California has been declared as one of the 20 states in the country with a high foreclosure and unemployment rate. The Department of Treasury even allotted billions of dollars for loan modification programs, mortgage subsidies, and rental assistance to homeless Americans living in these regions. However, the Obama’s home rescue program has been proven futile due to the number of unsuccessful requests. As a result, many desperate homeowners turn to an attorney for foreclosure prevention assistance. Due to the number of foreclosure filings in the country since the beginning of the mortgage crisis, the loan modification industry has boomed. Along with the popularity of loan modification companies, fraudulent individuals has lurked the industry as well to take advantage of other people’s situation.The Federal Trade Commission has been receiving thousands of complaints from homeowners across the United States claiming that their loan modification attorney or expert has required large upfront fee to clients. These fraudulent individuals take upfront fees and never render any form of services leaving these homeowners more desperate in saving their properties. In order to stop the growing number of fake firms, the senate has passed a new bill called the SB 94. Senate Bill 94 is authored by a Californian Senator and the current Chairman of the Senate Banking Committee, Ron Calderon.The law prohibits all experts to ask for up front fees saying that it is the only surest way to prevent fraud in the industry. Only after the service has been rendered and when a successful loan modification takes place will the client pay for the assistance. The problem with this new law is that lawyers are put in a dangerous side in the agreement. Although the homeowner’s rights are being upheld, SB 94 put lawyers as the unsecured creditors of their clients. Mortgage lenders are being paid out of escrow during the end of the contract; lawyers on the other hand must send a bill to the homeowner without securities.When a homeowner fails to pay off his debt to the attorney, the lawyer will be left with no choice but to sue his client. This is not beneficial for both sides but the lawyer must do something in order to get his rightful compensation. This process will turn the table around; lawyers even predict that if the law stays, more and more legal professionals will have to close their doors to homeowners needing help for fear of non-remuneration at the end of the transaction. Their fear is logical; troubled homeowners have so little to pay for their mortgages which is why naturally, attorney’s fees without securities will be put practically last in the payment list.
Tennessee foreclosure residential properties have reached to over 24,000 according to RealtyTrac, a California-based firm that records foreclosure activities in the United States. The trend has been causing a lot of trouble to borrowers that the federal government has made a program in order to give help for homeowners living in the hardest hit areas such as Tennessee.The Stimulus Second Mortgage Program is under the management of The Tennessee Housing Development Agency which aims to assist homeowners in purchasing a new house by providing a loan that funds at least 3.5 percent of the total housing cost. In order to qualify for the program, you have to meet the following requirements:You are a first time home buyer with a credit score of at least 620.
You will be able to repay the Stimulus Loan until June of next year (without interest).
Homebuyer must not exceed the maximum household income set by the THDA.
The mortgage must be under the FHA.
Borrower must undergo a Homebuyer Education provided by the state of Tennessee before he or she can apply for the said mortgage help.
The loan servicer (both on the first and second mortgage) must be approved by the HUD. Furthermore, mortgage must be serviced by the U.S. Bank.In order to repay the loan, you may use your federal tax refund and repay before June, 2011. If you are unable to pay after the due date, an interest rate of 1 percent will be added on your regular monthly payment which must be paid within the period of ten years. Make sure that debts are paid otherwise; your THDA Stimulus Loan will be in default.Recently, the Congress passed the 2009 Tax Act also known as the American Recovery and Reinvestment Tax Act of 2009. The new bill gives exceptions to homeowners who have purchased their first homes between January to November, 2009. This means that the new homeowner can receive a tax credit without the required repayment. The only requirement is for the homeowner to occupy the property for at least three years. This is a great help for homeowners who cannot afford to repay their mortgages in a short period of time.To obtain this new help for homeowners, visit the Tennessee Housing Development Agency at 404 James Robertson Parkway, Suite 1200, Nashville, TN. The THDA offices are ready to serve you during weekdays from 8 am to 4 pm. For inquiries and suggestions, look for Ed Lozier or contact him at 615-815-2082. You may also log on to http://www.thda.org/ for additional information regarding the different programs available in the state of Tennessee.