President Obama’s administration’s $75 billion stop foreclosure plan to refinance and modify millions of homes, announced back in March, is a portion of the much larger Tarp II plan. If you are a homeowner in trouble of losing your home to foreclosure, or a homeowner that has not missed a payment, but would like to refinance to a lower interest rate, you have hopefully already started calling your servicer and asking for a mortgage modification or have contacted an Attorney based mortgage modification firm to handle the situation for you with the bank. The money used for this program comes from the $700 billion approved as part of Tarp I in late 2008.
The $75 billion dollar project deemed obama loan modification, pledges to make homeownership more affordable for as many as 9 million Americans. The program uses a combination of government subsidies and incentives (for servicer, lenders and borrowers) in an effort to reduce principal and lower interest rates on millions of American loans. Direct information on the details of the new plan can be found by going to www.Makingshomesaffordable.gov
The Home Affordable Refinance modification portion of the program helps homeowners that have lost value in their home, but are still current on their mortgage payments. It gives borrowers with conforming [/spin]mortgages|loans|notes|mortgage notes|home loans[/spin] backed by Freddie Mac and Fannie Mae the ability to refinance their homes with little or no equity. Those that could not refinance their mortgage into a lower interest rate loan, because they lacked the necessary equity, may now be able to receive a loan for up to 105% of their home’s market value.
The Homes Affordable modification portion of this program provides incentives to lenders in exchange for modifying home loans into payments that match 31% of the borrower’s monthly gross income. It is designed to curb millions of foreclosures for families that are struggling to meet financial commitments and on the verge of foreclosure. Hopefully this will be a long term solution to the landslide of foreclosures and not just a temporary ‘stay’, resulting in yet another financial/real estate upheaval later on down the line. Stabilizing home owners financially is looked upon as one of the major ‘trunks’ to getting the country – and its citizens -, economically stable yet again.
It’s not clear what every bank is doing to modify mortgages. JP Morgan Chase has publicly stated that they are not modifying the principal of any mortgages; instead, they are lowering interest rates for a period of 5-years. After the 5-year period, the interest rates will increase to current levels. Chase estimated that they alone would loan mod the interest rates on over 600,000 mortgages and that the number may end up closer to 1 million. The hope is that those 600,000 homeowners will not be in the same situation again in 5 years. Loan modifications are hopefully setting our economy up for long-term stability and not simply another round of ARMs.
Wednesday, July 15, 2009
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.
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.
Monday, July 6, 2009
A Big Foreclosure Moratorium To Increase Loan Workouts
The california attorney loan modification Prevention Act, signed by Gov. Schwarzenegger, adds 90 days onto the time period between when homeowners defaulting on a note and when their home can be repossessed in foreclosure. Banks can avoid the 90-day holdup by having a comprehensive program in place to make mortgage more affordable by reducing the interest rate. Such programs must be approved by regulators.
The goal is to compel Banks to do systematic loan modification across California to reduce the foreclosure rate. California’s save my home rate is said to be the highest in the nation. Of course we have all read the stories of even seemingly rich celebrities losing their multi-million dollar mansions to foreclosure in recent months. The slowing down and stopping of foreclosures is seen in large part as the path back to economical stability in many states.
In the past few months, 15 lenders have agreed to implement the Obama plan, according to the Web site MakingHomeAffordable.gov. Government spokespersons have said that about 100,000 homeowners nationwide have been sent offers for trial modifications, a relatively modest number compared with the administration's goal of helping 3 million to 4 million homeowners to avoid foreclosure.
In California, the Department of Corporations will determine whether banks qualify for an exemption from the moratorium. About a dozen mortgage companies had applied as of last week, said department spokesperson Mark Leyes; they will now have a 30-day grace period while their applications are reviewed. A list of the participating banks will be posted on www.corp.ca.gov.
The department will monitor the Banks success rate regularly, to make sure that they have a program in place. Still, there is no guarantee in the law that anyone is going to get a loan workout. The hope is that http://www.callalms.com/loan-modification-news-blog/viewpost/95 will make a good-faith effort to make loans affordable and sustainable for homeowners. It is also the hope that homeowners in turn will be able to keep up with their new mortgage payments without undue financial strain. This in turn, will result in homeowners again feeling comfortable to start spending their money and pouring it back into the economy.
The California law, like the Obama plan, says that can determine whether a foreclosure or a loan workout is more cost-effective and can pick the cheaper option.
You can visit http://www.callalms.com to learn more about the laws and get free tips on how to succeed at your loan modification. If you want to get an immediate responce from an attorney backed loan modification firm based out of california please feel free to use the quick application that can be found at http://www.callalms.com/secure-online-application where you can do a secure online inquiry that will be followed up on within one hour by a professional.
The goal is to compel Banks to do systematic loan modification across California to reduce the foreclosure rate. California’s save my home rate is said to be the highest in the nation. Of course we have all read the stories of even seemingly rich celebrities losing their multi-million dollar mansions to foreclosure in recent months. The slowing down and stopping of foreclosures is seen in large part as the path back to economical stability in many states.
