Archive for the ‘HUD News’ category

Ruling Puts Lenders on the Hook for Unpaid Condo Assessments

December 17, 2015

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This ruling should be of great interest to all Condo HOAs and Property Managers. This could potently reduce losses form non dues paying homeowners that quite often run into thousands of dollars.

For a more detailed look at this subject – please read the article below.

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The Illinois Supreme Court created potentially hazardous territory for lenders who take title to condominium property via foreclosure lawsuits. In 1010 Lake Shore Drive Ass’n v. Deutsche Bank Nat’l Trust Co., the Supreme Court held that liens for unpaid condominium assessments are not extinguished unless the lender pays post-sale assessments and in doing so it upheld a money judgment against a lender for unpaid assessments which were the debt obligation of the prior unit owner. The decision does not provide much clarity for lenders going forward, and it leaves lenders potentially vulnerable to money judgments for all unpaid assessments—even assessments which became due prior to judicial sale.

A brief explanation of the condominium statute and the foreclosure statute will clarify the issues at stake before the Supreme Court. In Illinois, lenders who are the successful bidders of condominium property at foreclosure sale are liable for assessments beginning on the first day of the month after judicial sale. Moreover, missed assessment payments operate as a lien on the condominium unit. The condominium statute states that making the post-sale payment for assessments “confirms the extinguishment” of any lien for unpaid assessments. So lenders have the personal obligation to pay assessments beginning the month after judicial sale, with the knowledge that there may be a lien against the property because the prior owner failed to pay assessments. But in mortgage foreclosure actions, the judicial sale is not final until the court confirms the sale: until then, it is merely an irrevocable offer to purchase the property. A lender could potentially wait months between the judicial sale and when the judge confirms the sale.

In 1010 Lake Shore Ass’n, judicial sale occurred on June 17, 2010. The lender failed to pay monthly assessments, and on May 17, 2012, the association filed a lawsuit for possession and unpaid assessments. It claimed that the lender owed it approximately $62,000.00 in unpaid assessments. The association eventually moved for summary judgment. The lender responded that it only owed $43,000.00 of post-sale assessments—the rest of the amount demanded was the debt of the prior unit owner. The trial court entered judgment in the association’s favor in the amount of approximately $70,000.00.

The appellate court affirmed. It held that the judgment was appropriate because the lien for unpaid assessments was not extinguished. It held that liens for unpaid assessments are not extinguished unless the lender pays assessments following the judicial sale. It reasoned that the condominium statute states that post-sale payment “confirms the extinguishment” of the lien, so the lien for unpaid assessments was not fully extinguished. Justice Liu dissented, and argued that under the foreclosure law all claims were barred on completion of the foreclosure, so section 9(g)(3) of the condominium statute offered an alternative method to extinguish the lien for unpaid assessments.

To read the complete article – please use the link below.

Lenders on the Hook

Castro Begins HUD Confirmation Hearings

June 20, 2014

 

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Julian Castro should have no problem with securing  confirmation for  the position of Secretary of HUD.    For a more detailed look at this subject – please read the article below.

 

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San Antonio Mayor Julian Castro, the president’s pick to replace Shaun Donovan as secretary of HUD, appeared to breeze through his first nomination challenge Tuesday as he fielded questions from the Senate Banking Committee.

 

Appearing before the committee for his nomination hearing, Castro, whose work in San Antonio includes an initiative to spark private investment for the production of thousands of additional housing units in the city in 2014 alone, opened his testimony with reassurances that his leadership would have HUD focusing on “outcomes, not only inputs.”

 

“We shouldn’t just track projects and dollars spent. We must measure those investments by the impact they make,” he said.

 

Facing questions from the group of senators, Castro addressed the current stability and role of the Federal Housing Administration (FHA), which had to take a $1.7 billion bailout last year for the first time in its history as a result of losses suffered from mortgages insured as the housing market collapsed.

 

Noting that FHA’s financial position has improved as a result of changes adopted by the agency, Castro admitted “there can be action taken to ensure that the FHA stays on a positive track,” though he was non-specific regarding any plans.

 

In the wake of the housing and foreclosure crisis, the agency has drawn no small amount of fire from critics who say its standards have become too loose on loans it insures.

 

To read the complete article – please use the link below.

HUD Confirmation Hearings

Mel Watt Sworn in as FHFA Director

January 8, 2014

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This is good and bad news for the country. With Mr. Watt running the FHFA you can expect more principle forgiveness with more buyers qualifying for mortgages. On the down side his programs will cost the U.S. Taxpayer a lot more money in the form of government subsidies (HAPM, HARP, Etc.). For a more detailed look at this subject – please read the article below.

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After months of contentious debate, the Federal Housing Finance Agency (FHFA) finally has a new director. Mel Watt, the former democratic North Carolina senator, was sworn in Monday to a five-year term as the first Senate-confirmed director of the FHFA. Anthony Foxx, the U.S. Secretary of Transportation and former mayor of Charlotte, North Carolina administered the oath.

