“Never let a serious crisis go to waste.” Rham Emanuel [PCQ Translation: Take advantage of  economic tragedy to regulate the lives and activities of more citizens than you ever dreamed possible.”]

What is the SAFE Act?

SAFE is the acronym for The Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Although it is federal legislation that was enacted in response to the national credit and mortgage crises, it requires each state to enact regulatory legislation.  On August 30, 2011, HUD published its Final Rule for SAFE. Continue reading “Seller Carry-Back Transactions in Oregon – Are They SAFE?”

Introduction. After three years of counseling folks in the throes of making a distressed housing decision, I have to honestly ask myself if loan modification today is a prudent, wise, or productive endeavor.  Regrettably, in most – though not all – cases, the answer is an emphatic “No.”  Of the many consumer advocates, attorneys, and counselors out there, I may be in the minority.  But I suspect that of the many consumers who have gone through the modification process, I am in the majority. Continue reading “The Myth of Lender Modification”

“To be forewarned is to be forearmed.”

The term “deficiency” arises in the context of a borrower’s default to their lender.  It refers to the difference between what the lender/servicer recovers, e.g. through short sale, deed-in-lieu-of-foreclosure (“DIL”), or foreclosure, and the total debt owing.  Let’s go through each one, and see how and when the issue is likely to arise:

1.     Short Sales. This is a sale of the distressed property where the net sale proceeds [after deducting costs of sale, such as real estate commissions, escrow, title insurance and recording fees] are insufficient to pay the total indebtedness due, i.e. principal, interest, late fees, and lender advances, such as property taxes and insurance. The difference between the amount recovered and the amount due is the “deficiency.” Continue reading “Borrower Exposure to Deficiency Risk”

If  the politicians in Washington today were instead the CEOs of private industry, they’d all have been fired by now.”  Anonymous [sort of]

Introduction. At the end of 2012 we all went over the Fiscal Cliff like Wile E. Coyote.  But unlike Wile E., we were able to grab a hold of a small scraggly branch on the way down, and eventually climb back onto terra firma…for the time being. The next looming crisis – the Debt Ceiling negotiations – is the second feature in this macabre satire called “Your Government at Work,” so don’t go away just yet![1]

Leaving a discussion of who’s to blame for another day [there’s enough blame to go around], how did the real estate industry fare in the Fiscal Cliff legislation [technically known as H.R. 8, American Taxpayer Relief Act of 2012], that was moved, seconded and passed on January 2, 2013?  Well, considering what was at risk, it appears we dodged a few bullets, albeit temporarily.  So here’s what the scorecard looks like right now: Continue reading “2013 Fiscal Cliff Legislation And Its Impact On The Real Estate Industry”

My fondness for alliterations compels the title.  I could not resist.  The purpose of this post is to welcome Lake Oswego attorney extraordinaire, Kelly Harpster, to the blogosphere – that vast otherworld known as the Internet, where one can accomplish two respectable goals:  (a) Sharing important information on self-selected topics, and (b) doing so through the lens of our own personal  Weltanschauung.

Quite coincidently, Kelly and I commenced our solo practices at approximately the same time – early 2010.  We had both previously worked at the large Portland firm, Davis W right Tremaine.  As a further coincidence, almost immediately after opening our separate practices, we became interested – nay, fascinated – with the world of bank foreclosures, and the havoc being wreaked upon Oregon homeowners who found themselves in properties and debt from which an orderly retreat was nearly impossible.  For both of us, it became clear that the financial services industry, from Wall Street investment houses such as Goldman Sachs, to the lending and servicing industries, such as Bank of America, Morgan Stanley, and Wells Fargo – to name a few of the survivors of the crash of 3Q 2008 – were primarily responsible for what has become a foreclosure crisis of epic proportions.  While the Big Banks [my term] queued up to take billions of taxpayer-funded bailout money, distressed homeowners, awash in negative equity, were all but forgotten.[1]  It had become clear to us that the “Little Guy” [my term], was in dire need of help, legally and legislatively.  To that end, Kelly has worked tirelessly since starting her solo law practice.

