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Have you missed
one or more
mortgage
payments?
Do you foresee not
being able to make
mortgage payments
in the future?
Are you living in
fear of foreclosure?
If you‟ve answered
„yes‟ to any of these
questions, you‟re in
the right place.        Avoid Losing Your Home
      Seminar: America‟s Housing Crisis
       How to Avoid Losing Your Home
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          Peter Spino, Jr.
Senior Foreclosure Prevention Counselor
Community Housing Innovations, Inc.

     Brooklyn Law School, JD 1996
   Admitted in New York & Massachusetts
  CONGRATULATIONS!
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  OVER COM ING FEAR IS YOU R
    GR EATEST OBSTACLE.

       BY COM ING HER E,
     YOU HAVE D ONE THAT.

IT IS ONLY GOING TO GET EAS IER .
What the Federal Government is doing…
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   Prior to President Obama‟s recent “MAKING
HOME AFFORDABLE PROGRAM,” there were a
 few lender and legislative attempts to help with the
Foreclosure Crisis, but they provided limited value to
                     borrowers.
                 Crisis Continues to Grow
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IRVINE, Calif., April 16 /PRNewswire/ --
  RealtyTrac(R) (www.realtytrac.com), the leading online
  marketplace for foreclosure properties, today released its
  U.S. Foreclosure Market Report(TM) for Q1 2009, which
  shows:
 Foreclosure filings -- default notices, auction sale notices
  and bank repossessions -- were reported on 803,489
  properties in the first quarter, a 9 percent increase from
  the previous quarter and an increase of nearly 24 percent
  from Q1 2008.
 One in every 159 U.S. housing units received a foreclosure
  filing during the quarter.
 N.Y.S. Action: Residential Foreclosure Program
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  In New York, foreclosure filings increased 150% to
  almost 39,000 homeowners since 2005.

  Governor Paterson helped to legislate:

 90 day pre-foreclosure notification period
 $25 million counseling fund
 New requirement that lenders meet with borrowers
  facing default

Source: 6/20/08 www.lohud.com,“Fixing Mortgages” A Journal News Editorial
           What is foreclosure in NYS?
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                     FORECLOSURE TIMELINE

BORROWER DELINQUENT - 2 to 3 months late with mortgage
Payments; although this timeframe has been greatly expanded recently.

90 DAY PRE-FORECLOSURE NOTICE – For all subprime and non-
traditional loans.

ACCELERATION LETTER – Mortgage Default and entire balance
becomes due.

FORECLOSURE CASE INITIATED – Lender files a Lis Pendens,
Summons and Complaint with court.
                 Foreclosure Timeline
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ANSWER DUE – You have 20 days to answer if served personally and
30 days if by mail.

MANDATORY SETTLEMENT CONFERENCE – Must be held within
60 days from Lender filing proof of service for all subprime and non-
traditional loans.

BORROWER ANSWERS – Borrower presents defenses and counter-
claims. Discovery begins and Lender will make a Motion for Summary
Judgment. If denied, there is a trial or settlement.

DEFAULT – When borrower fails to answer.
                  Foreclosure Timeline
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MOTION FOR ORDER OF REFERENCE – Lender makes this motion
and Judge will sign Order. Court appoints a referee to compute amount
owed by borrower.

MOTION FOR JUDGMENT OF FORECLOSURE AND SALE- Lender
submits this to court. Once signed, Lender schedules auction with
referee and advertises auction in newspaper.

AUCTION – The bank attempts to auction the property. If there is no
third party buyer, the Lender will take title. If the property is sold for
less than is owed, the bank may seek a deficiency judgment; although
we don‟t see this happening very often.
FORECLOSURE DEFENSE
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     Litigation
         Defenses to Foreclosure
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 Predatory Lending
 Loan Fraud
 Standing and Capacity to Sue
 Affirmative Allegation of Ownership
           Defenses to Foreclosure
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 Banking Law Sec. 6-1 and 6-M
 NY General Business Law Sec. 349
     (Deceptive Practices Act)
 Truth in Lending Violations
 RESPA Violations
           Predatory Lending
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A loan based upon the appraised value of the
   property without regard to ability of the
             borrower to repay.
                     Loan Fraud
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• Bank or Broker misrepresents income to the lender
• Bank‟s appraiser overvalues property
• Negligent Underwriting
• No Due Diligence
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         Ways of Perpetrating Loan Fraud


