Portland, Maine – Homeowners who lost their homes to questionable foreclosures from 2008-2011 may be eligible for $2,000 — not much consolation.
Much has been reported about the recent robo signing settlement reached by attorneys general last week.
The simple fact is – this will do nothing to stop the speed and scope of the foreclosure pipeline, which currently has millions of families on track to lose their property.
In the State of Maine, there are currently over 6,000 households that are in loan default – meaning they are at least 30 days behind. "Unfortunately, many Maine families see this settlement on the news and think this is their saving grace and now their loan modification application will be approved because of this settlement." said Marty Macisso, a South Portland Realtor specializing in short sales "The fact about this settlement that many homeowners don't realize is that Fannie Mae and Freddie Mac are not part of this and those who have their loans owned by them are not going to see any form of relief from this lawsuit."
Macisso is referring to the government mortgage agencies Fannie Mae and Freddie Mac, who control and own the rights to 90% of the mortgages in the United States as secondary market makers. Local mortgage brokers over the past several years in the real estate boom, sold off the loans after closing and the mortgages and notes are actually owned by these institutions, who were bailed out by tax payers a couple years ago.
"Its sad, because you will have many families, who want some form of relief from a foreclosure that may have been processed unlawfully and this settlement does nothing for them unless the loan belongs to a participating lender." said Macisso "Again, 9 out of 10 loans are not going to qualify and these poor families won't see a dime."
The settlement also provides funds to these participating lenders to help with principal write downs and loan modifications. "Homeowners need to go online and search for Fannie and Freddie loan lookup tools to see if they are wasting their time hoping their loan modification will be approved…because most homeowners will apply 3-4 times before giving up and moving forward with a short sale."
In a Maine short sale typically gets the seller $3,000 for relocation help and settles the debt completely, while stopping all foreclosure reporting on the credit report. Lenders are giving new mortgages to homeowners after 24 months of a short sale and for homeowners who have not missed a payment but completed a short sale – there is no wait time for qualifying for a new mortgage.
"The Maine short sale is a final solution to this mess, as many homeowners who want to keep their homes but cannot afford it, begin loose faith in the government's loan modification programs." Macisso says "Its some solace after a long emotional battle and I have seen dozens of families make some big turnarounds after a short sale."