In the past few months, 15 lenders have agreed to implement the Obama plan, according to the Web site MakingHomeAffordable.gov. Government spokespersons have said that about 100,000 homeowners nationwide have been sent offers for trial modifications, a relatively modest number compared with the administration's goal of helping 3 million to 4 million homeowners to avoid foreclosure.
In California, the Department of Corporations will determine whether banks qualify for an exemption from the moratorium. About a dozen mortgage companies had applied as of last week, said department spokesperson Mark Leyes; they will now have a 30-day grace period while their applications are reviewed. A list of the participating banks will be posted on www.corp.ca.gov.
The department will monitor the Banks success rate regularly, to make sure that they have a program in place. Still, there is no guarantee in the law that anyone is going to get a loan workout. The hope is that http://www.callalms.com/loan-modification-news-blog/viewpost/95 will make a good-faith effort to make loans affordable and sustainable for homeowners. It is also the hope that homeowners in turn will be able to keep up with their new mortgage payments without undue financial strain. This in turn, will result in homeowners again feeling comfortable to start spending their money and pouring it back into the economy.
The California law, like the Obama plan, says that can determine whether a foreclosure or a loan workout is more cost-effective and can pick the cheaper option.
You can visit http://www.callalms.com to learn more about the laws and get free tips on how to succeed at your loan modification. If you want to get an immediate responce from an attorney backed loan modification firm based out of california please feel free to use the quick application that can be found at http://www.callalms.com/secure-online-application where you can do a secure online inquiry that will be followed up on within one hour by a professional.
Sunday, June 28, 2009
The Issues In The World Of Loan Modifications Include Needless Foreclosures!!!
Needless foreclosures are happening all around us. It happens every day; mortgage companies are foreclosing on properties even though it costs more to foreclose then to provide a loan workout. In this case, common sense tells any sane person that it is a needless foreclosure. So, be aware that the mortgage servicers these days just don’t have common sense!
For example, it can cost the Investors who held the mortgage about $50,000 to foreclose on a home. It may have cost only $25,000 to make the mortgage affordable to the homeowner by reducing the interest rate. Modifying the loan note would keep the homeowner in their home and save the investor money.
stop needless foreclosure
Mortgage contracts are often modified, at some cost to the banks, to prevent the larger cost of a foreclosure. Loan modifications can include adding the unpaid interest to the loan balance, calculating a new payment to make the payment more affordable, lengthening the term of the loan, or reducing the interest rate. In cases where the property is worth less than the loan balance, the balance may be reduced.
There can be some major impediments to loan modification. Borrower denial is a big one. Developing a new loan contract that a distressed homeowner can live with requires full participation of the homeowner. But many homeowners in trouble don't contact their mortgage companies and may not respond when contacted. It is recommended to take the burden off your shoulder and contact an Attorney based firm to handle your loan modification attorney as all the work is then handled by them and not you.
Some loans are owned by Investors, not the banks. Third-party lenders in which the firm servicing the loan does not own it is quite common. Investors restrict servicers from modifying loan contracts because their interests are different. Investors want modifications only if the alternative is a more costly liquidation or foreclosure. lenders, in contrast, want to protect their servicing fees, which they receive only from loans in good standing. Homeowners just want to be able to afford the monthly payment of their dwellings.
Most lenders unfortunately suffer from, and cause homeowners to suffer through, a lack of proper staffing. Many interactions between homeowners and lenders are handled by relatively unskilled employees. Homeowners in serious trouble are referred to a smaller number of more skilled and specialized staff that are armed with stronger abilities in the attorney loan modification area. With the onset of the mortgage crisis, lenders were caught short of a critical resource. While they now claim to have expanded their staffs to handle the workflow, a financial disincentive to staff adequately remains.
Many of the homeowners in trouble have two mortgages with different lenders, which complicate matters. The lenders looking to modify the first mortgage has to make sure the borrower can afford both mortgages and that the second mortgage lender does not upset the apple cart by foreclosing. As it currently stands it seems some lenders are prepared to work with second-mortgage lenders, and some are not.
Situations like these make it harder on both parties to cut a swath through the path to attorney mortgage modification.
For example, it can cost the Investors who held the mortgage about $50,000 to foreclose on a home. It may have cost only $25,000 to make the mortgage affordable to the homeowner by reducing the interest rate. Modifying the loan note would keep the homeowner in their home and save the investor money.
stop needless foreclosure
Mortgage contracts are often modified, at some cost to the banks, to prevent the larger cost of a foreclosure. Loan modifications can include adding the unpaid interest to the loan balance, calculating a new payment to make the payment more affordable, lengthening the term of the loan, or reducing the interest rate. In cases where the property is worth less than the loan balance, the balance may be reduced.
