The Facts of HAMP and Home Loan Modification
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Tuesday, October 27, 2009
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Thursday, October 22, 2009
Monday, October 19, 2009
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Monday, October 5, 2009
Tuesday, September 22, 2009
Thursday, September 17, 2009
Wednesday, September 16, 2009
Tuesday, September 15, 2009
Friday, September 11, 2009
Thursday, September 3, 2009
President Obama’s Plan Needs Modification Itself
President Obama’s plan to stop foreclosure needs fixing. The reason: Homeowners who are delinquent with their mortgages are being turned away from HAMP (Home Affordable Modification Program) because their mortgages are technically affordable by its standards.
HAMP is a $75 billion home loan modification initiative. To make it easy for both lenders and borrowers to understand, eligibility is based on the ratio of a homeowners’ mortgage payment to their income. If the mortgage requires more than 31% of their paycheck, the loan is considered “unaffordable” and the borrower qualifies for the home loan modification, provided they meet the other conditions necessary. If it requires less than 31%, they don’t qualify. Many homeowners don’t qualify.
Loan providers criticize the formula, saying it is too narrow. That it fails to consider other debts that borrowers have incurred, such as auto loans and credit card bills. CitiMortgage and Ocwen, two of the largest lenders in the country both cite the formula as the leading cause of turning down borrowers from the home loan modification program.
It has been six months since HAMP began, and the government is only reporting slightly more than 200,000 homeowners enrolled; its goal is 4 million. The incentives are there for both borrowers AND lenders, yet the numbers are low.
The wave of foreclosures began with bad lending to unqualified buyers. Now with unemployment being 9.4% as of July, things are getting worse. Real Estate values have dropped from the 2006 peak by one third, making for one in three homeowners upside down (owing more than the house is worth) in their mortgage.
Simply put, the HAMP formula isn’t working and needs to be modified itself.
For more information visit Legal Loan Bailout
HAMP is a $75 billion home loan modification initiative. To make it easy for both lenders and borrowers to understand, eligibility is based on the ratio of a homeowners’ mortgage payment to their income. If the mortgage requires more than 31% of their paycheck, the loan is considered “unaffordable” and the borrower qualifies for the home loan modification, provided they meet the other conditions necessary. If it requires less than 31%, they don’t qualify. Many homeowners don’t qualify.
Loan providers criticize the formula, saying it is too narrow. That it fails to consider other debts that borrowers have incurred, such as auto loans and credit card bills. CitiMortgage and Ocwen, two of the largest lenders in the country both cite the formula as the leading cause of turning down borrowers from the home loan modification program.
It has been six months since HAMP began, and the government is only reporting slightly more than 200,000 homeowners enrolled; its goal is 4 million. The incentives are there for both borrowers AND lenders, yet the numbers are low.
The wave of foreclosures began with bad lending to unqualified buyers. Now with unemployment being 9.4% as of July, things are getting worse. Real Estate values have dropped from the 2006 peak by one third, making for one in three homeowners upside down (owing more than the house is worth) in their mortgage.
Simply put, the HAMP formula isn’t working and needs to be modified itself.
For more information visit Legal Loan Bailout
Faster Loan Modifications Needed
The White House recently released an announcement that they are displeased with the slow progress in the foreclosure crisis through lack of using home loan modifications. This news came out in the last week of June and wasn’t met with surprise considering all the negative press in regards to the economy as of late. President Obama is beginning to realize that many of his big reform bills are not working when it comes to repairing the economy and it’s time to more forcefully back the policies he enacted.
President Obama’s Foreclosure Prevention Program was endowed with $75 billion dollars, but so far not much progress has been made with it as mortgage companies and loan providers stall and try to avoid giving mortgage modifications.
People ARE trying to get home loan modifications. Many banks and loan providers are flooded with inquiries about qualifications for home loan modification, but little assistance is being provided to the homeowners. It can be hoped that as the economic situation grows worse and job losses continue to accelerate, President Obama and his administration will become more involved and start enacting tougher laws to force of these banks to comply.
