Please act now to show your support for the Principal Paydown Plan!  Sign the petition and then share this message with your clients, friends and family!

NACBA has been urging the Obama Administration to enact the Principal Paydown Plan (“PPP”) as one meaningful step to address the current foreclosure crisis.   Just recently, the Administration launched an effort to encourage the American public to create, share and sign petitions that communicate views about the government’s actions and policies.   We have created a petition for the Principal Paydown Plan – sign it now to show your support!

A key feature of the Principal Paydown Plan provides that underwater homeowners who file Chapter 13 bankruptcy can apply all of their monthly mortgage payments to principal for five years by reducing the interest on their loan to zero for that period. This will dramatically reduce negative home equity, which virtually every housing economist has cited as the leading factor pushing up home foreclosures nationwide.

Show your support – sign the petition now!

The Administration will decide which petitions to further review based on the number of signatures a petition receives.  Help us make sure the PPP gets the attention it warrants – after you sign the petition, please encourage your friends, family members and clients to do the same.  Together we can make this happen!

Thank you for all you do!!

What:            Foreclosure Answer Clinic – a FREE walk-in legal clinic

Who:              For homeowners who have received a Foreclosure Summons and Complaint

When:           11:00 am – 1:00 pm, Thursday, April 7, 2011

Where:          City-County Building, Room 354, 210 Martin Luther King Jr. Blvd.

PLEASE DISTRIBUTE WIDELY AND ADD TO ALL EVENT CALENDARS. THIS IS A RECURRING EVENT, 1^ST AND 3^RD THURSDAY OF EACH MONTH.

Thank you for your help in disseminating this vital information.

Dane County homeowners facing foreclosure have access to a free legal clinic staffed by volunteer lawyers and law students.  The Foreclosure Answer Clinic is held the 1st and 3rd Thursdays of each month from 11:00 a.m. to 1:00 p.m. on the 3rd floor of the City-County Building, 210 Martin Luther King Jr. Blvd, Madison.  The clinic operates on a walk-in basis, no appointments are necessary.  Homeowners should bring their Summons and Complaint as well as any other relevant paperwork.

The purpose of the clinic is to provide homeowners in foreclosure with basic legal information. Time is of the essence as homeowners generally have only 20 calendar days from the date they receive the initial lawsuit papers to file a formal response. The goal of the program is to increase access to the legal system.  A recent sampling of court filings shows that in 85% of cases in Dane County homeowners face foreclosure without the benefit of legal counsel.  The clinic will help those who are unrepresented become more engaged in the process.  Experience shows that homeowners who engage in the process early have better opportunities for a positive outcome.

The Foreclosure Answer Clinic is a collaborative effort of the Dane County Foreclosure Prevention Taskforce, the Dane County Bar Association and the UW Law School, with grant funding provided by the State Bar of Wisconsin and other support provided by Dane County.

Who We Are. The Dane County Foreclosure Prevention Taskforce is a coalition of public agencies, non-profit service providers and other community partners working together to develop sustainable alternatives to foreclosure in Dane County. For more information, please visit daneforeclosurehelp.org.

Our Mission. To develop and implement a coordinated response to the current foreclosure problem in Dane County.

Ellen Bernards

Community Relations & Education Specialist

GreenPath, Inc.

(608) 576-8658

www.greenpath.com

According to a report from real estate data firm RealtyTrac, lenders foreclosed on 78,133 properties in January, up 12 percent from the month before, but down 11 percent from January a year ago.

Bank seizures at states with non-judicial foreclosure processes jumped 23 percent, while states with a judicial process saw a decrease of 7 percent.

“It suggests the system is still frozen up. We should have seen a much larger increase in both overall activity and bank repossession,” said Rick Sharga, senior vice president at RealtyTrac.

“The numbers will inevitably go up, it’s just a question of will it be sooner or will it be later.”