There can be some major impediments to loan modification. Borrower denial is a big one. Developing a new loan contract that a distressed homeowner can live with requires full participation of the homeowner. But many homeowners in trouble don't contact their mortgage companies and may not respond when contacted. It is recommended to take the burden off your shoulder and contact an Attorney based firm to handle your loan modification attorney as all the work is then handled by them and not you.
Some loans are owned by Investors, not the banks. Third-party lenders in which the firm servicing the loan does not own it is quite common. Investors restrict servicers from modifying loan contracts because their interests are different. Investors want modifications only if the alternative is a more costly liquidation or foreclosure. lenders, in contrast, want to protect their servicing fees, which they receive only from loans in good standing. Homeowners just want to be able to afford the monthly payment of their dwellings.
Most lenders unfortunately suffer from, and cause homeowners to suffer through, a lack of proper staffing. Many interactions between homeowners and lenders are handled by relatively unskilled employees. Homeowners in serious trouble are referred to a smaller number of more skilled and specialized staff that are armed with stronger abilities in the attorney loan modification area. With the onset of the mortgage crisis, lenders were caught short of a critical resource. While they now claim to have expanded their staffs to handle the workflow, a financial disincentive to staff adequately remains.
Many of the homeowners in trouble have two mortgages with different lenders, which complicate matters. The lenders looking to modify the first mortgage has to make sure the borrower can afford both mortgages and that the second mortgage lender does not upset the apple cart by foreclosing. As it currently stands it seems some lenders are prepared to work with second-mortgage lenders, and some are not.
Situations like these make it harder on both parties to cut a swath through the path to attorney mortgage modification.
Wednesday, June 24, 2009
New Jersey FHA Mortgages Being Made In Full Effect
Prospect Park, PA- June 23, 2009 – Tightening credit guidelines make pennsylvania fha loan mortgage the best option for many borrowers looking to purchase a new home or refinance their existing home.
new jersey FHA loans have not been utilized by many new jersey mortgage company for years. However, with the changing credit markets
pa FHA loans are back in full force.
new jersey FHA loans allow greater flexibility over the more traditional loan programs that fall under Fannie Mae or Freddie Mac guidelines. Here are just some of the advantages of
pa FHA mortgage:
1)
nj FHA mortgage require as little as 3.5% down and allow a seller assist up to 6%
2)
pennsylvania FHA mortgage are typically not as credit score driven. Borrowers can have lower scores and still get a great rate.
3)
pennsylvania FHA mortgage allow for non-occupying co-borrowers i.e. (mom/dad)
4)
pa FHA mortgage has increased loan limits up to $729,000 in some regions
5)
pa FHA loans are much cheaper now. Because FHA loans are federally insured, they tend to trade at a higher premium on the secondary market. This means lenders can often charge a lower rate.
These are just a few of the benefits of an
pa FHA mortgage. With these loans being on the sidelines for a few years many mortgage brokers and lenders aren’t fully aware of the guidelines or how FHA works in today’s market. This is why it is very important when choosing and a mortgage company that you make sure they are experienced and knowledgeable when it comes to FHA loans.
Chris Swartz of National Future Mortgage in Prospect Park Pennsylvania works directly with FHA underwriters in house and has the answers you need to any and all of your FHA mortgage questions. Christopher also has the staff and support to get your FHA loan closed fast. If you are considering a home purchase or refinance please contact Chris or anyone of the FHA experts in his office today to see how they can help you with your financing needs.
Using the website of National Future Mortgage is very simple. On the website you will find a secure short loan application that can be completed in two minutes. You can visit the website at http://www.nfmmortgage.com.
We highly recommend that anyone looking to secure FHA financing do their research and try to secure the best rate possible. Nearly all lender are offering the same products and similar rates so one should expect to go with the company that has the most experience and best customer service. Your calls should be answered immediately or returned promptly. No questions should go unanswered when dealing with a reputable bank either.
pennsylvania FHA loans may be the right option for you if you have at least a 620 middle score, two years of employment in the same line of work, and are purchasing or refinancing your primary residence. FHA loans are great because they have a higher loan to value offering than any other loan program available to the general population right now. In addition one can secure financing with rates in the 4-5% range which is a huge benefit. This along with the $8000 first time home buyer tax credit should hel to propel the housing market back to recover and the FHA loan product is one of the best tools mortgage broker have to assist in that process
Chris Swartz
National Future Mortgage
1-877-536-3509 x 11
cswartz@nationalfuturemortgage.com
707 Moore Station 2nd Fl
Prospect Park, PA 19076
new jersey FHA loans have not been utilized by many new jersey mortgage company for years. However, with the changing credit markets
pa FHA loans are back in full force.
new jersey FHA loans allow greater flexibility over the more traditional loan programs that fall under Fannie Mae or Freddie Mac guidelines. Here are just some of the advantages of
pa FHA mortgage:
1)
nj FHA mortgage require as little as 3.5% down and allow a seller assist up to 6%
2)
pennsylvania FHA mortgage are typically not as credit score driven. Borrowers can have lower scores and still get a great rate.
