…)

I had hired a company in March Paid them $1500.00 to get a loan modification. Then in June they went out of business. This guy said he would take our loan with him to another firm.

So another attorney filed the papers with Bank of America for the loan modifiction. Basically that was all he did. He told us we could check with Bank of America ourselves. So far there has been nothing.

We went to see a bankruptcy attorney and he said that we need to get this loan modified.

I talked to my Father and he asked me to find out if it was possible if the Bank would settle the loan for 50% of what is owed. Will they do this?

Thanks for any and all help.

Noelle (more…)

I currently have two loans with National City (now PNC) my 1st mortgage is $600k and the 2nd is $150k. 

I am technically in foreclosure with the first but working with the loan modification department on a workout package. 

My 2nd is due to charge off at the end of the month.  I have asked them repeatedly to work with me on a modification but they have only come back with a reduced payment for two years. 

I would like to stay in my home but given that I am down $300k don’t feel the 2nd is reasonable and am waiting on the first to determine what I should do next. 

Should I let them charge off the 2nd mortgage? 

Please advise?

Dewey (more…)

HousingWire – As of the end of June, more than 15.2m US mortgages representing 32.2% — or roughly one-third — of all mortgaged properties in the country had fallen underwater in a negative equity position.

The proportion of US mortgages underwater in Q209 came in slightly below the 32.5% seen at the end of March, according to data released Thursday by First American CoreLogic.

The top five states in terms of a proportion of underwater borrowers included Nevada with 66% in negative equity and Arizona with 51% negative equity. Florida followed with 49% underwater while Michigan and California rounded out the top five with 48% and 42% respectively.

“Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock such as a job loss, illness or other adverse situation,” chief economist Mark Fleming says.

“Given that negative equity did not increase this quarter and home prices declines are moderating or flattening,” Fleming adds, “we may be at the peak of the negative equity cycle. However, until negative equity recedes and unemployment declines, mortgage risk will continue to be very elevated.”

The aggregate property value for loans in a negative equity position and at risk for default reached $3.4trn in June. California claimed the highest share of underwater loans valued at $969bn, followed by Florida with $432bn. New Jersey and Illinois each held $146bn while Arizona followed with $140bn.

My husband and I filed a chapter 7 bankruptcy which was discharged in October of 08. We intended to keep the house and kept up the payments on both the 1st and 2nd mortgages. Since then the marriage fell apart and we handed in the keys and the property is now in foreclosure. 

I was under the impression that since we did not reaffirm either mortgage that we would not be liable for the loans because of the bankruptcy.  We are in California.  Is this correct? 

I talked with the mortgage company today about the foreclosure process and they said we are still liable.

Kristy (more…)

My company is shutting down our California office, and I accepted a transfer to an office in another state.  I was able to sufficiently demonstrate hardship to my lenders and negotiate a settlement with each – the fact that my employer provided loss-on-sale assistance certainly helped.  We closed escrow two days ago, without a single late payment to either lender.

In the city I will be moving to, I was referred to a mortgage broker who assured me (repeatedly) that I would have no problem buying a house, as long as I was not delinquent on my current loans when the house was sold.  My credit score is over 780 (at least, it was until two days ago…), and I have sufficient income and cash on hand to qualify for a loan.

Based on all of this, I entered into a contract for a home in my new city.  My loan was approved by underwriting, but did not make it through QC – evidently a senior underwriter called my broker and told him that I would not qualify due to the short sale, and that this was a recent (as of July 1) change to Fannie Mae underwriting guidelines.

Is this true?  Or, did I foolishly put my faith in a broker who led me down the proverbial primrose path?

Chris (more…)