Weeks ago, the state of California took a step in the right direction by passing a new measure for homeowners agreeing to short sales.  Under the new measure, homeowners would be granted tax relief if they chose to pursue short sales instead of allowing their properties to be foreclosed.  Throughout the state, thousands of homeowners are contending with foreclosure, making this new piece of legislation a great win.

The new bill, which will be signed by Governor Arnold Schwarzenegger, will “waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale,” reports the Los Angeles Times.  The Los Angeles Times says that the bill is expected to impact approximately 34,000 taxpayers in California.  Additionally, the new measure will allow $60 million in tax credits for companies in the green-energy industry.

While the Franchise Tax Board claims that new short sale tax break would generate $34 million less in revenue for the state of California, it is an important incentive that will greatly help homeowners who have been struggling with foreclosure and sky rocketing mortgages

According to state Senator Ron Calderon, “The mortgage-debt tax relief provision in this bill will provide financial shelter for tens of thousands of Californians who have lost their hopes and dreams in the housing market crash, and it’s about time we gave these folks a helping hand.”

At American Economic Solutions, we are absolutely thrilled about the passage of this new bill which will help those who homeowners who have been dealing with financial hardships for some time now.  With the economic times being so challenging, it is important that the government looks out for taxpayers who are losing their homes due to staggering unemployment rates and the greedy practices of mortgage lenders.  We hope that this tax incentive helps the many homeowners that need assistance so they can repair what damage has been done.

If want to learn more about this tax break, our short sale specialists are always more than willing to lend our insight.  Simply give us a call at 1-888-500-2632!

Read full story from the L.A. Times here: http://articles.latimes.com/2010/apr/09/local/la-me-tax-break9-2010apr09

No one expects to face foreclosure.  The truth is most homeowners in the United States only have to deal with foreclosure after losing their jobs, going through a divorce, suffering from an incapacitating illness or other such life events.  Unexpected events happen to everyone, even responsible homeowners.  However, once people fall behind on their mortgage payments, they will have to deal with the reality of losing their homes if they do not act quickly.

When homeowners receive notices of foreclosure from their banks or lenders after defaulting on their mortgages, they will have two main options:  allow the foreclosure to happen or pursue a short sale.  Before homeowners decide which option is most appropriate for their situation, they need to know the difference between short sales and foreclosure.

What is foreclosure?
Foreclosure occurs when a bank or mortgage lender decides to regain possession of a property after a homeowner has defaulted on his or her mortgage.  Once lenders move forward with foreclosure, homeowners must vacate their properties and surrender their homes.  The damage does not stop there as foreclosures will appear on homeowners’ credit reports and will lower their credit scores.

What is a short sale?
A short sale occurs when both homeowners and lenders agree to sell homes for less than what is owed on the homes.  The lenders accept the loss because it helps them avoid costs associated with foreclosure and homeowners avoid incurring damage to their credit reports.

Which is better?
At American Economic Solutions, we firmly believe that of all the options available, foreclosure is the worst for several reasons:

• You lose your home.
• Your lender may choose to file a judgment against you to collect your past obligations as well as costs related to the foreclosure.
• You will incur significant damage to your credit report for years to come.

With the cons far outweighing the pros, we advise you to steer free and clear of foreclosure and pursue short sales instead.  While you may think that short sales are extremely complicated, time consuming and strenuous, the truth is that when you work with our specialists, the process is very smooth and expedient.  Our short sale specialists will handle all of the applications, paperwork and work with your lender and make sure that things move along quickly.

Contact American Economic Solutions today to learn more about our effective short sale services!

If you are a California homeowner who entered into a short sale or completed the loan modification process in 2009, chances are that you were very relieved to hear that Governor Arnold Schwarzenegger signed SB401.   This new measure was created to offer homeowners tax relief on mortgage debt that was forgiven through:

• Foreclosures
• Short sales
• Loan modifications

Before SB401 came into existence, homeowners throughout the state were exempt from paying taxes on forgiven mortgage debt.  However, they were required to pay state taxes on the supposed income they acquired through short sales, loan modifications and foreclosures.  Many people started to coin this revenue “phantom income” and thought it was unfair that they had to pay additional state taxes, especially after losing their homes and properties.

With the new measure, homeowners who filed 2009 tax returns did not have to pay taxes on the amount generated from the difference between their home sale prices and mortgage balances.  In order to be eligible for tax forgiveness, homeowners had to be Qualified Primary Residents and could not exceed $800,000 in indebtness or exceed $500,000 in forgive debt.

SB401 is a great win for many people in the state, including those who have filed for consumer bankruptcy and those who have completed or are considering short sales.  With SB401, people who decide to partake in short sales, or the Home Affordable Foreclosure Alternatives Program (HAFA), can do so without incurring additional tax consequences.  Now that these individuals do not have to worry about incurring a hefty tax bill, they have the freedom to make financial decisions that will suit their best interests instead of worrying about tax penalties.