3)
pennsylvania FHA mortgage allow for non-occupying co-borrowers i.e. (mom/dad)
4)
pa FHA mortgage has increased loan limits up to $729,000 in some regions
5)
pa FHA loans are much cheaper now. Because FHA loans are federally insured, they tend to trade at a higher premium on the secondary market. This means lenders can often charge a lower rate.
These are just a few of the benefits of an
pa FHA mortgage. With these loans being on the sidelines for a few years many mortgage brokers and lenders aren’t fully aware of the guidelines or how FHA works in today’s market. This is why it is very important when choosing and a mortgage company that you make sure they are experienced and knowledgeable when it comes to FHA loans.
Chris Swartz of National Future Mortgage in Prospect Park Pennsylvania works directly with FHA underwriters in house and has the answers you need to any and all of your FHA mortgage questions. Christopher also has the staff and support to get your FHA loan closed fast. If you are considering a home purchase or refinance please contact Chris or anyone of the FHA experts in his office today to see how they can help you with your financing needs.
Using the website of National Future Mortgage is very simple. On the website you will find a secure short loan application that can be completed in two minutes. You can visit the website at http://www.nfmmortgage.com.
We highly recommend that anyone looking to secure FHA financing do their research and try to secure the best rate possible. Nearly all lender are offering the same products and similar rates so one should expect to go with the company that has the most experience and best customer service. Your calls should be answered immediately or returned promptly. No questions should go unanswered when dealing with a reputable bank either.
pennsylvania FHA loans may be the right option for you if you have at least a 620 middle score, two years of employment in the same line of work, and are purchasing or refinancing your primary residence. FHA loans are great because they have a higher loan to value offering than any other loan program available to the general population right now. In addition one can secure financing with rates in the 4-5% range which is a huge benefit. This along with the $8000 first time home buyer tax credit should hel to propel the housing market back to recover and the FHA loan product is one of the best tools mortgage broker have to assist in that process
Chris Swartz
National Future Mortgage
1-877-536-3509 x 11
cswartz@nationalfuturemortgage.com
707 Moore Station 2nd Fl
Prospect Park, PA 19076
Tuesday, June 16, 2009
Take Another Peek At A Mortgage Modification – It May Be Another Choice
Homeowners that were not approved for loan workout previously might want to give it another look. They might have been denied last year, but under the new guidelines, it’s a whole new world.
Many of the loan servicers are re-evaluating attorney loan modification applicants that were turned down previously but may be considered viable borrowers under the new guidelines. Part of the motivation for the lenders willingness to grant a chance to applicants for payment reductions could be the incentives paid to them over time of up to three to five years for successful payment reductions. Lenders can receive incentive payments just for trying to implement loan modifications so it’s no surprise that they are taking a more flexible stance. With more government funds directed at reducing a borrower’s loan to income ratio to a maximum of thirty one percent, banks are becoming increasingly comfortable with executing loan modifications with homeowners that were considered as high risks nine months ago.
The typical procedure for the second try mortgage workouts sets up a trial period for the borrower while the payment reductions is being evaluated. During the trial period the mortgage payment can be reduced from $500 to over $1,000 per month, but there is zero tolerance for late payments and other infractions. In fact, during the trial there are no grace periods for late payments at all. They need to ask what the due date is and the exact amount, with the cents.
If a payment during the trial period is received even one day late the borrower will be disqualified from the trial period and be deemed ineligible for the government sponsored loan program. This would be considered a second strike on the borrower, making any successful attempts to modify in the future very doubtful. A returned check will result in the same actions so borrowers are encouraged to send certified funds or make payments by wire transfer or Western Union.
Once the trial period is completed, the borrower can enter a loan workouts process following the guidelines set forth in the Making Home Affordable plan. Depending on the specific conditions facing the borrower, interest rates can be reset to as low as 2%, missed payments can be pushed back to the end of the loan, and there is a possibility that some of the principle on the loan balance can be reduced.
The second chance that the Making Home Affordable plan provides could be the difference between borrowers staying in their homes instead of losing them to foreclosure or filing bankruptcy. While the restrictions are tight, borrowers with the discipline to stay on track through the trial can get a modification which will save thousands of dollars and make their mortgage affordable again.
Don’t be fooled by the loan servicers on these second chance programs as they are a last resort and should not be taken lightly as the trail period does not guarantee a mods at the end. I say “buyers beware” on this program. Do everything you can by hiring an experience professional to get a payment reductions first before ever entering into this program.
If you want to get qualified quickly and securely please do so with our online inquiry form now at http://www.callams.com
Many of the loan servicers are re-evaluating attorney loan modification applicants that were turned down previously but may be considered viable borrowers under the new guidelines. Part of the motivation for the lenders willingness to grant a chance to applicants for payment reductions could be the incentives paid to them over time of up to three to five years for successful payment reductions. Lenders can receive incentive payments just for trying to implement loan modifications so it’s no surprise that they are taking a more flexible stance. With more government funds directed at reducing a borrower’s loan to income ratio to a maximum of thirty one percent, banks are becoming increasingly comfortable with executing loan modifications with homeowners that were considered as high risks nine months ago.