Although, I had a head start in my blogging ventures, when in 2010, I impetuously leaped, like Hotspur, into the fray, I am pleased to see that Kelly has recently done so as well – albeit with more deliberateness – with “The Housekeeping Report – Oregon Mortgage and Foreclosure News.”  It is a welcome addition of useful, current, and reliable information for all who choose to visit.

For those who know Kelly, they know that she is smart…scary smart.  When, where, and how she has the time to devour the vast amount of knowledge and information she retains is something of a mystery.  Perhaps she is actually a twin, and together they masquerade as one. However she does it, it is accomplished with relish, and the results are immediately recognizable; she knows whereof she speaks.  So for folks who know Kelly, I am sure they are already enjoying her new website.  It is rich in valuable content, designed to inform her legal peers and help The Little Guy, at the same time.

And for those who do not know Kelly, I invite you to meet her vicariously, through the news and views she shares at The Housekeeping Report.  As I learned long ago at Davis Wright Tremaine, Kelly is what we called a “quick study.”  She grasps issues at warp-speed, synthesizes them into bite-size pieces, and adds a dose of hot sauce that is her [sometimes] wicked wit. Readers will not be disappointed.

Congratulations Kelly!  Welcome to the blogosphere!

[1] I acknowledge the government’s efforts through HAMP and HARP, but, in my opinion, they were doomed from the start, since bank participation was voluntary.  The remarkably poor statistical success of these programs bears this opinion out.  Clearly, the effort has improved over time, but one has to wonder whether it is now, too little too late.  [If “deservedness” for financial help was a criterion for distressed homeowners, who are required to submit “Hardship Letters” before receiving assistance, why were the Big Banks not required to do so, as well?  In fact, by all accounts, they received billions of bailout dollars whether they wanted it or not. – PCQ]

Following a rough and tumble year in the banking industry, Belial Bank’s feckless fearless leader, B.L. Zebub, believes it is high time to bring some levity and loyalty to the lowly troops who have been tirelessly foreclosing all the Beleaguered Borrowers they may have missed the first and second time around.  Mostly, however, B.L. is concerned about the reputational damage his bank has suffered this year.  Once known as the largest bank in America as measured by hubris, it is at risk of losing this mantle of distinction.  On the Chinese calendar, 2012 has been Belial Bank’s Year of the Rat.

B.L. is hoping against hope to instill a sense of pride among the rank and file; he knows that his company’s  promise to the feds to install a “single point of contact” [or “SPOC”] for every borrower seeking help, has become a sham.  Problem is, after a couple of weeks on the job, the SPOCs either quit, get fired, or leave to take more respectable jobs in the collection and repo industries. And then there was the public relations nightmare Belial Bank suffered after it was disclosed to the press that the top brass were giving prizes to supervisors who could run up the highest number of SPOCs for a single borrower in the shortest amount of time.  Last week’s big winner, Art O. DeLay, won a hundred crisp dollar bills and the afternoon off to visit The Devil’s Den Gentlemen’s Club, conveniently located just down the street from Belial’s headquarters.  [Cover charge waived.] Continue reading “Belial Bank’s 2012 Holiday Planning Meeting”

This is the second installment of my article looking back over the past five years at Portland housing statistics.  Part One examined the real reason for the housing crisis which officially commenced in 3Q 2007, and looked at the historic numbers for average and median (i.e. “mean”) sale prices according to the RMLS™. The link to Part One is here

 The Rest of the Story. Besides pricing over the past five years, what about time on the market?  Available inventory?  Number of listings? Closed sales? Let’s look at each one:

