All posts in Loan Modification

Short Sale Reform – Home Affordable Foreclosure Alternative Plan

by Justin Miller on April 7, 2010 in Foreclosure, Loan Modification, Short Sales with No comments

I don’t recall reading this last week but I am sure it will make some very irate.  ” I find it interesting that before the plan even went into effect today, the Administration upped the incentives a week ago, doubling the amount of cash to $3000 offered as borrower “relocation expenses” and juicing the payoffs to the others as well. Of course they want to push short sales because of course they know that their modification program isn’t working as planned.”

The reason the program will struggle and probably be as helpful as the other programs is because the banks need to “weigh what’s going to save them the most money and cause them the least bleeding on their books.”  It’s all about their balance sheet and since the mark-to-market accounting rules were changed to let banks keep loans on their books as “performing” even if the values of the underlying properties have fallen below the loan amount.  I guess time will tell.

http://www.cnbc.com//id/36179757 

FHA Announces Principle Reductions

by Justin Miller on March 26, 2010 in Loan Modification with No comments

Below is the link for what FHA just announced.  Please Note:  It hasn’t been implemented yet. 

If you are an optimist and do NOT have an FHA loan feel free to read it. They are saying that “total mortgage debt for the borrower after the refinancing cannot be greater than 115% of the current value of the home – including both first and any other mortgages.” 

See page 2 of the PDF where it states that you must be current on your mortgage, a primary residence, etc.

http://portal.hud.gov/portal/page/portal/ver-6/HUD/federal_housing_administration/docs/from_the_desk_of_April_2010.pdf 

Bank of America’s Principle Reductions – The Catch

by Justin Miller on March 25, 2010 in Loan Modification with 1 Comment

I saw a lot of articles on this yesterday and I said to myself “I will believe it when I see it.”  Again, I am not a pessimist but everything something is announced on helping the housing crisis it never ends up doing everything it was supposed to and quite frankly, it never even comes close.

Well yet again there is a catch to this.  It is supposed to help around 45,000 borrowers but “Before you get your hopes up, keep this in mind: These 45,000 borrowers are a small subset of the bank’s customers. Principal forgiveness will be offered only to people who got certain kinds of loans from Countrywide Home Loans. Bank of America bought Countrywide in 2008.”

http://www.cnbc.com//id/36023591 

Loan Modifications & Your Credit Score

by Justin Miller on March 20, 2010 in Loan Modification with No comments

Just as the article states, many are finding out that after they got their loan modification even though they pay and have paid their mortgage on time have seen their scores drop as much as 100 points.

The bottom line is that it is much better than going into foreclosure or doing a short sale in the long run.  Just continue to make all of your payments on time on all debts and you will see your credit score continue to prove.  If you are having financial difficulties and needed a loan modification what do you need your credit for right now? 

“The consumer is going into the program because they’re in a financial bind,” he said. “Other lenders would need to be aware of that.”

http://www.msnbc.msn.com/id/35949027/ns/business-personal_finance/ 

Walking Away Isn’t That Easy

by Justin Miller on March 13, 2010 in Foreclosure, Loan Modification, Short Sales with No comments

The article makes a great point that I wasn’t aware of with people in California being able to walk away so easy which is frustrating to this individual who wrote in because so many made a fortune in CA during the boom. 

“California is one of 11 states where lenders are prohibited by law from filing deficiency judgments against borrowers to collect the difference between what was owed and what was collected when the asset was sold. The others are: Alaska, Arizona, Iowa, Montana, North Dakota, Oregon, Pennsylvania, South Carolina, Washington and Wisconsin. But your worries may be unfounded. And besides, you may be able to work out a deal in which the lender agrees not to come after you.”

http://www.marketwatch.com/story/walking-away-from-property-isnt-always-so-easy-2010-03-12?siteid=rss&rss=1 

PA Knows How To Help Unemployed Homeowners

by Justin Miller on March 8, 2010 in Foreclosure, Loan Modification with No comments

I wrote about this before but below is another article on it.  As I have said time and time again the people who deserve help are those who lost their jobs and this program does just that.  The success rate of 80% says it all to me.  Towards the end of the article it explains how the program works.