If you would like to learn more about SB401 and how it can make the short sale process easier for you, we encourage you to speak with our knowledgeable specialists by calling 1-888-500-2632.  We would be happy to discuss SB401 with you and can provide advice on both short sales and loan modifications, ultimately allowing you to pursue of a course of action that is most beneficial for you and your family.

When it comes to the topic of loan modification, there tends to be a lot of fiction and little fact circulating, which can make it difficult for homeowners to understand their options.  If you are thinking about loan modification, this blog will be of immense help and has been created by our team of experienced, accredited and knowledgeable loan modification specialists:

Fiction:  You must be behind your mortgage to apply for loan modification.
Fact:  This is absolutely false and a popular misconception. In order to get your home loan modified, you do not have to be late on your monthly mortgage payments.  You simply have to prove to your mortgage lender that you are in danger of defaulting on your mortgage to initiate the loan modification process.

Fiction:  You can’t modify your home loan if you have received notice of foreclosure.
Fact:  Many people wrongly assume that if their lenders have issued notice of foreclosure, it is too late to pursue loan modification.  Yet, the reality is, you can still negotiate more favorable loan terms with your lenders and modify your home loan even after receiving foreclosure notices.  If you are successful with your loan modification, you can stop foreclosure and save your home.

Fiction:  You can modify your home loan on your own.
Fact:  While it is true that you can try to modify your home loan on your own, the fact is that very few homeowners have been successful when trying to seek loan modifications alone.  Many report that they found the process confusing, strenuous and complicated and most say they never completed their loan modifications.  For this reason, homeowners should always seek help from loan modification specialists instead of trying to get through the process on their own, which can cost them time and money.

Fiction:  Attorneys are best equipped to handle loan modifications.
Fact:  Attorneys are not the best choice for homeowners pursuing loan modifications.  Instead, homeowners want to work with a reputable company that specializes in modifying home loans, like American Economic Solutions (AES).  Our company is approved by the Better Business Bureau (BBB) and, unlike lawyers who claim they are loan modification experts, we can actually prove we are experts as we have successfully modified hundreds of home loans nationally.

If you would like to learn more about the facts surrounding loan medication, we strongly encourage you to contact our knowledgeable specialists by calling 1-888-500-2632!

Recently, Bank of America launched a new program called the Principal Reduction Plan.  According to the plan, people who have home loans with Bank of America and Countrywide and are 60 days or more late on their monthly payments may qualify for “earned principal forgiveness”.  Loans that qualify are, “pay option ARMs, prime two-year hybrid mortgages and subprime loans initially offered by Countrywide. Fannie Mae and Freddie Mac loans will not be eligible”. (Wallet Pop)

Essentially, the purpose of the new plan is to reduce borrowers’ principal balances and to help homeowners avoid foreclosure.  Bank of America promised that it would eliminate, “$3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth,” reports the Los Angeles Times.  Many say that the plan came into existence due to increasing pressure from the government for banks to reduce the number of foreclosures and offer assistance to needy homeowners.

“Modifications are better than foreclosure,” said Bank of America executive, Jack Schakett, during a media conference. “The time has come to test this kind of program.”

The new program is expected to launch in May.  At this time, Bank of America says that it has 1.5 million borrowers who are 60 days or more behind on their mortgages.  The bank claims that it will reach out to qualified borrowers, but warns that not all borrowers who have defaulted on their loans will qualify.  Wallet Pop reports that only, “45,000 customers will ultimately qualify for this program.”

Prior to the introduction of the Principal Reduction Plan, banks have tried to combat foreclosures by offering loan modifications.  However, during loan modifications, banks would traditionally lower interest rates, increase loan terms or reduce late fees.  Until now, banks have always been resistant to reducing borrowers’ principal balances.  After realizing that homeowners are considering leaving their homes instead of paying high mortgage payments, banks are being more aggressive and presenting solutions.

The Los Angeles Times says that, “If successful, the plan could become a model for other lenders.”  Should this happen, the fragile real estate market may regain some stability and the number of foreclosures in the United States could decrease – a great win for homeowners throughout the country.  With Bank of America daring to take this huge step and put homeowners’ needs first, it is only a matter of time before other financial institutions feel pressured to follow in its lead.

Read Full Articles:
How Bank of America’s Principal Reduction Plan Will Work (Wallet Pop)

Bank of America to Reduce Mortgage Principal for Some Borrowers (Los Angeles Times)

The government has spent tons to bail out banks during the economic crisis, but according to middle class America, big banks are doing very little to help the average American.  Due to the increase in unemployment and a weak economy, more and more homeowners are finding it hard to make ends meet and pay their mortgages.  In fact, at this time, 6.5 million homeowners in the U.S. are behind on their mortgages.