Currently the global economy is in a state of disorder. Large corporations need to convert their bad debt into good equity; until then the global economy will continue to stagnate. This economic crisis will end, but it is going to take time and effort on both the part of the citizens and the lending institutions. Selfishness and greed on eithers part is only going to slow the recovery down, both sides made the problem, now both sides need to fix it.
For more information visit Legal Loan Bailout.
President Obama’s Foreclosure Prevention Program was endowed with $75 billion dollars, but so far not much progress has been made with it as mortgage companies and loan providers stall and try to avoid giving mortgage modifications.
People ARE trying to get home loan modifications. Many banks and loan providers are flooded with inquiries about qualifications for home loan modification, but little assistance is being provided to the homeowners. It can be hoped that as the economic situation grows worse and job losses continue to accelerate, President Obama and his administration will become more involved and start enacting tougher laws to force of these banks to comply.
Currently the global economy is in a state of disorder. Large corporations need to convert their bad debt into good equity; until then the global economy will continue to stagnate. This economic crisis will end, but it is going to take time and effort on both the part of the citizens and the lending institutions. Selfishness and greed on eithers part is only going to slow the recovery down, both sides made the problem, now both sides need to fix it.
For more information visit Legal Loan Bailout.
Monday, August 3, 2009
Short Selling Vs. Foreclosure
As a homeowner the day may come that you dread: You owe more on your mortgage that your house is worth. There are many reasons this could have happened. Property values may be dropping in your neighborhood. You may have made a bad decision when taking out your loan by borrowing more than you could afford. You may have refinanced to let the equity in your home work for you and gotten bit. Whatever reason, you’re now “upside down” in your home.
You’ve tried to solve the problem, with either Forbearance or a Payment Plan or applied for a loan modification and been rejected. Your options are disappearing. The important thing is that you take SOME action. Letting your bank foreclose is not going to look good in your future.
Short Selling is an option you can look into. Put simply, it’s cutting your losses. You sell the house for less than its worth, then use that money to pay off the bank. The bank doesn’t get back all the money it’s owed but it spares itself the burden of going through a foreclosure and having to resell the house. Banks won’t always accept this solution but you won’t know until you ask.
The other option is Foreclosure. Except it really isn’t your option, it’s the banks. They decide they have had enough of your late payments or no payments and decide to evict you and sell the house.
There may not seem to be a lot of difference between the two, but on your future credit report there is. A short sale shows future lenders that you took responsibility for your financial situation and tried to do something about it.
If you haven’t bought your home yet and you want to avoid the things discussed above, then listen up. Pre-qualify for a loan so you know from the start what you can afford to spend. If you go ahead and find your house ahead of time and then try to get a loan, you may find a way to get a larger loan, and that is not doing yourself a favor at all. You will not pay off a loan you cannot afford; it’s as simple as that.
Sign for the smallest loan you can get to cover the house (no, you don’t want extra for fixing things up) and pay it off as quickly as possible. Make as large as a down payment as possible and if you can make extra payments, or larger payments than necessary. The sooner this mortgage is paid off the better.
For more information visit Legal Loan Bailout.
You’ve tried to solve the problem, with either Forbearance or a Payment Plan or applied for a loan modification and been rejected. Your options are disappearing. The important thing is that you take SOME action. Letting your bank foreclose is not going to look good in your future.
Short Selling is an option you can look into. Put simply, it’s cutting your losses. You sell the house for less than its worth, then use that money to pay off the bank. The bank doesn’t get back all the money it’s owed but it spares itself the burden of going through a foreclosure and having to resell the house. Banks won’t always accept this solution but you won’t know until you ask.
The other option is Foreclosure. Except it really isn’t your option, it’s the banks. They decide they have had enough of your late payments or no payments and decide to evict you and sell the house.
There may not seem to be a lot of difference between the two, but on your future credit report there is. A short sale shows future lenders that you took responsibility for your financial situation and tried to do something about it.
If you haven’t bought your home yet and you want to avoid the things discussed above, then listen up. Pre-qualify for a loan so you know from the start what you can afford to spend. If you go ahead and find your house ahead of time and then try to get a loan, you may find a way to get a larger loan, and that is not doing yourself a favor at all. You will not pay off a loan you cannot afford; it’s as simple as that.
