By Attorney, David Brown
July has been a very exciting month for modifications and related issues. The U.S. Treasury announced an increase in the percentage of negative equity that it will refinance under the Making Homes Affordable Program. The U.S. Treasury is also placing additional pressure on lenders to do more loan modifications. The Arizona State Legislature amended the anti-deficiency statute to require the original borrower to have used or utilized the house as a residence for six consecutive months.   The U.S. Treasury announced this month that it has increased the amount that it will refinance from 105% of the market value of the property to 125% of the value. This is very import because it extends the program for eligible borrowers who are underwater to refinance their homes with today’s favorable rates. This program is limited to Fannie and Freddie loans and the borrowers must be current. We will discuss all the eligibility requirements at our July 21, 2009 seminar.   Last week the U.S. Treasury announced that it will be meeting with all of the major lenders on July 28, 2009 to discuss their poor performance in terms of modifying loans under the Making Homes Affordable Program.   Last weekend’s New York Times article titled “Taking Big Mortgage Servicers to the Woodshed” quotes Mark Zandi of Moody’s Economy.com as follows:  “It’s not just California and Florida anymore….Foreclosures are taking place coast to coast…..Foreclosure mitigation needs to be front and center.”  In this article Mr. Zandi predicts that this year some 15 millions homes will be underwater which means the loans will be at risk for foreclosure.    Mr. Zandi stated in his June newsletter that “The key threat or risk to the economy is whether the policy efforts start to work to stem the rise in foreclosures. This is really important to finding the bottom to the housing market and also, more broadly, the end of the recession and the beginning of economic recovery. The President’s loan modification plan has to kick in soon, otherwise all this optimism with regard to the end of the recession and housing market will be misplaced.”   The New York Times article referenced above states that many lenders are not engaging in good faith modification negotiations. They believe that if they place enough foreclosure pressure on borrowers they will bring their loans current. The term they use is “self cure.”   I look forward to discussing these trends and updates with you at one of our FREE Loan Modification seminars. The next two are July 21st and  August 18th at 6pm. Please also remember to tune into our weekly radio show, "The Davis Miles Legal Power Hour" on the air every Thursday at 1:00pm at KFNN 1510 where we give you up to the minute information on developments regarding Loan Modifications and many other areas of the law.