Despite lofty promises banks made when the government bailout came into play, countless Americans say that they have been given little help and are now on the verge of losing their homes.  Of the 1.1 million Americans that have requested federal assistance, only 168,000 have been helped by banks, the very institutions that promised to give Americans the assistance they needed to recover from economic hardships.

A few days ago, ABC News published a story entitled Whistle-Blower: Banks Give Homeowners the Runaround.  To go along with the story, the news station casted a poll and the results were quite alarming.  According to the poll results, 60% of people feel that banks are not doing enough to help struggling Americans.

ABC News’ story revolves around an insider who works at a very large financial institution.  If you think he is a low man on the totem pole – you are wrong.  The insider reports that he has worked at one of the biggest banks in the U.S. for over 20 years and is a Vice President.  Deeply bothered by the bank’s response to struggling homeowners, the Vice President decided to come forward and discuss how the bank is giving the runaround to people who are in desperate need of assistance.

According to the informant, people who call the bank for assistance with loan modifications or with lowering their monthly mortgage payments are told to call an 800 number.  However, instead of answering homeowners’ questions and lending assistance, bank representatives simply give callers the runaround.

He also told ABC News that, “In our managers meeting, which can last eight or nine hours, we probably addressed mortgage modifications five minutes or less.”  When asked how many loan modifications his bank has completed in the last year, he responded, “Fully completed?  Zero.”

After getting the runaround, many homeowners come to the informant in tears and are deathly afraid.  Not to mention, these homeowners often have to deal with astounding late fees and penalties, as well as the fear of losing their homes.  Each year, it is estimated that banks receive $40 billion in penalties and late fees alone, which proves these institutions are more focused on capitalizing instead of giving much needed assistance.

If the government does not intercede and banks continue to hold all the power, the middle class will continue to face difficult times.  In fact, some question how the middle class will even survive.

If you are finding it difficult to get a loan modification, contact the friendly staff at American Economic Solutions.  We would be happy to work with you and to provide you with dependable help when you need it most!

Watch full story from ABC News: http://abcnews.go.com/WN/saving-middle-class-whistle-blower-banks-helping-americans/story?id=10178938

This week, Freddie Mac’s CEO, David M. Moffett, told news sources that he is expecting a “potential large wave of foreclosures.”  In a country that was plagued with 2.8 million foreclosures in 2009 (RealtyTrac), this recent news is more than disconcerting. 

Freddie Mac is one of the largest mortgage lenders in the United States.  According to Mr. Moffett, 4 percent of the company’s borrowers are at least three months behind on their loans and may be facing foreclosure in 2010.

Mortgage financier, Freddie Mac, is not the only source predicting that a wave of foreclosures will hit the country in 2010.  Recently, USA Today reported that, “A second wave of foreclosures is poised to hit the market, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices.”  Moody’s Corporation, a respected company that performs financial analysis and research on government and commercial entities, predicts that there will be at least 2.4 million foreclosures in the year 2010. 

With the expected surge in foreclosures, homeowners who are behind with their mortgage payments need to be prepared or else they could lose their homes, damage their credit and be confronted with tough economical challenges.

Our mortgage professionals know that in this economy, homeowners are at a disadvantage because they are without jobs and cannot afford to pay their home loans.  Each day, we receive calls from people who are on the verge of foreclosure and do not know what to do next.  Our team takes these calls very seriously and works tirelessly to come up with solutions to stop foreclosures. 

When clients are looking for an alternative to foreclosure, we introduce them to our no advance fee loan modification programs.  Our loan modification programs are unique in that we offer a 100% money back guarantee.  Anytime people are dealing with foreclosure, they have little to lose by working with American Economic Solutions.  We are committed to providing reliable services that produce results.

American Economic Solutions (AES) is fortunate to have a team that is comprised of experienced, knowledgeable and committed foreclosure prevention specialists.  One of our top agents is Ryan O’Keefe.   As one of our leading agents, Ryan works closely with our clients to make sure that they are able to remain in possession of their homes.  He knows that dealing with foreclosure or receiving a notice of foreclosure can be daunting for homeowners.  His primary aim is to provide AES clients with reliable solutions that will reduce their monthly expenses.  Ultimately, this can help them stop foreclosure and stay in their homes. 

Ryan O’Keefe works diligently to keep AES’ clients informed, engaged and moving toward feasible resolutions.  With his expert advice and guidance, clients are given the effective choices they need to stop foreclosure in minimal time.  He also focuses on establishing strong relationships with area mortgage lenders, which enables our company to negotiate better loan terms on behalf of our clients.  With Ryan’s help, many of our clients have been able to fight foreclosure and regain their financial stability.