The number of foreclosure filings, which includes default notices, scheduled auctions and bank repossessions, rose 1 percent to 261,333 in January. Compared to January last year, filings are down 17 percent.

States with the Highest Foreclosure RatesNegative Equity and Rising Rates: Toxic Cocktail for HousingUS Home Loan Demand Drops, Rates at 10-Month High
The report also showed 1 in every 497 houses received a foreclosure filing during the month. Five states — California, Florida, Michigan, Arizona and Illinois — continued to account for more than half of all foreclosure filings.

California alone accounted for more than one quarter.

Nevada, Arizona and California also had the highest foreclosure rates. Nevada had the country’s highest foreclosure rate for the forty-ninth month in a row. One in every 93 Nevada homes received a foreclosure filing in January, more than five times the national average, RealtyTrac said.

Ongoing foreclosures are a major headwind for a market that is already struggling with a glut of unsold houses. Data from Zillow Inc earlier in the week showed the number of single-family homes where the mortgage is worth more than the home increased to 27 percent in the fourth quarter from 23.2 percent the previous quarter, suggesting more potential foreclosures to come.

The Senate Committee on the Judiciary has scheduled a hearing entitled “Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?” for Tuesday, February 1, 2011 at 10:00 a.m. in Room 226 of the Dirksen Senate Office Building.

Senator Whitehouse to preside.

By order of the Chairman.

Witness List

Hearing before the
Senate Committee on the Judiciary

On

“Foreclosure Mediation Programs:
Can Bankruptcy Courts Limit Homeowner and Investor Losses?”

Tuesday, February 1, 2011
Dirksen Senate Office Building, Room 226
10:00 a.m.

The Honorable Robert Drain
United States Bankruptcy Judge
Southern District of New York

John Rao
Attorney
National Consumer Law Center
Boston, MA

Larry Britt
Homeowner
Riverside, RI

Dr. Anthony B. Sanders
Professor and Senior Scholar
The Mercatus Center
George Mason University
Fairfax, VA

Andrew M. Grossman
Visiting Legal Fellow
The Heritage Foundation
Washington, DC

Attorney Edward W. Harness has been named by Wisconsin SuperLawyers magazine as one of the top attorneys in Wisconsin for third consecutive year. Only five percent of the lawyers in the state are named by SuperLawyers.

The selections for SuperLawyers are made by Law & Politics, a division of Key Professional Media, Inc. of Minneapolis, Minn. Each year, Law & Politics undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by Law & Politics’ attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check.

This year Attorney Harness has continued his successes by:  protecting mortgage holders against junk fees; mandating proper accounting of payments; protecting mortgage holders’ rights in bankruptcy; he gained protections for divorcing couples seeking bankruptcy; he protected the rights of above-median income earners against credit card companies.

Attorney Harness continues to serve the consumers of South Eastern Wisconsin including those facing foreclosure; by enforcing consumer rights in the foreclosure process and protecting bankruptcy filer’s rights to seek mortgage modifications under Home Owner Affordable Modification Program (HAMP).

In addition to his consumer work Attorney Harness also taught continuing legal education courses in Consumer Bankruptcy Basics and Stripping Second Liens & Junior Mortgages.

For more information or to contact Attorney Harness his email is: edward@freshstartmke.com.  SuperLawyers can be found online at superlawyers.com, where lawyers can be searched by practice area and location.

HOMEOWNER QUESTIONNAIRE SHOWS BANKS VIOLATING GOVERNMENT PROGRAM RULES!

by Paul Kiel and Olga Pierce ProPublica, Aug. 16, 9:02 a.m.

Homeowners share their stories: ProPublica queried 373 homeowners from across the U.S. about their experience trying to get help.

Mortgage servicers regularly make errors and break the rules of the government’s mortgage modification program, according to hundreds of homeowners who responded to a ProPublica questionnaire.

Have you worked for a servicer in a loan modification call center? We want to hear from you.