FHFA was created by the Housing and Economic Recovery Act of 2008 to oversee Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks and is responsible for oversight of the $5.5 trillion mortgage finance market.

“I am honored to serve as director of the Federal Housing Finance Agency,” Watt said. “Today’s housing finance system is one of the keys to our economic recovery and I am grateful for the opportunity to help develop a strong foundation for moving this system forward for the benefit of all Americans at this critical point in our nation’s history.”

Watt, 68, represented the 12th congressional district of North Carolina as a member of the U.S. House of Representatives for more than 21 years, being first elected to that office in 1992. As a member of Congress, Watt served on the House Financial Services Committee, and its Capital Markets Subcommittee and Government Sponsored Enterprises. Watt also served on the House Judiciary Committee, where he was ranking member of the Intellectual Property, Competition, and the Internet Subcommittee. Watt also served as Chairman of the Congressional Black Caucus.

To read the complete article – please use the link below.

Mel Watt Sworn In

HUD OFFICES TO CLOSE NATIONWIDE ON FRIDAY, MAY 24

May 23, 2013

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I just got this in an email. HUD will be closed on 7 days through August 2013. I noticed that they are going to be closed for 1 day but you and I should expect an extra 2 days delay, above and beyond “normal” 2 – 3 day delay,  in receiving any requested action or information.

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The U.S. Department of Housing and Urban Development (HUD) is notifying the public today that it will close its offices nationwide on Friday, May 24th as a result of government-wide automatic spending cuts that took effect on March 1, 2013.  HUD will resume normal operation on Tuesday, May 28th, following the Memorial Day federal holiday. We encourage those with business in HUD offices to plan accordingly.

On designated furlough days, employees are forbidden to engage in any agency-related activities and all HUD/FHA Offices will be closed.  The HUD/FHA scheduled furlough days are:

·         Friday, May 24

·         Friday, June 14

·         Friday, July 5

·         Monday, July 22

·         Friday, August 2

·         Friday, August 16

·         Friday, August 30

Please note that response times to your requests for information and processing may be delayed by up to two additional days during these time periods (this is in addition to the normal 2-3 day standard response time).  HUD/FHA apologizes for the inconveniences that may be caused by the implementation of these furlough days and will work with our clients to minimize any negative impacts.

On designated furlough days, certain FHA services will still be available to our clients.  Available services are outlined below:

1.     The FHA Resource Center.  The Resource Center will be open and available to assist clients with FHA-related calls (800-225-5342) and emails (answers@hud.gov) during its normal business hours of 8:00 AM to 8:00 PM Eastern.  Please note that Resource Center staff will be unable to escalate policy clarification or case specific questions to HUD employees on furlough days.  Clients will be required to call back on the next business day to seek escalation once HUD Offices have re-opened.

2.     FHA National Servicing Center (NSC) Call Center.  The NSC Call Center will be open and available to assist clients with FHA servicing related calls (877-622-8525) and emails during its normal business hours of 8:00 AM to 8:00 PM Eastern.  Please note that NSC Call Center staff will be unable to escalate policy clarification or case specific questions to HUD employees on furlough days.  Clients will be required to call back on the next business day to seek escalation once HUD Offices have re-opened.

3.      HUD Internet Sites.   HUD’s main web page (http://www.hud.gov), FHA Connection (https://entp.hud.gov/clas/), and the HUD Home bidding site (http://www.hud.gov/hudhomes) will be operational and available for normal use.  Please note that any system support requests or system outages during furlough days will not be addressed until the next business day.

4.      Marketing and Management Contractors.  Bidding and maintenance contracts on HUD-owned properties will be available to accept and process bids as well as maintain HUD Homes.  Please note that any requests for HUD clarification or support on these contracts will not be available until the next business day.

HUD/FHA Resources for Oklahoma Counties Impacted by Severe Storms and Tornadoes

May 21, 2013

This just came in by an email from HUD/FHA.

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On May 20, 2013, Cleveland, Lincoln, McClain, Oklahoma, and Pottawatomie counties in Oklahoma were identified as Presidentially Declared Major Disaster Areas.  The Federal Housing Administration would like to remind mortgagees to provide assistance to borrowers with FHA-Insured single family mortgages pursuant to Mortgagee Letters 2013-11, 2012-28 and 2012-23.

http://portal.hud.gov/hudportal/documents/huddoc?id=13-11ml.pdf

http://portal.hud.gov/hudportal/documents/huddoc?id=12-28ml.pdf

http://portal.hud.gov/hudportal/documents/huddoc?id=12-23ml.pdf

HUD/FHA Relief Available in Presidentially Declared Disaster Areas

If your home has been affected by a natural disaster (hurricane, flood, tornado, wildfire, etc.) it is important to identify the resources available to assist in your recovery. Most federal disaster recovery efforts are triggered by the designation of the area as a Presidentially-declared disaster area. To obtain the latest information on available programs, eligibility criteria, and declared disasters, visit the national disaster recovery site, located at:  http://www.disasterassistance.gov/

The following programs are available through an FHA approved lender without regard to your current financing type:

·         Section 203(h), Mortgage for Disaster Victims Program – this program allows FHA approved lenders to provide financing to individuals and families (homeowners or renters) whose residences were destroyed or damaged to such an extent that reconstruction or repair is necessary. This program allows 100% financing for the purchase or reconstruction of a home, however, closing costs and prepaid expenses not paid by the seller must be paid by the borrower in cash through premium financing.