Check Out Ryan’s Official Blog for an Expert’s Point of View
At American Economic Solutions, one of our main goals is to provide our clients with the information they need to remain informed on the topics of debt settlement, debt management and foreclosure prevention.   Ryan O’Keefe’s blog (www.amecsolutions.blogspot.com/) is a great resource that offers expert insight on these specific financial matters.  We hope that you will continue to visit Ryan’s blog as he continues to post updates regularly.

If you would like to speak with one of our debt and foreclosure specialists, do not hesitate to contact us American Economic Solutions today!

This article written by Justin McHood, entitled “Loan Modification: What to Expect if You are not Currently Late” addresses questions that the Foreclosure Prevention Consultants at American Economic Solutions encounter every day.

In the section entitled “When Loan Modifications Make More Sense than Refinancing”, McHood discusses the topic of when to refinance versus a loan modification. He makes a great argument for homeowners who owe more than their house is worth. He suggests that it makes more sense to work with the homeowner’s lender to get the home loan modified, which may leave the homeowner in a better financial situation.

Another question our Foreclosure Prevention Consultants are faced with every day is, “If the client is not late on the mortgage can American Economic Solutions help the homeowner?”

McHood addresses this obstacle in the next portion of his article in the section entitled, “Loan Modifications: What To Expect If You Are Not Currently Late.” The best recommendation our Foreclosure Prevention Consultants can give is to let the homeowner know that the loan modification varies from lender to lender. While the loan modification process varies by lender, it also varies by each individual borrower’s situation. This is why at American Economic Solutions, we feel it pays to have an authorized company represent the client. We know how to work with various lenders and maximize homeowner/borrower benefits, not the banks’ benefits.
To read the full article referenced above, please visit the following site:
http://www.zillow.com/blog/mortgage/2009/01/28/loan-modification-what-to-expect-if-you-are-not-currently-late/

In Emmett Pierce’s March 22nd article titled, “Loan-Modification business booming,” he states that attorney’s are attempting to reinterpret the law, which prohibits advanced fees for loan modification services in the state of California.

“Some for-profit loan modifiers are circumventing the law by affiliating with lawyers who can request retainer fees. The California Bar Association’s Committee on Professional Responsibility and Conduct recently issued an ethics alert, warning members that such conduct can result in discipline. ‘Over the past two months, the association has received more than 1,800 calls or complaints regarding loan-modification issues,’ spokeswoman Diane Curtis said.”

At American Economic Solutions, our position is this: a client in need of a loan modification should be wary of using an attorney to obtain the same results that a trusted loan modification company can provide. Not to mention, clients should make sure that there is no advanced fee paid for the modification services until the modification is complete.

At American Economic Solutions, our  California clients utilize a 3rd party client-trust account. In the client-trust account, the funds remain in the name of the client while providing AES with sufficient evidence that the client can pay for the service once the loan modification is finished.

In an August 4th article written by Ray Berona titled “No Advance Fee Loan Modification?” Berona writes,

” Why Not Use An Attorney?…
1) Attorneys charge upfront fees, usually with a minimum fee of $3000.00
2) Even if the Attorney is unsuccessful, they will keep the client’s money
3) Most Attorneys have no experience dealing with mortgage lenders
4) The main goal of an Attorney is not to modify a loan but to create a lawsuit against the lender. The majorities of these lawsuits have no grounds, and therefore are unsuccessful. Attorneys will keep the Clients money anyway.”

After reading these articles, American Economic Solutions personally called 3 law firms in San Diego inquiring about loan modification services. We found that all three were attempting to collect an advanced fee for loan modification services.

When we asked the firms about the passage of SB 94, all three gave their spin on what they were doing in regards to collecting advance fees. They stated it was legal.  We were ultimately hung up on by all three law offices after citing points of the SB 94 bill.

Most of these firms were simply attempting to break up portions of the services included in a loan modification and earn the service fee before the modification was completed. SB 94 clearly prohibits this practice. The bill specifically that a person cannot:

“Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.”

At the end of the day, the decision is up to the homeowner in need of a loan modification. Our goal at American Economic Solutions is to forewarn homeowners as of potential scams that exist in this relatively new industry. While every homeowner has the ability to represent themselves for no charge, American Economic Solutions believes that choosing to work with a reputable firm, like AES, will provide homeowners exceptional services and positive results.

To read the full articles mentioned above please visit the following sites:
http://www3.signonsandiego.com/stories/2009/mar/22/1n22modify00024-loan-modification-business-booming/
http://www.submityourarticle.com/articles/Rey-Berona-5872/no-advance-fee-loan-modification-61694.php