The typical procedure for the second try mortgage workouts sets up a trial period for the borrower while the payment reductions is being evaluated. During the trial period the mortgage payment can be reduced from $500 to over $1,000 per month, but there is zero tolerance for late payments and other infractions. In fact, during the trial there are no grace periods for late payments at all. They need to ask what the due date is and the exact amount, with the cents.
If a payment during the trial period is received even one day late the borrower will be disqualified from the trial period and be deemed ineligible for the government sponsored loan program. This would be considered a second strike on the borrower, making any successful attempts to modify in the future very doubtful. A returned check will result in the same actions so borrowers are encouraged to send certified funds or make payments by wire transfer or Western Union.
Once the trial period is completed, the borrower can enter a loan workouts process following the guidelines set forth in the Making Home Affordable plan. Depending on the specific conditions facing the borrower, interest rates can be reset to as low as 2%, missed payments can be pushed back to the end of the loan, and there is a possibility that some of the principle on the loan balance can be reduced.
The second chance that the Making Home Affordable plan provides could be the difference between borrowers staying in their homes instead of losing them to foreclosure or filing bankruptcy. While the restrictions are tight, borrowers with the discipline to stay on track through the trial can get a modification which will save thousands of dollars and make their mortgage affordable again.
Don’t be fooled by the loan servicers on these second chance programs as they are a last resort and should not be taken lightly as the trail period does not guarantee a mods at the end. I say “buyers beware” on this program. Do everything you can by hiring an experience professional to get a payment reductions first before ever entering into this program.
If you want to get qualified quickly and securely please do so with our online inquiry form now at http://www.callams.com
Sunday, June 7, 2009
What Are Lenders Looking For?
florida mortgage broker lenders considers your credit worthiness when choosing whether to extend a loan and how much of an interest rate you will pay. Your credit worthiness comes down to three things: your credit history, your income and the loan-to-value ratio.
Florida Credit history
Credit bureaus collect information about whether you pay your bills on time. They compile this information into a file called a credit report, and then boil all this down to a number between about 300 and 850. That number is your credit score, after Fair Isaac Corp., the company that pioneered credit scoring. Most lenders use the middle of the three scores. So for example if you had a 600, 620, and 640 score set… the lender would use the middle score or 620 in this example, as your qualifying score.
Income
florida fha loans want to know how much you make and how long you've been at your job, as well as how long you have been working in your particular field. They will look at your total debt-to-income ratio: How much of your monthly income goes toward paying the mortgage and other obligations, including the payments on the equity debt for which you are applying. Most lenders want to keep that ratio under 36 percent, but many programs such as FHA and non conventional loans will go to 55% or higher with compensating factors.
Be prepared to show your lender proofs of income and other earnings statements, or get ready to be turned down or pay a higher interest rate.
LTV
This is the ratio between what you owe on your house and what its worth. If your house is worth $100,000 and you still owe $80,000, your loan-to-value ratio is 80 percent, because $80,000 is 80 percent of $100,000. When you bought the house, calculating the LTV was straightforward: the mortgage amount divided by the home's price.
It's more complex when you get a home equity product, because the home's value probably has changed since you bought it. The lender will get an estimate of the home's current fair market value. Then it will add the current mortgage balance to the size of the equity loan or credit line that you want, and divide that by the home's current value. That results in the new Loan to value ratio ratio. Traditionally, equity lenders want to keep your total Loan to value ratio at 80 percent or less.
If you have been considering refinancing a home we urge you to call us or fill out our quick online application so that we can help you get qualified as quickly as possible. http://www.fivestarsmortgage.com
Florida Credit history
Credit bureaus collect information about whether you pay your bills on time. They compile this information into a file called a credit report, and then boil all this down to a number between about 300 and 850. That number is your credit score, after Fair Isaac Corp., the company that pioneered credit scoring. Most lenders use the middle of the three scores. So for example if you had a 600, 620, and 640 score set… the lender would use the middle score or 620 in this example, as your qualifying score.
Income
florida fha loans want to know how much you make and how long you've been at your job, as well as how long you have been working in your particular field. They will look at your total debt-to-income ratio: How much of your monthly income goes toward paying the mortgage and other obligations, including the payments on the equity debt for which you are applying. Most lenders want to keep that ratio under 36 percent, but many programs such as FHA and non conventional loans will go to 55% or higher with compensating factors.
Be prepared to show your lender proofs of income and other earnings statements, or get ready to be turned down or pay a higher interest rate.
LTV
This is the ratio between what you owe on your house and what its worth. If your house is worth $100,000 and you still owe $80,000, your loan-to-value ratio is 80 percent, because $80,000 is 80 percent of $100,000. When you bought the house, calculating the LTV was straightforward: the mortgage amount divided by the home's price.
