Category Archives: Foreclosure Law

“Ability to Repay” Rule Could Prompt More Foreclosures

USA Foreclosures 101

On April 26, 2012 the Kansas City Star published a column from the Philadelphia Inquirer’s Al Heavens analyzing the federal government’s new “ability to repay” rule. This rule was part of the Frank-Dodd financial reform act of 2010 aimed at getting rid of high-risk mortgages and cleaning up the home lending industry. Among other things the Frank-Dodd legislation essentially put an end to risky mortgage products like interest only and negative amortization loans. While parts … Continue reading →

Congress Considering Tax Issue With Foreclosure Settlement

USA Foreclosures 101

If you’ve been following the news regarding the foreclosure crisis you’re probably familiar with the settlement between five of the nation’s largest mortgage lenders and 49 state attorneys general. The $25 billion settlement was reached as a means of preventing further litigation against the banks for alleged “illegal” foreclosures. Interestingly enough, the thousands of homeowners expected to receive cash from the settlement will also be subject to income tax on that money. That is, unless … Continue reading →

Former Insurance Investigator Gets $18 Million From Foreclosure Settlement

USA Foreclosures 101

Back in February, 2012 the attorneys general of 49 states reached a settlement with five of the nation’s largest mortgage lenders to put an end to possible litigation surrounding allegations of fraud. The case was borne out of a thorough investigation and subsequent whistle-blower report by 63-year-old Lynn Szymoniak, an attorney and former insurance industry investigator. For her efforts Szymoniak earned some $18 million out of a total $25 billion settlement. In reporting the story … Continue reading →

Income Gained From Sale Of Foreclosed Homes Up For Taxation

USA Foreclosures 101

The Mortgage Forgiveness Debt Relief Act expires on the 31st of December 2012, and since short sales take a minimum of six months to complete, the income gained from the selling of a foreclosed home could be, once again, eligible for taxation. Millions of homeowners are now facing this grim reality because previously the income gained from the sale of a house undergoing foreclosure was tax-free, but after this year this won’t be the case … Continue reading →

New York Joins Other States To Move Foreclosures Along

USA Foreclosures 101

Frustrated by long delays and the seeming inability of mortgage lenders to complete the loan modification process, New York State’s courts are adopting new procedures that would allow judges to exercise more control over individual foreclosures. The measures are expected to help speed up the foreclosure process by forcing lenders to either modify loans according to the law or complete the foreclosure altogether. New York joins 19 other states taking similar measures to help bring … Continue reading →

New Jersey Ruling Opens Door For Foreclosures To Proceed

USA Foreclosures 101

In the state of New Jersey, home foreclosures have been virtually stalled since a court ruling a couple of years ago in which a Lakewood couple was able to forestall proceedings against them because court documents did not contain the name of the mortgage owner. Instead, only the name and address of the servicing company was listed, prompting the couple to claim in court that the documents were inaccurate and essentially illegal. However, last January … Continue reading →

Foreclosure Problems Not Entirely The Fault Of Banks

USA Foreclosures 101

If nothing else, the recent settlement between 49 state attorneys general and five of the nation’s largest mortgage lenders has exposed many weaknesses in the current system of mortgage lending and foreclosures. However, it’s important that both consumers and the media refrain from jumping on the banks and blaming them exclusively. They certainly do own their fair share of the blame here, but we cannot leave out the responsibility of consumers and the federal government. … Continue reading →

Florida Foreclosure Bill A Good Compromise

USA Foreclosures 101

It’s no secret that the state of Florida has one of the highest rates of abandoned houses in the nation. The housing boom of the late 1990s produced a wave of construction projects promising investors big returns if they would simply build the houses. When the bust occurred some 10 years later many of those same investors were left with empty houses they could not sell. As a result, neighborhoods with large numbers of abandoned … Continue reading →