“The Smiths are among the 3,250 homeowners that the housing agency’s mortgage assistance program saved from foreclosure last year. Created in 1983, the initiative provides loans of up to $60,000 for as long as 36 months to Pennsylvania residents suffering financial hardship, such as job loss, divorce or medical problems.

The program, which has distributed $450 million on behalf of 43,000 homeowners since its inception, has an 80% success rate in helping borrowers avoid foreclosure. And the recent housing crisis has prompted thousands to seek assistance. A record 14,000 homeowners applied for help in 2009, up from 10,000 in most years.”

http://money.cnn.com/2010/03/08/news/economy/mortgage_help_for_unemployed/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29&utm_content=Google+Reader

Mortgage Forbearance For The Unemployed

by Justin Miller on February 25, 2010 in Foreclosure, Loan Modification with No comments

The Mortgage Bankers Association proposed to give the unemployed up to 9 months forbearance on their mortgage payments.  I am confused by this because how are you reducing the payment to 31% of their income when they just lost their income?

“Under the proposal, loan servicers would reduce eligible borrowers’ monthly payments to no more than 31% of their household income for up to nine months. Unlike a modification, however, the arrears would be tacked onto the end of the mortgage.”

I think they are on the right track with helping the unemployed because that is who really deserves the help but they have to be able to come up with something better than this.

http://money.cnn.com/2010/02/24/real_estate/forbearance_for_unemployed/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

$1.5 Billion For Struggling Homeowners

by Justin Miller on February 20, 2010 in Bailout, Foreclosure, Loan Modification with No comments

Will this work this time?  I guess we will find out.  I do like that it is targeting help for the unemployed.  It targets states where the average price for all homes have fallen more than 20% from their peak.  Of course Florida is one of them. 

CNBC reported that the initiatives may include:

  • Measures for unemployed homeowners;
  • Programs to assist borrowers owing more than their home is now worth;
  • Programs that help address challenges arising from second mortgages; or
  • Other programs encouraging sustainable and affordable homeownership.

http://www.cnbc.com//id/35480131    

Citi Mortgage’s Plan

by Justin Miller on February 11, 2010 in Foreclosure, Loan Modification, Short Sales with No comments

This is interesting from Citi Mortgage.  Finally it sounds like they are getting smarter. 

Instead of borrowers falling further and further behind on their mortgages, leading to an eventual foreclosure sale, they can stay in their homes for up to six months, if they agree to then hand over the deed to the lender.

By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees. Because of those savings, CitiMortgage, a division of Citigroup (C, Fortune 500), will grant quite generous terms to participants.

http://money.cnn.com/2010/02/11/real_estate/Citibank_alternative_to_foreclosure/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

Fannie & Freddie To Concentrate On Helping Homeowners Stay In Their Homes

by Justin Miller on February 9, 2010 in Loan Modification with No comments

It seems they are attempting to care less about their balance sheet and more about the homeowner, or so they say.  Again, I am not a pessimist but I hear the stories all the time about people not getting any help.  My comments aren’t based on these articles that I read and write about.  I hope I am wrong about this. 

The article has a scary statistic in that 9 out of 10 mortgages are funded by Fannie, Freddie, and the government.  WOW!

Assistant Treasury Secretary Michael Barr says that because Fannie and Freddie are “owned by the taxpayers in the middle of the biggest housing crisis in 80 years,” it would be unrealistic to expect the companies wouldn’t be used to help stabilize the market. He says the administration’s actions have been “prudent” and “consistent with taxpayer protection.”

http://online.wsj.com/article/SB10001424052748704362004575001042824028862.html?mod=rss_Politics_And_Policy

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