Are you a homeowner who’s struggling to pay your mortgage? Are you seeking a loan modification through the government program? We want to hear from you.

For example, all homeowners who are rejected are supposed to receive a formal denial from their mortgage servicer, according to the program’s rules. But 136 homeowners reported that they had been rejected from the program without receiving a formal denial. Additionally, homeowners reported more than 1,000 instances of mortgage servicer errors, including losing documents and giving false information.

ProPublica received detailed responses from 373 homeowners — all of whom applied to get a modification through the administration’s foreclosure prevention program — and they tell a consistent story. Seeking a modification has been an infuriating, stressful nightmare: a black hole of time lost repeatedly calling an 800 number, faxing and mailing the same documents over and over, and coping with the ramifications of errors made by poorly trained bank employees.

Here’s what those homeowners told us:

• On average, they’d been seeking a modification for more than 14 months. The process is designed to last only a few months.
• Homeowners seeking modifications reported having to send the same documents nearly six times on average.
• 175 homeowners say they were advised, incorrectly, to fall behind on their mortgage in order to qualify for a modification.

While our respondents were self-selecting and thus are not necessarily a representative sample of all homeowners seeking a modification, the results give a detailed look at the problems we’ve been hearing about ever since the modification program launched in April 2009. The program provides subsidies to mortgage servicers, the companies that process mortgage payments and foreclosures, to provide modifications that reduce payments to a set, low level.

Although about 1.3 million homeowners have begun trial modifications through the program, fewer than 400,000 homeowners have received permanent modifications, according to Treasury Department data. Far more have either been denied a modification or have been left waiting months for an answer.

Who responded: Most were still waiting for help. (*This category includes homeowners who said they’d been denied a modification at least once, but were still seeking one. It may include some who were previously in a trial.)

The trials are supposed to last only three months, but have lasted at least twice that long for hundreds of thousands of borrowers. Despite violations of the program guidelines such as the extended trials, the Treasury Department has not penalized any servicers.

The experience, homeowners told us, isn’t getting any better. We asked homeowners still in the process if their experience had improved in recent months. Only 47 of 281 said it had. More than 100 said it’s getting worse.

Here are the highlights from their responses:

The application process drags on and on. For most, it’s lasted more than a year. As a result of the delays, homeowners fall further behind, putting them in danger of foreclosure and making it less likely they’ll qualify for a modification. About two-thirds of these homeowners were still current on their mortgages when they began the process, but most have now fallen behind.

Falling behind: Many homeowners defaulted while seeking a modification.

Seeking a modification not only takes a long time, but can be time-consuming. Nearly half of the homeowners reported spending more than 10 hours per month (collecting documents, waiting on the phone, etc.). Most said they call, fax or mail once a week or more.

Time drain: Each month, homeowners spend many hours trying to get help.

Many complained of speaking with an exhausting catalog of call center employees. “Just to name a few: I have spoken with Richard, Sheronda, Krisit, Alyssa, Vanesa, Walter, Eden, Porcha, Donald, Lady, Gary, Leo and Kelly,” said Christina Pandora, who is trying to hang on to her home in Center Conway, N.H.

John Mechem, spokesman for the Mortgage Bankers Association, said: “While 14 months can be an extremely long time to a borrower in distress, it also reflects the difficulty of completing a workout.” The servicer might evaluate the homeowner for a variety of options, he said, sometimes restarting the process if the homeowner starts down one path and turns out not to qualify.

Costly errors: Homeowners say frequent servicer mistakes complicate the process.

Mortgage servicers not only delay the process, but make a host of errors. The most common problems had to do with servicer mishandling of documents. On average, homeowners who completed the questionnaire have been asked to submit the same documents more than six times. The most common reason for having to resend the documents — in over 270 cases — was that the servicer claimed never to have received the documents or had simply lost them. The next most common reason was that documents were outdated. Homeowners frequently complain that servicers take so long to evaluate modifications that the documents become outdated and they must be sent again. That happened in 252 cases. In about 200 cases, homeowners were told their documents were incomplete.

