As a consumer, you must have a clear understanding of the program you are selecting.  Do not let any lender give you answers to questions that are not clear or you do not understand.  It is the consumer’s responsibility to understand exactly what their monthly mortgage payment will be and if this payment includes property taxes.  The consumer needs to select a program what meets their financial requirements.

When meeting with the lender, the consumer must be do the following:

• Always be truthful to the lender
• Have complete copies of last two (2) federal tax returns including all W-2’s on all borrowers
• Have copy of most recent paystub for all borrowers on the transaction
• Have a copy of last two (2) months bank statements on all accounts and any stock/investment accounts
• If refinancing, have a copy of most recent mortgage statement
• If refinancing, bring copies of original documents in regard to mortgage
• Prepare a list of all assets, including names of banks, average balances along with a list of all liabilities, i.e., auto loans, credit cards, 2^nd home mortgages.  Note the lender can receive this information via a copy of your credit report.  But having the information available at the meeting is important.

At this meeting, the lender will be able to approximate, what your debt to income ratio. The final ratio is determined by credit underwriting. 

By having this information available, the lender should be able to discuss with the consumer various types of loan programs, which will meet the consumer’s financial position.  If you are a new home buyer, it is important that you have money available for a down payment. 

So what is the debt settlement option? Debt settlement is a method by which a third party negotiations on behalf of the consumer with their lenders to reduce their outstanding balances. Typically, this program works only for unsecured credit cards but may include any other types of unsecured debt like medical bills.

Today’s consumer is asking themselves, “How am I going to get out of debt?” The answer to that question is to consider a debt settlement program as a method to resolve their current financial situation. Consumers have not faced this type of financial climate since the Great Depression and in that situation; they were not overburden by unsecured credit card debt. Consumers are riding a roller coaster of emotions because of their financial situation. This along with the fact they are facing financial hardships because of a lost of job, reduced salary, divorce, death or medical emergency.

The consumer needs to select an experienced debt settlement company.  This company should be able to provide answers to all the consumer’s questions in a way that the consumer clearly understands how the program works.  The consumer should ask for the following:

• Upfront copy of all documents along with fee and cost schedules
• A company profile
• List of accreditations or afflictions, i.e., Better Business Bureau and associations

With any program, there are pros and cons when considering a course of action.  It is the consumers responsible to ask questions and do their research on the debt settlement company they select.

 The con’s are:

·         Tax ramifications – consumer will need to report any amount of forgiven debt that exceeds $600. This means an increase to your tax bill.

·         Credit score will drop

Some of the pro’s are:

• One single monthly payment
• Avoiding bankruptcy as an option. Always consult with an attorney about this step.
• Stopping collection calls
• Possible elimination of lawsuits and other legal action
• Stop any extra charges to the credit card

Asking your lender to produce the note could be the difference between keeping your home or losing it to foreclosure.  The strategy entails asking your lender to produce the note for your mortgage.  In order for a lender to proceed with a foreclosure, they must be able to produce mortgage note for the property.  The strategy can be effective since producing mortgage documents by the lender can be difficult if not impossible for them.  At the least it will give you time to get your finances together so you can get caught up or work something out with your mortgage lender. Continue Reading »

Fannie Mae will be giving homeowners loan modification help.  DU Refi Plus will allow a homeowner to refinance their existing mortgage up to 105% of what the property is worth.  If you are upside down more than this on your home you may be out of luck.  You should still talk to your bank or mortgage holder to see if you can get a loan mod from them.

How Do I Qualify For A Loan Modification with Fannie Mae?

1.  You cannot get cash back of more than $2000.

2.  You can only redo a first mortgage.  You cannot pay off the balance of a 2nd mortgage.

3.  You cannot get a fannie mae loan mod with DU Refi Plus if you have an interest only loan.

4.  No refinancing of MyCommunityMortgages.

5.  No Balloon Mortgages.

6. No arms with fixed rate periods of less than 5 years.

Contact a mortgage loan officer to see if you can get a loan modification with the DU Refi Plus.

If you have a loan with CitiMortgage and are having trouble keeping up on your mortgage payment, you may be eligible for a loan modification with Citi.  The first step is to call the loss mitigation department at Citi Mortgage and see what you need to do to get the mortgage loan modification process started.

Citimortgage Loan Modification Requirements Continue Reading »

H4H stands for Hope for Homeowners.  This program was created by Congress to help those at risk of foreclosure and losing their homes.  It makes refinance options available that would not be available under conventional loan guidelines.  The program is effective until September 30, 2011.

How Does H4H work?

If you are having problems meeting your monthly mortgage obligation, Hope for Homeowners may be able to assist you by refinancing your current mortgage into 30 or 40 year options to lower your monthly mortgage payment.

What would be the first step to modify your mortgage with Bank of America?  I just spoke with a client who originally got an option arm with Countrywide.  Countrywide was purchase by Bank of America.  If you originally had a Countrywide mortgage you will need to speak with someone at Bank of America now for a loan modification.

Call Customer Service First To Try And Get A Loan Modification

If you are trying to get your mortgage modified, your first call should be to your lender.  Most lenders have loan work or loss mitigation departments to deal with the pre foreclosure homes.  You will most likely need to provide information on your financial wherewithal.  If you do not have any income, you will probably not be able to get your loan modified.  You have to be abel to demonstrate that you will be even able to handle the new payment that can be worked out for you.  You may have to give your lender your tax returns, pay stubs and financial statements to be even considered for a loan modificaiton.

Should I Hire A Loan Modification Attorney?