                                                                  Closing
                        The             The       Rushing       loans with
      Failure to     mortgage        broker‟s     the
                      broker       purpose is     borrowers     borrowers
       disclose                                                 who do not
     terms and      appoints an     to ensure     through
                    attorney to      that the     100-page        speak
     conditions    represent the   loan closes    contracts      adequate
     before loan     borrower,       and that     without
                                                               English with
       closing                                                 an attorney
                   that attorney   broker and     fully          who does
       violates        in fact        lender      explaining    not speak
       Reg. Z.      represents       receive      their            the
                    the broker.     their fees.   contents.     borrower‟s
                                                                language.




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         Ways of Perpetrating Loan Fraud:
     When projected payment schedule is wrong
      because actual payments due are higher.




         Introductory
           “teaser”         Adjustable
                            Rate Loans
             rates



           Negative
          Amortization
                           Option ARMs
            Loans




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     Goals of the Foreclosure Defense
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           Goals of Foreclosure Defense


      Obtain damages

      Delay the foreclosure for an extended
       period of time
      Better bargaining position for re-
       negotiation of the loan, including possible
       reduction of the principal amount.


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Advocacy:
“The mortgage
crisis could have
been alleviated
by the
involvement of
more lawyers.”


-Michael Schill,
Dean, UCLA          Source:
School of Law       The Wall Street Journal
                    June 18, 2008
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       Your foreclosure counselor, your
       lender and you decide what to do
       next…


     THERE ARE OPTIONS TO FORECLOSURE:

      Reinstatement
      Forbearance
      Short Sale
      Short Refinance
      Deed in Lieu of Foreclosure
      Loan Modification
   What You Can Do
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OPEN THE LETTE RS . THEY D O N OT BITE.


CALL OR WRITE TO YOUR
LENDER’S (BANK’S) LOSS
MITIGATION DEPARTMEN T
     IMMEDIATELY .
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If you‟ve just lost
your job…


Your lender may
agree to a
forbearance where
they allow the
homeowner to
delay payments for
a short period of     Forbearance
time.
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An agreement
made with a
lender to accept
less than amount
owed by a
borrower via a
sale of the
property to a
third party.


The lender
releases the
borrower from
the mortgage,
preventing
foreclosure.       Short Sale
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                      Short Refinance
Similar to a short    If you are speaking with a servicer
sale but the lender   of loans, then you must go to
allows borrower to    another lender.
obtain a refinance
at a lower loan       Only a few lenders doing right now.
amount thereby
reducing principal    Similar to refinancing but more
                      difficult and longer process.
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DEED IN LIEU    Lender agrees to allow a borrower
    OF          to sign the property over to the
FORECLOSURE     bank without having to foreclose.
                This used to be extremely difficult,
                but now most lenders will at least
                consider. Lender forgoes
                deficiency judgment.
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The lender will agree to
add the amounts due to
the back of the loan.

This agreement consists
of adding the past-due
payments and penalties
to the remaining
principal, so that the
homeowner can pay off
the past-due amounts
over the life of the loan.


This is possible only
after careful debt
evaluation.
                             Loan Modification
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        Loan Modification

      There are a lot of companies out there
       claiming they can help you modify the
       terms of your loan, for a fee.

      CHI is funded by the New York State
       Division of Housing and Community
       Renewal to do this for you at no charge.

      Modifications are not guaranteed and
       you still must qualify.
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          MAKING HOME AFFORDABLE
          PROGRAM
           Incentives have been put in place to
IF YOU      encourage the banks the lower
QUALIFY     payments to 31% of your debt
            to income.
           Lenders will generally lower your
            interest rate as low as 2% for a 5-year
            term.
           Lender may agree to extend the
            term of your loan.
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     www.makinghomeaffordable.gov

      Lenders may consider reducing
      the principal amount of your
      mortgage; although not likely.

      The plan provides for refinancing
      of loans guaranteed by Fannie
      Mae and Freddie Mac.
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      Loan Modification

     REQUIRED DOCUMENTS FOR
     LOAN MODIFICATION

      One month of paystubs
      Two months of bank statements
      Hardship Letter
      Financial Statement
      W2 and/or tax return
Thank you all for coming.
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  PLEASE ASK QUESTIONS
AND TAKE DOWN MY NUMBER
        Peter Spino
       914-595-09 80