It's more complex when you get a home equity product, because the home's value probably has changed since you bought it. The lender will get an estimate of the home's current fair market value. Then it will add the current mortgage balance to the size of the equity loan or credit line that you want, and divide that by the home's current value. That results in the new Loan to value ratio ratio. Traditionally, equity lenders want to keep your total Loan to value ratio at 80 percent or less.
If you have been considering refinancing a home we urge you to call us or fill out our quick online application so that we can help you get qualified as quickly as possible. http://www.fivestarsmortgage.com
Wednesday, May 27, 2009
What Are Your Possible Alternatives For Stopping Loan Modification
Do Nothing - The stress of facing foreclosure can push many folks into burying their head. Doing nothing may not be the best choice, instead research your options, or find a source that can help you and provide solid direction. One of the options may be doing a best loan modification to save your home. There are many options, so investigate the right one for you.
File Bankruptcy – There are new bankruptcy laws sitting in Congress to be voted on that would help the homeowner when it comes to principal balance reduction. These news laws have not been passed, but keep checking back to see if and when they are passed.
Currently, filing for bankruptcy may not relieve you of your obligation to repay your mortgage, the foreclosure may still proceed, and of course there is the negative impact to credit.
Short Sale - A short sale typically is executed to prevent a home foreclosure. It means that you are selling your home for less then what you owe on it. The impact to your credit is less severe then that of a foreclosure showing up on your credit.
Often a bank will choose to allow a short sale if they believe it will result in a smaller financial loss than foreclosing. The downside to a short sale is that it takes time to sell a home even at a bargain in this housing market, but it will also depend on your location. Keep in mind that the short sale process with the bank can be lengthy and usually takes 60 days or more for the bank to accept the short sale offer. Also, when the home is listed for sale, you are still responsible for your mortgage payment.
Loan Modification – A attorney loan modification an option that can save your home while putting you in a [mortgage|home loan|home payment|mortgage payment[/spin] you can afford. So how does a Loan Workout work and who is eligible for a Loan Modification? Below are some helpful tools and resources for you.
The most common Loan Workout are 'fixing' adjustable interest rates. A Loan Workout can help homeowners who can’t refinance or afford their current mortgage payments. Getting an approved loan modification for troubled home loans can help stop the foreclosure process.
Be very leery if your bank sends you a letter in the mail stating they will accept partial payments for three months and then after that period they tell you they MAY offer you a Loan Modification. This may be a scam by the bank just to collect money to help them. However, this does not help you in that the notice of default clock is still ticking. If the lender is not going to put you directly into a Loan Modification, call a professional for help immediately. Don’t get caught in their scam as they DO NOT promise the Loan Workout at the end of the three month period. Too many people have lost their homes because the banks did not put them into the Loan Modification after the three month period and started the notice of trustee sale shortly after that period.
We can offer free foreclosure help to homeowners that want to keep their home. Please use our short form to receive a free foreclosure assistance consultation. Our consultation is FREE. http://www.callalms.com
File Bankruptcy – There are new bankruptcy laws sitting in Congress to be voted on that would help the homeowner when it comes to principal balance reduction. These news laws have not been passed, but keep checking back to see if and when they are passed.
Currently, filing for bankruptcy may not relieve you of your obligation to repay your mortgage, the foreclosure may still proceed, and of course there is the negative impact to credit.
Short Sale - A short sale typically is executed to prevent a home foreclosure. It means that you are selling your home for less then what you owe on it. The impact to your credit is less severe then that of a foreclosure showing up on your credit.
Often a bank will choose to allow a short sale if they believe it will result in a smaller financial loss than foreclosing. The downside to a short sale is that it takes time to sell a home even at a bargain in this housing market, but it will also depend on your location. Keep in mind that the short sale process with the bank can be lengthy and usually takes 60 days or more for the bank to accept the short sale offer. Also, when the home is listed for sale, you are still responsible for your mortgage payment.
Loan Modification – A attorney loan modification an option that can save your home while putting you in a [mortgage|home loan|home payment|mortgage payment[/spin] you can afford. So how does a Loan Workout work and who is eligible for a Loan Modification? Below are some helpful tools and resources for you.
The most common Loan Workout are 'fixing' adjustable interest rates. A Loan Workout can help homeowners who can’t refinance or afford their current mortgage payments. Getting an approved loan modification for troubled home loans can help stop the foreclosure process.
Be very leery if your bank sends you a letter in the mail stating they will accept partial payments for three months and then after that period they tell you they MAY offer you a Loan Modification. This may be a scam by the bank just to collect money to help them. However, this does not help you in that the notice of default clock is still ticking. If the lender is not going to put you directly into a Loan Modification, call a professional for help immediately. Don’t get caught in their scam as they DO NOT promise the Loan Workout at the end of the three month period. Too many people have lost their homes because the banks did not put them into the Loan Modification after the three month period and started the notice of trustee sale shortly after that period.