I have seen law firms starting to advertising for loan modifications.  The truth is that you can probably do a loan mod yourself without an attorney.  If you feel more comfortable using an attorney to handle the modification , I would not try to talk you out of it.  You have nothing to loose to try and do it yourself first however.

Who do you call if you are behind on your mortgage and need to modify your existing mortgage?  If you are behind on your mortgage and are facing foreclosure you should call your existing mortgage company at once.  Look for the number on your most recent statement.  Here is a list of the larger banks and the phone numbers of their loan modification departments.

GMAC Mortgage 800-799-9750

Wells Fargo  800-678-7986

Citigroup, Citibank and Wachovia  866-272-4749

JP Morgan Chase, Chase, Wamu, Washington Mutual  866-550-5705

Countrywide  800-669-0102

M&I  877-473-4333 or 877-849-6160

If you are behind or know that you are going to get behind on your mortgage, don’t wait until it is too late.  The sooner you start the more likely you will end up with a favorable result.  Save your home from foreclosure and make the call today.  You home is worth saving and loan modifications do work.  You do not need to pay someone to do a loan modification, you can do it yourself.  Use this information to save your home.

Will My Mortgage Company Modify My Loan Even If I Am Not Late On My Mortgage Payments?  Most mortgage companies and banks will not want to speak with you until you are behind on your mortgage payments.  I know a person that is going late on their mortgage on purpose just because they will not talk to him.  I do not advise just stopping payment to your mortgage company.  In the instance I was speaking about earlier is in regards to a gentleman who has a $6000 a month mortgage payment that they can see that they will not be able to make in the future due to a job loss.  He can see the future coming straight at them.

Contact Your Bank Before You Are Late On Your Mortgage

It is wise to contact your bank before you are late on your mortgage payment.  Some banks and lenders do have policies that allow for a loan modification to be completed even before a late payment has occurred.  If you are in an arm or have an option arm you may be eligible for an automatic loan modification.  You would just need to contact your lender about this.  I would not make any assumptions about loan modification until you have all of the information.

How To Negotiate With Your Bank For A Better Mortgage Rate.  If you are having a hard time making your mortgage payment, your bank may be willing to renegotiate new loan terms with you.  Through the loan modification process you can actually get a new interest rate, lower principal amount or even a forbearance agreement.  Most lenders including Bank of America, Chase, IndyMac, Wamu, Washington Mutual and Wells Fargo have dedicated departments set up just to help borrowers and homeowners work out new mortgage terms so they can stay in their home.  You can either go online or call your bank to ask for the loan modification or loss mitigation department to get started.

How Do I Get Started On A Loan Modification? Continue Reading »

What Happens If I Walk Away From My Home If I Can’t Pay The Mortgage?  If you are unable to pay your mortgage and are facing foreclosure, you don’t have too many options.  You could try to do a short sale or a loan modification.

How Does A Short Sale Work? Continue Reading »

How do I apply for a loan modification with my bank? Do I really need to use a loan modification company to negotiate new terms for my mortgage?

Who Can Do A Loan Modification And Get Paid? Continue Reading »

What is Obama’s mortgage bailout plan?  Incoming president Barack Obama has taken the position that he will change the direction that has been taken by the treasury and Henry Paulson.  He has talked about doing national foreclosure moratoriums and about the kind of asset purchase program that the FDIC is encouraging.  It is also likely that Obama will replace the current Secretary of the Treasury has fallen under criticism for using bailout monies to bail out the large banks rather than help the average guy on main street.  The trickle down theory starting by giving money to big bank-ers does not appear to be working.  Obama has been outspoken about having a trickle up plan and helping struggling home owners avoid f foreclosure.-

If you need assistance with a loan modification please call toll free 1-888-368-6668 for a no hassle mortgage review.

How will the streamlined loan modification program for Fannie Mae and Freddie Mac work?  This new mortgage bailout program will be set to begin on December 15, 2008.  It will apply only to mortgages that are owned or guaranteed by Freddie Mac or Fannie Mae.  A borrower who is 90 days delinquent will be eligible for a new mortgage with a monthly payment that does not exceed 38% of their gross monthly income.  Proof of a hardship will need to be justified, jobless or illness etc.  If you are not experiencing a loan default you will not be eligible for this mortgage bailout program.  You do not need to be in a bankruptcy proceeding.  This program is only available to primary residences.  Second homes and investment property will not qualify for this program.

For more information you can call Hope Now at 888-995-4673.

If you are interested in a loan modification please call toll free 1-888-368-6668 for a new hassle loan modification review.

How does the governments hope for homeowners program work?  If you are having a hard time paying your mortgage there are not many great options.  You could do a short sell, let the house go into foreclosure or loan modification.  If you do not fit into any of these categories, you have one last option.  This would be the Hope For Homeowners Program.  It is also known as H4H.  This program began on October 1, 2008 and will run until the end of September in 2011.  This program is the last hope for homeowners by bringing in the federal government who voluntarily will allow a homeowner to refinance under the H4H guidelines.  The H4H program will reduce the size of the mortgage to a max of 90% of the properties current appraised value.  The other condition is that you can only have a 30 year fixed rate mortgage.  FHA will be insuring up to $300 billion of these types of loans.  The only kicker is that you will have to split 50% of the appreciated value for as long as you own the home or pay off the mortgage.  You will not be able to take out a second mortgage under this program unless the money will be used to maintain the property.  For more information please call 888-995-4673 or 800-225-5342.  You can also visit the Hope For Homeowners website at http://www.hopeforhomeownersprogram.org.