Thursday, July 9, 2009

Do You Have Inquiries About Foreclosure Modifications?

A attorney mortgage modification is a permanent change in one or more of the terms of a homeowner's note that allows the note to be modified with new terms, and results in a payment the homeowner can afford. It is not a refinance and does not require a certain credit score as they are not taken into consideration.

In utilizing the attorney mortgage modification option to bring an loan current, can the bank include all fees?

Legal fees may be capitalized into the modified mortgage balance.

May a servicer perform an appraisal of the property if they have concerns about property condition?

Yes, the mortgage company may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the lender's continued ability to support the modified loan payment.

Can a mortgage company include late charges in the Foreclosure Re-workings?

Accrued late charges should be waived by the lender at the time of the Loan Workouts and for the most part are. There are rare occasions that the lender would add them onto the principal balance.

When utilizing a Loan Re-workings option, can a FHA lender capitalize an escrow advance for Homeowner's Association fees?

servicer must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage. It actually does not matter whether it is FHA or Conventional when modifying a loan as all Mortgage Workouts require an escrow account no matter what the situation.

Is there a new basis interest rate which loan holder may assess when completing a Loan Modifications?

The new FHA basis interest rate is 200 points above the monthly average yield on U.S. Treasury Securities, adjusted to a constant maturity of 10 years.

Are bank required to perform an escrow analysis when completing a Loan Re-workings?

Yes, bank are to perform a retroactive escrow analysis at the time of the Mortgage Re-workings to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

Can a bank qualify an asset for the Loan Modification option when the homeowner is unemployed, the spouse is employed, but the spouse name is not on the mortgage?

Based upon this scenario, the mortgage company should conduct a financial review of all household income and expenses to determine if surplus income is sufficient to meet the new Loan Re-workings payment, but insufficient to pay back the arrearage. As long as there is surplus based on the banks requirements there is no problem to modify the loan. It does not matter who is or is not on the mortgage, it is all based on who lives in the house.