Sign for the smallest loan you can get to cover the house (no, you don’t want extra for fixing things up) and pay it off as quickly as possible. Make as large as a down payment as possible and if you can make extra payments, or larger payments than necessary. The sooner this mortgage is paid off the better.
For more information visit Legal Loan Bailout.
Wednesday, July 29, 2009
The 4 Stages of Foreclosure.
What happens in a Foreclosure?
There are four steps throughout the process of foreclosure which are the notice of default, the acceleration, the notice of sale, and the auction.
Depending on the bank, the foreclosure process can start right after your first missed payment. The bank will most likely take into account how long you have had your mortgage and what your payment history is. Usually the process will take 6 to 9 months, depending on the amount of foreclosures your bank is dealing with plus how many are happening in your area.
Notice of Default- This is the best time to stop the foreclosure. Contact your bank and let them know you want to avoid foreclosure. They may be able to grant forbearance, which is where they let you go a set amount of time without payments. This is also where you would consider loan modification. Depending on the bank, they may wait until you are three months behind on payments before sending out a notice of default and starting the foreclosure process.
Notice of Acceleration- In the next step, the bank will send out a notice of acceleration. The notice of acceleration will usually arrive a few weeks to a month after you received the notice of default. The time between the notice of default and the notice of acceleration is given to the borrower so you can contact the bank and work with them to avoid foreclosure. Upon receiving the notice of acceleration, you may still have a chance to save your home but you will need to have all of the payments and fees to deliver to the bank. Even if you do this, the bank will most likely want to review your financial situation.
Notice of sale is, quite simply, the date the bank intends to sell your house at public auction at the county courthouse. There is only one method of selling foreclosed homes, on the steps in front of the county courthouse. The notice of sale will have the date and time of the auction. At this point the only way to stop the foreclosure is to file bankruptcy to postpone it, or find a person to buy your house for you.
Auction- Once your house goes up for auction, the only way you are keeping it is if you can find someone to buy it for you, or buy it yourself.
SO…The lesson learned here is that should you unfortunately fall behind on your mortgage payments, you can still keep your home, if you act with decisiveness.
For more information, please visit Legal Loan Bailout
There are four steps throughout the process of foreclosure which are the notice of default, the acceleration, the notice of sale, and the auction.
Depending on the bank, the foreclosure process can start right after your first missed payment. The bank will most likely take into account how long you have had your mortgage and what your payment history is. Usually the process will take 6 to 9 months, depending on the amount of foreclosures your bank is dealing with plus how many are happening in your area.
Notice of Default- This is the best time to stop the foreclosure. Contact your bank and let them know you want to avoid foreclosure. They may be able to grant forbearance, which is where they let you go a set amount of time without payments. This is also where you would consider loan modification. Depending on the bank, they may wait until you are three months behind on payments before sending out a notice of default and starting the foreclosure process.
Notice of Acceleration- In the next step, the bank will send out a notice of acceleration. The notice of acceleration will usually arrive a few weeks to a month after you received the notice of default. The time between the notice of default and the notice of acceleration is given to the borrower so you can contact the bank and work with them to avoid foreclosure. Upon receiving the notice of acceleration, you may still have a chance to save your home but you will need to have all of the payments and fees to deliver to the bank. Even if you do this, the bank will most likely want to review your financial situation.
Notice of sale is, quite simply, the date the bank intends to sell your house at public auction at the county courthouse. There is only one method of selling foreclosed homes, on the steps in front of the county courthouse. The notice of sale will have the date and time of the auction. At this point the only way to stop the foreclosure is to file bankruptcy to postpone it, or find a person to buy your house for you.
Auction- Once your house goes up for auction, the only way you are keeping it is if you can find someone to buy it for you, or buy it yourself.
SO…The lesson learned here is that should you unfortunately fall behind on your mortgage payments, you can still keep your home, if you act with decisiveness.
