The original legislation was sponsored by state Rep. Mike Jacobs, a Republican lawmaker whose district includes DeKalb County.  The bill is a carryover from last year, when it stalled as lobbyists for cities and counties raised concerns that the bill could have unintended consequences. Several people representing groups who opposed the original version remarked that they had not seen the updated proposal until Monday’s committee hearing and were still evaluating whether it is an improvement.  ”County and city elected officials are hearing a lot from the public about this,” said Clint Mueller, a spokesman for the Association of County Commissioners of Georgia. “There are a lot of foreclosed and properties that are not being taken care of. We have no idea where to even begin to find out who is responsible.”  Still, Mueller said it is important to ensure that municipalities are not punished in an effort to address the issue through state legislation.  ”It could have far-reaching effects if it’s not done right,” he said.  If approved, the law would take effect July 1.

Foreclosure auction sales through November fell year over year from 2010’s 11n-month total of 18,728 to 14,854 during the same period this year. Foreclosure filings were also down through November, falling to 23,556 filings year-to-date this year from last year’s 11-month total of 32,982.  Year-to-date through November, the counties with the largest decreases in foreclosure filings, year-over-year, were Mesa County and Denver County, where filings decreased by 35.2 percent and 32.2 percent, respectively. Pueblo County reported the smallest decline in filings with a decrease of 12.5 percent from the first 11 months of 2010 to the same period this year. All counties surveyed reported year-over-year decreases in foreclosure filings.  For the first 11 months of this year, all counties also showed decreases in foreclosure auction sales when compared to the same period last year.

The counties with the largest decreases in foreclosure auction sales, year-over-year, were Broomfield County and Adams County, where auction sales decreased by 40.3 percent and 27.0 percent, respectively. Pueblo County reported the smallest decline in auction sales with a decrease of 9.1 percent from the first eleven months of 2010 to the same period this year.  The county with the highest rate of foreclosure sales during November was Adams County with a rate of 681 households per foreclosure sale. Mesa County came in second with 792 households per foreclosure sale. The lowest rate was found in Boulder County where there were 3,402 households per foreclosure sale.

A shift to short sales is momentous for lenders, which only two years ago handled delinquent mortgages almost exclusively by foreclosure. After taking the homes back, banks resold so many for such low prices that sales pushed the area’s median home price to a 10-year low.  Now, top lending executives say, they are seeing that while short sales mean a loss for the bank, that loss is less than they would suffer from a foreclosure auction. At the same time, housing-market indicators are showing positive signs.  Arizona’s mortgage delinquency rate is down 32 percent since 2009, a bigger drop than any other state, de Laveaga said. He said the fact that the nation’s three biggest lenders sent executives to speak to Arizona real-estate agents and mortgage brokers in the audience is a sign they want to do more to slow foreclosures.

Here’s what else Bank of America mortgage holders need to know about the program:

Q.  When do the homes have to be listed for sale?

A.  Between
Sept. 26 and Nov. 30. The deal must close by Aug. 31, 2012. Sales
already under contract are not eligible for the cash assistance.

Q.  Can homeowners with good payment histories qualify if their
loans are under water?

A.  Yes. Bank of America selected Florida
for the test-and-learn program to determine whether the
additional incentive increases the use of short sales instead of
other more expensive, and perhaps less dignified, transitions
like foreclosure. If it works in Florida, the bank might roll it
out in other parts of the country.

Q.  How will the payouts be determined?

A.  Qualified homeowners
will get 5% of the unpaid balance as of August 2011, with a
minimum payout of $5,000, Bank of America says. For instance, a
homeowner who owes $100,000 as of August would get $5,000 (5% of
$100,000). A homeowner who owes $200,000 would get $10,000. And
so on up to a maximum of $20,000. The sales price does not impact
the payout.  To sweeten the deal further, Bank of America will
consider waiving the deficiency on the loan, which allows
homeowners to sell the house for less then they owe without
having to make up the difference to the bank. That can save
homeowners thousands of dollars and enable them to buy another
home quicker.

