hom intro #75: your mortgage documents...filled with surprises

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Home Ownership Matters Training Institute

Your Mortgage Documents...Filled with Surprises

INtro #75

“Your Real Estate Advisor”

GoalThe goal of this intro is to direct your attention to the little landmines hidden in your mortgage documents—the surprises which can throw you for a loop when you least expect them.

Legal

Lethal

Lurking

Hidden in Plain SightCopyright © 2008. Home Ownership Matters, LLC. All Rights Reserved. 2

Thirty—That’s 30 YEARS of a

Relationship...

YOU and YOUR BANK

IF’s AND’s BUT’s

Let’s discuss the More Problematic Sections(in no particular order)

Copyright © 2008. Home Ownership Matters, LLC. All Rights Reserved. 3

1. Servicing of Your Loan


Servicer A — Aurora Loan ServicingServicer B — Lending Services of TexasServicer C — Trimble Financial

USA Bank

2. Occupancy/Securing of Property

This house has been found

vacant and unsecured and

has been re-keyed in

accordance with...


3. Default/Acceleration (also called breach)

[Date]

[Addressee]

Dear [Name]:

Reference is made to a certain promissory note under date of [date],in the original amount of $[dollar amount].

You have defaulted under said note in that the installment due on [date],In the amount of $[dollar amount] has not been paid.

Accordingly, demand is hereby made upon you for full payment of theentire balance on said note in the amount of $[dollar amount], includingaccrued interest to date.

In the event the entire balance is not paid within the next seven days, we shall refer this matter to an attorney resulting in additional costsof collection.


4. Force-Placed Insurance

Dear Mr. Smith,

We are hereby notifying you that

the insurance on your home is now

being provided by XYX Company.

The annual premium is ________ and

that has caused an increase in your

monthly payment of $75.00.

Your escrow was short...


5. Escrow Adjustments

Your new mortgage payment, effective last month,

is _____$$$$$$$____


6. Prepayment Penalty

Yes, you can pay us back early...

But it’s going to cost you.

$5,000$8,000

$10,000Copyright © 2008. Home Ownership Matters, LLC. All Rights Reserved. 9

7. Power-of-Sale


• No court appearance required

• Fast as lightning

• Your home ownership rightscould be stripped in as little as 2-3 months

• Option available to lenders in 27 statesIs your state one of these?!

*Non-judicial Foreclosure is the primary method of foreclosure in 17 states.Source: http://www.all-foreclosure.com/procedures.htm

8. Due on Sale Clause

Creates an issue for contract sales.*Watch out for the investor who tells you it doesn’t matter


9. Release of Liability and/or Assumption Section


*What unsuspecting Co-borrowers look like

10. Deficiency

2 years later...

“We came up a little short when we sold your old home...”


Recommended Action

TODAY...

Pull out your mortgage documents and study the above mentioned sections to see what your obligations are under the terms of the mortgage and note. Review these with an attorney if you are not absolutely sure that the actions you are considering to deal with your housing situation will not be made worse based on the sections we discussed today.

Happy Reading and Best of Luck!


Resources

Blog: HomeOwnershipMatters.Blogspot.com

Has numerous references on this subject which will be enlightening

HOM’s Website: http://www.HomeOwnershipMatters.com

HOM Intros: #26, #35, #50, #63 and #74

Websites You Might Check Out:• http://www.dsnews.com•http://www.mortgagenewsdaily.com•http://www.implod-o-meter.com•http://www.hud.gov


Partial List of Webinars Offered by HOM


Vol 01: Getting to the Closing Table Vol 02: Is it Fraud or “just predatory”? Vol 03: Brokers: Are Your Agents Putting You at Risk? Vol 04: PALM—Practical Application of Loss Mitigation Vol 05: Secrets of a Professional BPO Vol 06: Fair HousingVol 07: Seller is the Lender Vol 08: Short Sale: Not Your Typical Transaction Vol 09: Foreclosure Intervention: Why Do You Need a Specialist?Vol 10: Buying REO is Risky Business

The BT Series

Vol 11: Buying TIME—When Your Money is Running OutVol 12: Mr. Smitherman—The Connection for Your Housing SituationVol 13: Q W R—In DetailVol 14: Foreclosure: a PROCESS & an EVENTVol 15: Taking Charge of Your Housing Situation

HOM Disclaimer/Hold Harmless

The material provided is deemed to be reliable and accurate at the time of publication. However, the subject matter is undergoing almost constant change and you should assume responsibility for current research on procedures, policies, guidelines and changes in the law concerning your housing situation. Trainer has relied upon such sources as the National Consumer Law Center but is NOT an attorney. This information is provided as a community service. Please seek legal counsel to address your specific mortgage or housing situation and to determine your rights and responsibilities. Home Ownership Matters, LLC and contributing author hereby disclaim any responsibility or liability which may be asserted or claimed arising from reliance upon the information provided.Copyright © 2008. Home Ownership Matters, LLC. All Rights Reserved. 17

SurveyYou can take the survey online at: http://www.surveymonkey.com/s.aspx?

sm=2M63rhnWI80dBfs72fg_2f_2fQ_3d_3d

Or fax this to (Toll Free): (877) 587-4507

Name: _________________________________ Phone: _____________________

Firm Name (If Applicable): ______________________________________________

Address: _____________________________________________________________

City: ____________________ State: ____________ Zip: ______________________

E-Mail Address: _______________________________________________________

I would like to be added to the HOM Distribution List: ___ Yes ___ NoI understand that my information will not be sold or shared with anyone other than HOM

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Please let us know if you have any questions or comments:

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What would you like to see HOM do in the future? (Webinars, courses, e-mails, articles, etc):

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Thanks for your input, we really appreciate it!Copyright © 2008. Home Ownership Matters, LLC. All Rights Reserved. 18

hom intro #75: your mortgage documents...filled with surprises

Documents

home ownership rights

old home

hom copyright

sale copyright

event vol

loan copyright

lender vol

housing situation vol