For more information, please visit Legal Loan Bailout
The 1st Steps in Avoiding Foreclosure
Foreclosure is scary. The word brings to mind the loss of everything you’ve worked so hard to achieve. But foreclosure CAN be prevented. There are several options open to you that can work to help you keep your home. They may include forbearance, loan modification, mortgage refinancing, and deed in lieu of foreclosure.
There are a few things you need to think about up front. First is that the longer you wait to contact your bank, the worse the situation is going to be. If you are even one payment behind, contact them. Now. If they are trying to contact you, DO NOT IGNORE THEM. It is amazing the numbers of people who ignore their bank’s attempts to contact them and work something out. Pretending it isn’t happening doesn’t work.
Be ready to provide all pertinent financial information, and tell them that you would like to work out an arrangement until you can continue making payments. Also, keep records of any contact you have with your lender: date, time, person spoken with. Just be honest. Don’t promise or agree to something if you know you can’t do it.
If you and the bank are unable to work out an arrangement, there are people who can help you modify your loan. These are people who are specialists in negotiating with banks and are well informed about the mortgage industry. Everyone has a different situation, so contacting them will get you more information as to what they can do for you. Most have web sites with Loan Modification Free Consultation forms you can simply fill out and get a response within hours.
For more information please visit Legal Loan Bailout.
There are a few things you need to think about up front. First is that the longer you wait to contact your bank, the worse the situation is going to be. If you are even one payment behind, contact them. Now. If they are trying to contact you, DO NOT IGNORE THEM. It is amazing the numbers of people who ignore their bank’s attempts to contact them and work something out. Pretending it isn’t happening doesn’t work.
Be ready to provide all pertinent financial information, and tell them that you would like to work out an arrangement until you can continue making payments. Also, keep records of any contact you have with your lender: date, time, person spoken with. Just be honest. Don’t promise or agree to something if you know you can’t do it.
If you and the bank are unable to work out an arrangement, there are people who can help you modify your loan. These are people who are specialists in negotiating with banks and are well informed about the mortgage industry. Everyone has a different situation, so contacting them will get you more information as to what they can do for you. Most have web sites with Loan Modification Free Consultation forms you can simply fill out and get a response within hours.
For more information please visit Legal Loan Bailout.
Why Foreclosure Should Be Your Last Resort
A rising number of homeowners are defaulting on their mortgages and facing foreclosure or loss mitigation as the economy continues to decline. Homeowners who are unable to make their monthly mortgage payment for whatever reason have options that will allow them to stay in their homes. Even though many situations like these end in foreclosure and a ruined credit score, it doesn’t necessarily have to turn out that way.
Mortgage Modification, also call Loan Modification can help homeowners stay in their home and continue to make their monthly payments. A loan modification is a change in the terms of the loan which will allow it to be reinstated with lower payments and possibly lower interest so that the borrower can afford to keep their home. If you find yourself in a situation where you can no longer afford your mortgage, it may seem like there is no hope to saving your home, but MOST people do qualify for a loan modification.
A mortgage modification, which is a lot like a refinance loan, is when homeowners refinance their current mortgage to get a better interest rate to lower their monthly payment. No matter what the reasons might be, if you are about to default on your home loan it is important to consider loan modification to save your home.
Loan modification is not the same as debt consolidation or refinancing a mortgage before you begin to fall behind. A mortgage modification is a long term solution sought after a homeowner is no longer able to make their monthly mortgage payments. Rising interest rates, job loss, or other events preventing a homeowner from making their payments on time is when a loan modification is used to keep them in their home.
Loan modification may change the loan’s term length, interest rate, and/or other factors to keep mortgage payment affordable for the borrower. There may also be expenses and fees can be included in a new loan modification and paid off in affordable monthly payments. Besides being allowed to stay in their home, a loan modification also saves the homeowner’s credit from the negative affects of a foreclosure.
If you are looking for loss mitigation or a loan modification in California, or anywhere else to save your home there are many resources for you to choose from. With the solutions of loan modification and loss mitigation available, as well as other routes, foreclosure should always be the last resort.
For more information, please visit Legal Loan Bailout.