We can offer free foreclosure help to homeowners that want to keep their home. Please use our short form to receive a free foreclosure assistance consultation. Our consultation is FREE. http://www.callalms.com
Wednesday, May 20, 2009
Frequent Questions About Federal Loan Mod Plan
Obamas plan to rescue the troubled housing market’s philosophy is based on helping struggling homeowners stay in their homes so that plummeting property values begin to taper off, thus forming a bottom. There are many who refute this idea based on the fact that over 50% of loan mod in the first quarter of 2008 re-defaulted within six months.
The fact is, these modified loans were based on the homeowner calling into the mortgage company directly and not an Attorney acting on behalf of a homeowner. It is a fact that servicer bullied homeowner back into bad loan terms once again as the homeowners didn’t know better and couldn’t fight these large institutions. That is one reason an experienced loan modification Attorney can help homeowners get into a better negotiated plan, as they know what to negotiate and won’t be bullied by these institutions. It is just like trying to complete your taxes on your own. A CPA is better as they know the ropes and can save you more money then if you did it yourself.
Many new details were released on Wednesday about the new restructure plan; let’s see how some of the questions on many homeowners’ minds were answered.
Will I get affordable monthly payments?
In his most recent letter to shareholders, the Oracle of Omaha himself, Warren Buffett, wrote, "Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage. Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay." The Governments new plan seems to echo this belief and centers on making monthly payments affordable in order to keep people in their homes. Remember not all bank are signing up and supporting The Governments request! And did I mention, it is our tax money that most of these banks are using to bail us out, I believe that is called TARP – Troubled Asset Relief Program!!
What's the magic payment number?
Thirty one percent. Obamas plan requires participating loan lender to reduce payments to no more than thirty eight of the homeowners gross monthly income. The government will then put in money in order to lower payments further to no more than thirty one percent of the gross monthly income. Do keep in mind that there are additional programs that are not based on someone’s debt ratio’s and rather look at a household’s cash flow and base it on their ability to pay. Also, not all banks are participating in this program.
What about my interest rate?
The first thing the lender would do is lower the interest rate to as low as 2 percent. If that's not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that's still not enough, the bank would forebear loan principal at no interest. The plan does not require lender to reduce mortgage principal, an important point to remember. It is also important to know that not all lender participate in the program and the ones that do may not go as low as 2%. As a homeowner, do not expect the 2% as it is not a for sure bet, it is only a suggestion. Most homeowners will likely see 3.75% to 5% as a final interest rate. If you are one of the lucky few that receives the 2%, then good for you!
Did someone say incentives?
There are quite a few incentives to both the homeowner and lender. mortgage company will be paid $1,000 for each modification and an additional $1,000 payout each year for up to three years, as long as the homeowner continues making payments. Homeowners can get up to $1,000 knocked off the principal of their loan each year for up to five years in reward for timely payments. Neither party can partake of these incentives until the modified loan payments have been made for at least three months on time.
Who is eligible?
The Presidents plan is an effort to help responsible homeowners —not speculators. Only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible. Occupancy status will be verified through documents, such as the borrower's credit report. The program is designed to target homeowners who are undergoing "serious hardships"—such as a loss of income—which have put them at risk of default. Only loans originated on or before Jan. 1, 2009, are eligible.
What if I have a home equity loan?
The details on this are still unclear. While the Presidents plan does address the issue of second liens such as home equity loans by offering incentives to extinguish them, it has not spelled out how it intends to work with second lien holders specifically.
Why would my servicer take part in the new plan?
Net present value: To determine if a particular mortgage will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn't. If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a mortgage industry consultant and a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan "clever," arguing that it would work to ensure broad participation. "When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify," Glaser says. "The Governments subsidy for the payment on the modification…tips the scale toward loan mod as a better deal for the investor."
http://www.callalms.com
The fact is, these modified loans were based on the homeowner calling into the mortgage company directly and not an Attorney acting on behalf of a homeowner. It is a fact that servicer bullied homeowner back into bad loan terms once again as the homeowners didn’t know better and couldn’t fight these large institutions. That is one reason an experienced loan modification Attorney can help homeowners get into a better negotiated plan, as they know what to negotiate and won’t be bullied by these institutions. It is just like trying to complete your taxes on your own. A CPA is better as they know the ropes and can save you more money then if you did it yourself.
Many new details were released on Wednesday about the new restructure plan; let’s see how some of the questions on many homeowners’ minds were answered.
Will I get affordable monthly payments?
In his most recent letter to shareholders, the Oracle of Omaha himself, Warren Buffett, wrote, "Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage. Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay." The Governments new plan seems to echo this belief and centers on making monthly payments affordable in order to keep people in their homes. Remember not all bank are signing up and supporting The Governments request! And did I mention, it is our tax money that most of these banks are using to bail us out, I believe that is called TARP – Troubled Asset Relief Program!!
What's the magic payment number?