·         Section 203(k) Rehabilitation Program – this program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. Damaged residences are eligible for Section 203(k) mortgage insurance regardless of the age of the property when the property is located in a presidentially declared disaster area. The residences need only to have been completed and ready for occupancy for eligibility under Section 203(k).

·         Lenders may use Section 203(k) in combination with Section 203(h) for disaster rehabilitation.

Information for Homeowners:

·         Homeowners should contact their hazard insurance provider and mortgage lender as soon as possible to notify them of the condition of your property and to obtain their assistance in your recovery effort.

·         If a borrower’s current mortgage is insured by FHA they will receive an immediate 90-day moratorium on foreclosure and forbearance.

·         If homeowners are not satisfied after discussing possible relief actions with your lender on your FHA mortgage, please contact HUD’s National Servicing Center by calling 1-877-622-8525.

·         For more information on disaster relief for FHA borrowers go to:  http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/qaho0121

Additional Resources

·         To find more information about HUD and FHA disaster relief programs, please visit the HUD disaster resources site at:  http://www.hud.gov/info/disasterresources_dev.cfm

·         To find out more about the Federal Housing Administration’s primary disaster mortgage insurance program, click here:  http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/ins/203h-dft

·         Affected homeowners can locate a local housing counseling agency by calling (800) 569-4287 or visit:   http://portal.hud.gov/hudportal/HUD?src=/i_want_to/talk_to_a_housing_counselor

Fourth Round of Foreclosure Review Checks Sent, Bringing Total to 3.9M

May 6, 2013

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I hope the bounced check problem does not come up again. The last time it happened it cost recipients a lot of problems and money in NFS fees. Please read the article below and let me know what you think.

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The Office of the Comptroller of the Currency (OCC) announced the fourth round of checks from the foreclosure review settlement was sent Friday, May 3.

The most recent batch includes 233,404 checks totaling more than $224 million, which brings the overall total to 3.9 million checks valued at $3.4 billion. About 4.2 million borrowers should expect to receive a check ranging from $300 to $125,000.

As of May 2, more than 1.8 million recipients have cashed or deposited nearly $1.7 billion in checks from the foreclosure agreement reached in January between federal regulators and 13 servicers.

The agreement replaced the Independent Foreclosure Review that was first required through consent orders issued by regulators for “deficient” foreclosure and servicing practices. In place of the review, the 13 servicers—Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo—agreed to provide $3.6 billion in cash to customers whose homes were in foreclosure between 2009 and 2010 and another $5.7 billion in mortgage assistance.

To read the complete article please use the link below.

Foreclosure Review Checks Sent

First Wave of Payments from Foreclosure Settlement Set for April 12

April 11, 2013

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Is this going to be another case of the attorneys getting rich and the borrowers getting a very small check? Please read the article below and let me know what you think.

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The first wave of checks for eligible borrowers covered by the recent foreclosure agreement with 13 mortgage servicers will be sent April 12, the Federal Reserve andOffice of the Comptroller of the Currency (OCC) announced Tuesday.

In January 2013, the Fed and OCC reached a foreclosure agreement with 13 servicers—Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

As part of the agreement, the servicers collectively agreed to pay $3.6 billion in cash and $5.7 billion in other foreclosure prevention assistance to settle charges related to deficient foreclosure and servicing practices.

Only borrowers who were in any stage of the foreclosure process between 2009 and 2010 and had a mortgage serviced by one of the companies in the settlement are eligible for payment relief.

About 4.2 million borrowers should expect to receive checks ranging $300 to $125,000. The first phase of payments will include 1.4 million checks, with the final phase of payments scheduled to be sent in mid-July 2013.

With the exception of Goldman Sachs and Morgan Stanley, 90 percent of total payments from the servicers should be sent by the end of April.

Payment details for eligible borrowers of Goldman Sachs or Morgan Stanley will be revealed at a later time, according to a release from regulators.

Rust Consulting, Inc., the paying agent, will send a letter with a check to borrowers. Though, some borrowers might receive letters from Rust requesting additional information to process their payments.

Borrowers can call Rust at 1-888-952-9105 to update their contact information or to confirm if they are one of the eligible borrowers.

To read the complete article please use the link below.

Payments from Foreclosure