Mortgage Modification, also call Loan Modification can help homeowners stay in their home and continue to make their monthly payments. A loan modification is a change in the terms of the loan which will allow it to be reinstated with lower payments and possibly lower interest so that the borrower can afford to keep their home. If you find yourself in a situation where you can no longer afford your mortgage, it may seem like there is no hope to saving your home, but MOST people do qualify for a loan modification.
A mortgage modification, which is a lot like a refinance loan, is when homeowners refinance their current mortgage to get a better interest rate to lower their monthly payment. No matter what the reasons might be, if you are about to default on your home loan it is important to consider loan modification to save your home.
Loan modification is not the same as debt consolidation or refinancing a mortgage before you begin to fall behind. A mortgage modification is a long term solution sought after a homeowner is no longer able to make their monthly mortgage payments. Rising interest rates, job loss, or other events preventing a homeowner from making their payments on time is when a loan modification is used to keep them in their home.
Loan modification may change the loan’s term length, interest rate, and/or other factors to keep mortgage payment affordable for the borrower. There may also be expenses and fees can be included in a new loan modification and paid off in affordable monthly payments. Besides being allowed to stay in their home, a loan modification also saves the homeowner’s credit from the negative affects of a foreclosure.
If you are looking for loss mitigation or a loan modification in California, or anywhere else to save your home there are many resources for you to choose from. With the solutions of loan modification and loss mitigation available, as well as other routes, foreclosure should always be the last resort.
For more information, please visit Legal Loan Bailout.
Thursday, July 9, 2009
Saturday, July 4, 2009
Obama's Loan Modification Plan Simplified
As part of his 2009 economic recovery package, President Barack Obama has introduced a plan to rescue and revive the troubled housing market. Called the Homeowner Affordability and Stability Plan (HASP), the plan argues that modifying and restructuring existing distressed mortgages will keep struggling borrowers in their homes and stop the downward spiral of property values by keeping homes from entering foreclosure. There is $75 billion dedicated to this plan, and below are the key details about this plan:
First off, HASP focuses on "mortgage payments" rather than "property values" since it argues that homeowners will continue to stay in their homes, even as values decline, as long as they can make their monthly payments. Many economists agree that foreclosures happen mostly because borrowers can’t pay the monthly payment that they agreed to pay. To that end, Obama's plan requires the participating loan servicers to reduce monthly mortgage payments to less than 38% of the borrower's gross monthly income. The government would then pick up the rest of the tab. The loan servicer can use several methods to achieve lowering of the payment such as: reduce the interest rate to as low as 2%, extend the terms of the loan (possibly up to 40 years), forebear loan principal at no interest. In an attempt to create incentives participation, loan servicers will be paid $1,000 for each modification and will get an additional $1,000/year for up to 3 years, as long as the mortgage payments are paid on time . Borrowers can also get up to $1,000 off the principal balance for up to 5 years if they make their payments on time.
Because HASP is designed for responsible homeowners who just happen to have been plagued by the slump in the housing market, only owner-occupied, primary residences with mortgage balances of up to $729,750 are eligible. The plan also helps those homeowners who have been hit by a "financial hardship" such as a loss of income or a mortgage rate increase which have put them at risk of default. To qualify, each borrower must sign an affidavit of financial hardship and verify their income with documents. Although second liens such as home equity loans or HELOCs are also being addressed by the plan by providing further incentives, key details on this component of the plan are still somewhat unclear.
At the end of the day, it is all about the economic interest of the investor. Servicers typically run the Net Present Value test to determine whether there will be more cash flow to the investor if the loan is modified or not. In this case, government is helping to pick up the slack where there is shortfall of cash.
Loan modification agreements come in different forms but quite frequently they involve the reduction of mortgage's interest rate for a specified period of time so the homeowner can continue to make payments and stay in the home. Loans can also be modified so they have a longer amortization term (e.g. 40 year instead of 30 year) which will cause the payments to decrease. Principal writedowns are rare, but they do indeed happen where the bank actually writes down some of the principal amount.