1.     Time on the MarketUntil 3Q 2007, an overheated real estate market was still burning through inventory.  In August 2007, the average time on the market was 56 days less than two months from listing to “pending sale.”[1]  The following month, September, 2007, banks began realizing that the drumbeat of subprime defaults was not going away.  They tightened their underwriting requirements almost immediately.  Over time, they began to even restrict borrowers from tapping their HELOCs based upon ZIP code.  As short sales and REOs began to fill the real estate marketplace, buyers and appraisers began viewing the sales figures as legitimate comps by which to gauge present value.  All the while, many potential buyers remained on the sidelines, waiting for prices to hit bottom.[2]  Many sellers who were fortunate enough to have equity during the following five years had to decide whether to wait until the market turned, or sell their home and recover far less equity than they had earlier.[3] Continue reading “Portland Metro Housing Prices – The Last Five Years [Part Two]”

Question [Hardship Letters].  I am trying to do a short sale.  The bank is asking me for a “hardship letter.”  What is it they are looking for?  Do I have to have some life changing event to qualify for help, such as divorce or some financial calamity?

Answer. I rarely, if ever, have seen a borrower’s “hardship” – or lack thereof – become an impediment to their securing a resolution of their distressed housing event through short sale or deed-in-lieu. I view the hardship letter as a sort of “price of admission” in order for the banks to “justify” their providing assistance.  Despite what they might say to the contrary, many banks simply won’t help borrowers unless they are in some form of payment default.  For those folks who may be making a respectable living, but are so strapped on a day-to-day basis because of a large mortgage payment, I believe this fact alone is a valid “hardship.”  If this financial pressure is coupled with a desire or need to downsize, relocate, or other legitimate reasons, it should be included in the hardship letter.  In most cases, folks who got their loans in 2005, 2006, or 2007, were in far stronger circumstance than they are today.  That should be addressed.  For example “When we first got our loan in 2005, we were both fully employed and our combined incomes could support the mortgage payments.  That is not the case today.” Continue reading “Distressed Housing FAQs”

Compliments of several dedicated consumer attorneys, including Kelly Harpster, consumer attorney par excellence, and Sybil Hebb,lead attorney for the Oregon Law Center, a non-profit law firm for low income Oregonians, I am posting a Frequently Asked Questions publication discussing the recent Niday court ruling [which I have discussed here and here] as well as general issues regarding the infamous MERS company and important Oregon foreclosure information.  Although it is not “legal advice,” this post contains information “You can take to the bank.”  And after you take it to the bank, you can tell them what to do with it…. PCQ

1)  What is MERS?

MERS stands for Mortgage Electronic Registry Systems, Inc. It is a private company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. MERS is owned by holding company MERSCORP, Inc. When MERS is named as a beneficiary in a trust deed, a related entity named MERSCORP records transfers

of the loan in a private database. Continue reading “FAQ on Niday Ruling & MERS/Non-Judicial Foreclosures in Oregon”

This is the second post of two, analyzing the recent Oregon Court of Appeals ruling on MERS.  The first post can be found here.  The Court’s written decision can be found here.

Issue Two

Can MERS act as a “Nominal Beneficiary” in the trust deed for purposes of avoiding the requirement under  ORS 86.735(1) that to conduct a non-judicial foreclosure in Oregon, any successive assignments of the trust deed must be recorded?

Besides the epic battle between Good and Evil, Right and Wrong, Light and Darkness, reduced to its simplest form, the disagreement between Big Banks and Bantam Borrowers is this:

  • Borrowers maintain that ORS 86.735(1) means what it says, i.e. that before a non-judicial foreclosure may be lawfully commenced, any time the trust deed has been assigned, the event must be recorded in the county records.  
  • Banks argue that since MERS is the “beneficiary” under the trust deed, the only assignment that is necessary to record is the one from MERS to the foreclosing bank.  They say that all of the intermediary assignment that may or may not[1] have been electronically “registered” should not have to be recorded, since MERS is the nominal beneficiary for everyone, now and in the future. [This results in what I have referred to as the “Hail Mary Pass” in prior posts on the subject, here and here: When a borrower goes into default, MERS, as the “nominal beneficiary” for the original lender [and all successive transferees of the lender’s promissory note], makes a “single assignment” pass over the heads of the intermediate transferees, and the trust deed lands neatly in the waiting arms of another Big Bank to commence the foreclosure in its own name.] Continue reading “MERS Smackdown! Niday Analyzed – Part Two”