So why have foreclosures stalled? The answer is that the process of recording mortgage notes is so screwed up that it’s stopped foreclosure activity worth hundreds of billions of dollars.

This issue has been known for years, since at least the 2007 Boyko decision when a federal judge in Ohio refused to foreclose 14 homeowners. The problem: The loan notes, the paperwork needed by a lender to show standing in a foreclosure case, could not be produced in court. No note, no ability to foreclose.

One problem is that loans around the country have been originated locally and then sold into MERS — the Mortgage Electronic Registration Systems. The idea was that once ownership of a note had been sold to MERS, then MERS members could electronically trade ownership of the note back and forth without physically registering each sale and purchase with local government recordation offices — or paying the recordation fees.

However, it turns out that the electronic system is hardly foolproof and we have also discovered that many foreclosure claims were made on the basis of robo-signing — a process where a clerk signs hundreds if not thousands of foreclosure affidavits per day. The problem, of course, is that if hundreds or thousands of sworn statements are made per day then some of them could be wrong — meaning that someone might lose a home unfairly and unjustly.

As a result of the MERS system and the separate robo-signing scandal courts in many states now demand better paperwork before a home can be foreclosed. There’s a stalemate — lenders can’t foreclose in many instances, borrowers will not pay and the bottom line is an historic set of payment delays.

RealtyTrac reported for the first half of 2011 that the foreclosure process an average took 318 days from the initial foreclosure notice to the completed foreclosure, up from a revised 298 days in the first quarter and up from 277 days in the second quarter of 2010.

“The foreclosure process took the longest in New York,” said the company, “at 966 days on average for properties foreclosed in the second quarter, followed by New Jersey at 944 days and Florida at 676 days. Texas posted the shortest foreclosure timeline, at 92 days for properties foreclosed in the second quarter, followed by Virginia at 106 days.

Also, said RealtyTrac, “U.S. REO properties that sold in the second quarter took an average of 178 days to sell from the time they were foreclosed, up slightly from 176 days in the first quarter and up from 164 days in the second quarter of 2010. REO properties took the longest to sell in New York, at 309 days, followed by New Jersey at 285 days and Minnesota at 268 days.

“U.S. properties in the foreclosure process that sold in second quarter (typically short sales) took an average of 213 days to sell from the time they entered the foreclosure process, down from 228 days in the first quarter but up from 195 days in the second quarter of 2010.”

Foreclosures: No Mortgage Payments For Years is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Okay, so what’s the big deal?

In basic terms, the rule says that if you apply for a loan on July 30th or thereafter the lender must provide you with a good faith estimate of closing costs (GFE) within three business days. Also, you must get your estimate at least seven business days before closing — though borrowers can waive this requirement if they need to close in less than a week.

The new rule also says something else: The lender cannot charge you any fees before delivering the good faith estimate, the lone exception being a reasonable charge for a credit report.

The July 30th standards — which many lenders have already adopted — forces lenders to give notice and tell you the real costs of closing BEFORE you pay out any significant money for a new loan.

“Creditors,” according to the Federal Reserve, “must deliver or mail the early disclosures at least seven business days before consummation. If the APR contained in the early disclosures becomes inaccurate (for example, due to a change in the loan terms), creditors must ?’redisclose’ and provide corrected disclosures that the consumer must receive at least three business days before consummation. The disclosures also must inform consumers that they are not obligated to complete the transaction simply because disclosures were provided or because a consumer has applied for a loan.”

In other words, you can provide basic application information to a lender and elect not to go through with the loan and only be out the cost of a credit report.

Needless to say, some lenders who try to rope in borrowers with stiff “application fees” are appalled by the new regulations, which to them are — of course — unfair, unkind, impractical and no doubt socialistic. To humans who need a mortgage, the new rules merely create an element of fairness in the marketplace.

New Pro-Borrower Mortgage Rules Set For July 30th is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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• A Notice of Default — a public notice that loan payments have been missed.
• A Lis Penden — notice of a suit against a property owner.
• A Notice of Sale — essentially an announcement giving the time and date of a planned foreclosure sale.

If you receive any notice from your lender which is or seems to be one of the three notification forms above — or any document from your lender or servicer which claims that a payment is late or has not been made — contact your lender immediately. Don’t wait. This is not a problem that will go away, get better or which can be put off.

Your first step should be to see if you can bring the loan current. If not, ask if you can work out an arrangement (a loan modification) with the lender.

In some states a lender may need to go to court to get a foreclosure order, in other states the mortgage agreement alone will allow the lender to foreclose. Note that foreclosure rules and notifications vary by state and that in some jurisdictions you can lose your home in as little as 37 days.

For help, immediately contact an attorney, legal clinic or community housing group. For additional information online, go to the RealtyTrac Foreclosure Education Center.

What Are The Three Basic Forms of Foreclosure Notices? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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This is an important matter because if an application is not made, then a buyer may be in violation of the sale agreement. A violation of the sale agreement, in turn, could be grounds to forfeit the deposit.

Thus, buyers should go through the sale agreement with great care before signing to assure that all obligations are known and understood. Work with an appropriate professional such as a broker or attorney when reviewing a sale agreement.

When you meet with a lender, be certain to obtain a letter stating that you met and showing when. Immediately provide this letter to the seller’s broker in the manner required by the sale agreement.

How Quickly Must I Apply For A Mortgage? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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