Thirty one percent. Obamas plan requires participating loan lender to reduce payments to no more than thirty eight of the homeowners gross monthly income. The government will then put in money in order to lower payments further to no more than thirty one percent of the gross monthly income. Do keep in mind that there are additional programs that are not based on someone’s debt ratio’s and rather look at a household’s cash flow and base it on their ability to pay. Also, not all banks are participating in this program.
What about my interest rate?
The first thing the lender would do is lower the interest rate to as low as 2 percent. If that's not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that's still not enough, the bank would forebear loan principal at no interest. The plan does not require lender to reduce mortgage principal, an important point to remember. It is also important to know that not all lender participate in the program and the ones that do may not go as low as 2%. As a homeowner, do not expect the 2% as it is not a for sure bet, it is only a suggestion. Most homeowners will likely see 3.75% to 5% as a final interest rate. If you are one of the lucky few that receives the 2%, then good for you!
Did someone say incentives?
There are quite a few incentives to both the homeowner and lender. mortgage company will be paid $1,000 for each modification and an additional $1,000 payout each year for up to three years, as long as the homeowner continues making payments. Homeowners can get up to $1,000 knocked off the principal of their loan each year for up to five years in reward for timely payments. Neither party can partake of these incentives until the modified loan payments have been made for at least three months on time.
Who is eligible?
The Presidents plan is an effort to help responsible homeowners —not speculators. Only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible. Occupancy status will be verified through documents, such as the borrower's credit report. The program is designed to target homeowners who are undergoing "serious hardships"—such as a loss of income—which have put them at risk of default. Only loans originated on or before Jan. 1, 2009, are eligible.
What if I have a home equity loan?
The details on this are still unclear. While the Presidents plan does address the issue of second liens such as home equity loans by offering incentives to extinguish them, it has not spelled out how it intends to work with second lien holders specifically.
Why would my servicer take part in the new plan?
Net present value: To determine if a particular mortgage will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn't. If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a mortgage industry consultant and a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan "clever," arguing that it would work to ensure broad participation. "When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify," Glaser says. "The Governments subsidy for the payment on the modification…tips the scale toward loan mod as a better deal for the investor."
http://www.callalms.com
Downpayment Assitance on FHA Loans using 8000 tax credit
In what could be a huge boost to the housing market, HUD Secretary Shaun Donovan’s has decided to allow florida mortgage company to use the $8,000 home purchase credit to help cover their down payment and closing costs on Florida FHA mortgage loans.
One of the biggest challenges for first time home buyer is saving up enough money for a downpayment on their home. The FHA program in particular requires the borrower to come to closing with 3.5% of the purchase price as their downpayment. Often borrowers have to borrow these funds from work to supply home buyers with short-term or “bridge loans” of up to 10% of the purchase price, up to the amount of the $8,000 tax credit.
Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buyer would have been unable to access the home purchase credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS. Until then they borrowed the funds from family and friends with the understanding that they would be able to pay it back after they filed their income taxes.
The next step is to see how florida fha-approved lenders use HUD’s new guidelines to actually monetize the tax credit for first-time home buyers and structure the payback provisions of the loans. NAHB encourages lending institutions to act promptly to put these provisions into place.
To qualify for the first time home buyer credit, first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Buyers can take the credit on their 2008 or 2009 income tax return.
Information about the details of exactly how this program will be rolled out are still forthcoming. We do know that there are many states such as Missouri that are already offering some type of bridge loan program utilizing the first time home buyer credit for down payment assistance.
For further information on the $8,000 first time homebuyer home purchase credit and how you can use it to help you get an FHA financed loan with no money down please either call us immediately at 800-871-2636 or apply online at http://www.fivestarsmortgage.com and a representative will go over your information with you in detail.
One of the biggest challenges for first time home buyer is saving up enough money for a downpayment on their home. The FHA program in particular requires the borrower to come to closing with 3.5% of the purchase price as their downpayment. Often borrowers have to borrow these funds from work to supply home buyers with short-term or “bridge loans” of up to 10% of the purchase price, up to the amount of the $8,000 tax credit.
Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buyer would have been unable to access the home purchase credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS. Until then they borrowed the funds from family and friends with the understanding that they would be able to pay it back after they filed their income taxes.
The next step is to see how florida fha-approved lenders use HUD’s new guidelines to actually monetize the tax credit for first-time home buyers and structure the payback provisions of the loans. NAHB encourages lending institutions to act promptly to put these provisions into place.
To qualify for the first time home buyer credit, first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Buyers can take the credit on their 2008 or 2009 income tax return.
Information about the details of exactly how this program will be rolled out are still forthcoming. We do know that there are many states such as Missouri that are already offering some type of bridge loan program utilizing the first time home buyer credit for down payment assistance.
For further information on the $8,000 first time homebuyer home purchase credit and how you can use it to help you get an FHA financed loan with no money down please either call us immediately at 800-871-2636 or apply online at http://www.fivestarsmortgage.com and a representative will go over your information with you in detail.
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