Source: "http://loan-modification411.com/"
First off, HASP focuses on "mortgage payments" rather than "property values" since it argues that homeowners will continue to stay in their homes, even as values decline, as long as they can make their monthly payments. Many economists agree that foreclosures happen mostly because borrowers can’t pay the monthly payment that they agreed to pay. To that end, Obama's plan requires the participating loan servicers to reduce monthly mortgage payments to less than 38% of the borrower's gross monthly income. The government would then pick up the rest of the tab. The loan servicer can use several methods to achieve lowering of the payment such as: reduce the interest rate to as low as 2%, extend the terms of the loan (possibly up to 40 years), forebear loan principal at no interest. In an attempt to create incentives participation, loan servicers will be paid $1,000 for each modification and will get an additional $1,000/year for up to 3 years, as long as the mortgage payments are paid on time . Borrowers can also get up to $1,000 off the principal balance for up to 5 years if they make their payments on time.
Because HASP is designed for responsible homeowners who just happen to have been plagued by the slump in the housing market, only owner-occupied, primary residences with mortgage balances of up to $729,750 are eligible. The plan also helps those homeowners who have been hit by a "financial hardship" such as a loss of income or a mortgage rate increase which have put them at risk of default. To qualify, each borrower must sign an affidavit of financial hardship and verify their income with documents. Although second liens such as home equity loans or HELOCs are also being addressed by the plan by providing further incentives, key details on this component of the plan are still somewhat unclear.
At the end of the day, it is all about the economic interest of the investor. Servicers typically run the Net Present Value test to determine whether there will be more cash flow to the investor if the loan is modified or not. In this case, government is helping to pick up the slack where there is shortfall of cash.
Loan modification agreements come in different forms but quite frequently they involve the reduction of mortgage's interest rate for a specified period of time so the homeowner can continue to make payments and stay in the home. Loans can also be modified so they have a longer amortization term (e.g. 40 year instead of 30 year) which will cause the payments to decrease. Principal writedowns are rare, but they do indeed happen where the bank actually writes down some of the principal amount.
Source: "http://loan-modification411.com/"
What is loan modification?
A Loan Modification is a permanent change in one or more of the terms of your loan, gives you a fresh start, and results in a payment that you can afford. The sole purpose of a loan modification is to enable the borrower to meet the terms of the new loan for the foreseeable future. Legal Loan Bailout's in-house legal team will analyze your current situation and provide a workable plan that is acceptable to both you and your lender.
In simplest terms, a loan modification restructures the terms of a loan without actually refinancing the property it secures. A loan modification can be defined as an agreement between the lender and the borrower which stipulates a long term relief from unaffordable loan terms. Modification of a loan applies to the terms governing the interest rate, the amount of the monthly payment, and in some cases also the loan amount. At Legal Loan Bailout our expert home loan legal specialists work on behalf of borrowers with their lenders to achieve the relief of a home loan modification.
In simplest terms, a loan modification restructures the terms of a loan without actually refinancing the property it secures. A loan modification can be defined as an agreement between the lender and the borrower which stipulates a long term relief from unaffordable loan terms. Modification of a loan applies to the terms governing the interest rate, the amount of the monthly payment, and in some cases also the loan amount. At Legal Loan Bailout our expert home loan legal specialists work on behalf of borrowers with their lenders to achieve the relief of a home loan modification.
Thursday, July 2, 2009
Loan Modification Help
A Loan Modification is a permanent change in one or more of the terms of your loan, gives you a fresh start, and results in a payment that you can afford. The sole purpose of a loan modification is to enable the borrower to meet the terms of the new loan for the foreseeable future. Legal Loan Bailout's in-house legal team will analyze your current situation and provide a workable plan that is acceptable to both you and your lender.
In simplest terms, a loan modification restructures the terms of a loan without actually refinancing the property it secures. A loan modification can be defined as an agreement between the lender and the borrower which stipulates a long term relief from unaffordable loan terms. Modification of a loan applies to the terms governing the interest rate, the amount of the monthly payment, and in some cases also the loan amount. At Legal Loan Bailout our expert home loan legal specialists work on behalf of borrowers with their lenders to achieve the relief of a home loan modification via drastically reduced mortgage payments.
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