HAMP Agreements Are Enforceable

Government Mortgage Program Allows Recourse Against Lenders For Compliant Homeowners

The Home Affordable Mortgage Program (HAMP) was started in 2009 to help homeowners avoid foreclosure, and its goal is to provide lower monthly payments to borrowers who have defaulted on their payments, or who are likely to default. It has been extended to December 31, 2015 and the requirements relaxed to encourage more applications. A typical HAMP homeowner may be able to reduce the mortgage payment as much as 35%. The biggest problem with the program is it does not reduce the principal amount of the mortgage.

The main obstacle to qualifying is the borrower must be employed, in order to document an ability to make the required monthly payments. Other requirements include a mortgage obtained before January 1, 2009, loans less than $729,750 on a residence, with higher limits on 2, 3 or 4-unit rental property, a financial hardship, and no recent felony conviction. Keep in mind the law is always changing, and if lower payments are needed, an application should be submitted. Read more HAMP Agreements Are Enforceable

Protection of California’s Anti-Deficiency Law Depends Upon the Lender and the Type of Loan

Forry Law Group: Real Estate and Civil AttorneysQ: I obtained a loan to purchase my single family residence in 2002 from Bank 1, and then I obtained line of credit secured by a second deed of trust on my residence in 2005 from Bank 2. Although I remain employed, the value of my property is less than the amount I owe on both loans and I have stopped paying the mortgages. If Bank 1 forecloses on its loan to me, will I still be liable for the amount I owe to Bank 2 on its loan?

A: A determination regarding whether a borrower remains liable for a debt secured by real property depends upon whether the California antideficiency statutes provide protection from a deficiency judgment. A deficiency judgment is a personal money judgment against the debtor for the difference between the price realized for the secured property at a foreclosure sale, and the balance remaining on the deed of trust being foreclosed and any other loans on the property. Read more Protection of California’s Anti-Deficiency Law Depends Upon the Lender and the Type of Loan