“It’s like a bad joke on a version of ‘Groundhog Day,’” said Kim Camacho, a homeowner from Arizona who said her servicer has asked for the same documents over and over.

Mechem, of the MBA, said servicers “have gone to great effort and expense to improve document handling to try and avoid this happening.” He added that some of the requests and delays may be because servicers have to collect new income information each time a homeowner’s circumstances change, such as a job loss.

Servicing employees frequently, and incorrectly, suggest homeowners should fall behind on a mortgage in order to get help. Though servicers and housing counselors agree it is never a good idea to fall behind on your mortgage if you can help it, 175 homeowners reported being advised to do just that.

Servicers often make mistakes that can result in denial. More than 200 homeowners said their servicer had claimed they hadn’t sent in documents that the servicer had never requested. Nearly 150 said their servicer falsely accused them of not responding to attempts to contact them, and 135 said a servicer had made an error in calculating their income, perhaps the most important factor in whether a homeowner qualifies for a modification.

The reason for denial is often unclear. Most denied homeowners reported hearing different and sometimes conflicting reasons from different servicer employees for why they didn’t qualify for a modification. Two-thirds of those who had been denied — 174 customers — said they had that experience.

Under the government program, if a homeowner applies for a modification and is rejected, the servicer is required to provide a written denial, which is important because it allows homeowners to verify the information the decision was based on. But a majority of the respondents who were denied said they never received a rejection letter. Another 15 percent said they got one only after asking for it.

The MBA’s Mechem emphasized that servicers have been required only since the beginning of this year to provide written denials and said that there may be cases where a homeowner is not owed one because the homeowner never formally applied for the program. The program rules define a formal application as submitting income information either in writing or over the phone.

ProPublica has been asking homeowners since last summer about their loan modification experience, and we’ve heard from over 1,000 homeowners. Over the last month, 373 respondents filled out the questionnaire in response to a request we e-mailed to hundreds of homeowners and posted on our site. Thanks to loansafe.org for posting our callout. If you’re a homeowner who has sought or is seeking a mortgage modification, we want to hear your story.

More help for local residents struggling to keep their homes is available in two upcoming free workshops sponsored by the Dane County Foreclosure Prevention Taskforce.

Attendance is required at both sessions, to be held from 6 p.m. to 8 p.m. Monday, Sept. 20 and Sept. 27, at Goodman Community Center, 149 Waubesa St., Madison, between Atwood Avenue and Milwaukee Street.

Organizers said the sessions will help participants learn about programs to help manage their mortgages, along with tools and resources for making better-informed decisions. The sessions also will feature small group conversations with housing counselors, attorneys, real estate agents and financial educators.

Registration is not required but is recommended. You can register by contacting taskforce co-chair Ellen Bernards at 608-576-8658 or ebernards@greenpath.com.

The Dane County Foreclosure Prevention Taskforce is a coalition of public agencies, non-profits and other community providers working together to develop alternatives to foreclosure in Dane County.

You can get a sense of the county’s continuing foreclosure problem in this story I did for the State Journal in August with the latest available numbers. Foreclosures in July were down for the second straight month — which is rare in recent years — even as historical totals remain high.

A preliminary count by Madison-based ForeclosureAlarm.com showed 2,511 filings in courts around the state last month, compared with 2,484 in August of 2009

The August filings jumped 13.7% from 2,208 in July of this year.

In Milwaukee County, foreclosure cases rose to 514 after two consecutive months with fewer than 500, court records show. In August of 2009, there were 558 in Milwaukee County.

In the seven-county southeastern Wisconsin region, foreclosure filings topped 1,000 for the first time since April, at 1,037. Foreclosure filings increased in Kenosha, Ozaukee, Racine, Walworth, Washington and Waukesha counties from August of last year.