Q.  Will the program impact a homeowner’s credit rating?  It
depends on whether the loan is delinquent or current when the
home is sold. The short sale will be reported as any other short
sale is reported, in line with national credit reporting
standards, Bank of America says. If “short sale” is listed on a
credit report, the score will drop by at least 100 points,
experts said. But some short sales are being listed as “paid in
full,” which wouldn’t have the same detrimental impact on a
credit rating.

Q.  Are the cash payouts government funded?

A.  No. Bank of
America will pay all incentives.

Q.  How can homeowners get more information?

A.  Bank of America
has set up a dedicated team of short-sale specialists to answer
questions related to this test-and-learn program. The number is
(877) 459-2852

A spokesman for BOA said the program is being tested in Florida, and if successful, could be expanded to other states. Wells Fargo and J.P. Morgan Chase have similar short sale programs, sometimes called “cash for keys.”  Wells Fargo spokesman Jason Menke said his company offers up to $20,000 on eligible short sales that are left in “broom swept” condition. Although the program is not advertised, deals are mostly made on homes in states with lengthy foreclosure timelines, he said.  And caveats exist. The Wells Fargo short sale incentive is only good on first lien loans that it owns, which is about 20% of its total portfolio.  BOA’s plan excludes Ginnie Mae, Federal Housing Administration and VA loans.  Similar to the federal Home Affordable Foreclosure Alternatives program, or HAFA, which offers $3,000 in relocation assistance, the BOA program may also waive a homeowner’s deficiency judgment at closing.  A deficiency judgment in a short sale is basically the difference between what the house sells for and what is still owed on the loan.  HAFA, which began in April 2010, has seen limited success with just 15,531 short sales completed nationwide through August.

The new option, called a Standard Modification, is designed for borrowers who are ineligible for a Home Affordable Modification Program (HAMP) loan modification or have previously defaulted on a HAMP or other loan mod. For those who are approved, the program reduces a borrower’s mortgage principle and monthly payment by at least 10 percent each, thereby making the payments more affordable.

To qualify, homeowners must be at least 60 days past due on their mortgage, that is, having missed at least two monthly payments. Those who are not at least 60 days past due can qualify by proving they are in imminent danger of default, through demonstrating an eligible hardship and providing verification of income.

Mortgages that are modified will have their interest rates set to 5 percent and the amortization period (time required to pay off the mortgage) extended to 40 years from the time of the modification. Lenders approving such modification will receive cash incentives of up to $1,600 per homeowner approved.

Borrowers approved for the program must undergo a three-month trial period during which they must keep up with their new payment schedule before the loan modification is finalized and made permanent, similar to HAMP. Lenders will have incentives to encourage them to finalize borrower’s status within two months of the end of the trial period.

Lenders may begin trial modifications for approved homeowners under the program as soon as Oct. 1, 2011. As of Jan. 1, 2011, all borrowers seeking a loan modification of any type on a Freddie Mac-supported mortgage must be evaluated for eligibility under the program.

The new Standard Modification replaces an existing type of Freddie Mac loan modification called a Debt Coverage Ratio, which now is being referred to as a Classic Modification. The government’s HAMP loan modification will continue to be available as well.

More info. here.

http://community.nasdaq.com/News/2011-09/freddie-offers-new-loan-mod-option.aspx?storyid=94347

Barclays analysts said Demarco’s statement argues for improving the HARP program, not expanding it. “It seems that the FHFA is not looking to increase the amount of borrowers eligible for the HARP program by expanding the cut-off date, but is rather
looking to enhance the efficacy of the existing program for current HARP-eligible borrowers,” according to the BarCap analysts. Changes to the two-year old federal plan have some concerned about a possible wave of refinancings and what that would do to mortgage-backed securities. “There is also likely to be a renewed focus on refinancing high LTV borrowers with strong pay histories, in a shift from the current scenario, where it effectively became a streamlined refinancing vehicle for low LTV borrowers,” the analysts said.