Last week was National Consumer Protection Week and the Government wanted to make the most of the heightened awareness to publish some general guidelines and advice. One of these releases was made by Florida Attorney General, Bill McCollum, on the issue of loan modification scams. This issue is right at the top of the list of complaints made to his office. The Attorney General pointed out how the desperation with which many homeowners are protecting their homes will continue to breed con artists that want to make the most of this desperation.

Not all loan modification companies are scams and some can provide specialized counsel in the somewhat complex world of loan modifications. However, there are some tell tale signs that we should keep alert to if we are dealing with loan modification companies. The Attorney General warned people from dealing with companies that ask for up-front fees on foreclosure rescue services. This is actually illegal and only carried out by loan modification agents of dubious reputation.

The Florida Attorney General advised listeners to contact their lenders before contacting third party companies or agents and to never pay up front for a loan modification. The Attorney General office is busy in Florida with over 90 companies being investigated and 20 open lawsuits.

The public statement echoes the words of advice shared by many experts. These guidelines highlight the main issues borrowers must be aware about when dealing with loan modification companies in order to avoid scams.

These tips include:

1)      Keep well away from companies that ?guarantee? they can save your home from foreclosure. This is like car salesman guaranteeing that if you buy a certain model you will get a date with the hottest girl in the class. It might help, but ultimately the decision is out of the salesman?s hands.

Only the lender can decide if a loan modification is granted or not. It is simply not true that any loan modification application method can assure your success.

2)      If your loan modification agency tells you to not contact your lender, lawyers or financial counselors, RUN! This is like the kidnapper asking the parents not to contact the police. The reason why scammers ask you not to contact anybody is just as obvious.

3)      Finally, if a business asks you to make payments directly to them and to stop paying your lender, you can be sure you are dealing with criminals. Run to your nearest police station and sue the crooks.

The fact is that the government has subsidized the creating of hundreds of counseling offices around the country to provide help to homeowners that are struggling with their mortgages. You are well advised to visit these free counseling agencies.

However, if you do not trust these agencies, still cannot tell the difference between an NPV test and a hardship letter, but still need a loan modification, make sure you find a reputable company that is not simply trying to take advantage of your situation.

Share At:

Hide Sites

Related posts:

1. Loan Modification Scams: Oregon AG Comes To The Rescue
2. Loan Modification Company Scams How to Avoid Them
3. California trys to deter loan modification and foreclosure rescue scams

1. Loan Modification Scams: Oregon AG Comes To The Rescue
2. Loan Modification Company Scams How to Avoid Them
3. California trys to deter loan modification and foreclosure rescue scams

The last three years have seen an amazing growth in the number of schemes designed to help homeowners keep their homes and help them avoid foreclosure. However, this is becoming increasingly difficult as the issue homeowners are having with their mortgages is not so much the interest rate and loan tenures, but with the fact they have lost their jobs, and cannot afford any kind of mortgage payments.

The fact that homeowners cannot afford their mortgages due to unemployment makes it very hard for governments to design the right loan modification or aid that will work for lenders and borrowers. The truth is that in many cases banks will profit more, or lose less, from foreclosures than loan modifications.

A new type of aid has been put forward to respond to the increasing percentage of prime loans that are heading towards foreclosure due to unemployment. These mortgages have little to be improved on; they generally have low interest rates and reasonable payment conditions. However, job loss has made it impossible for borrowers to continue making payments. The new solution is to provide temporary aid to the homeowner until he or she finds a job. This is an easier pill to swallow for lenders than making principal balance reductions or permanent loan modifications. It also sidesteps the long and slow road of loan modification trials.

However the question is what type of temporary aid should be provided. There are a variety of proposals. One is to simply pay the loans for unemployed homeowners that cannot afford their mortgage for a set number of months. This type of aid is already in place in various states.

Another option is to provide these borrowers with loans, the payment of which is deferred to a further date. This option does seem like giving people more rope with which to hang themselves, but it might be good is some circumstances. A third option some banks like Citibank have already started to use is to simply defer payments on a mortgage for a few months. The above mentioned bank has offered in some qualified cases 6 month deferment on mortgage payments to allow the borrower to get back on his or her feet.

This is a great option for the right borrowers because a) it does not cost the mortgage that much, b) does not have to go through such a strict and long selection process and c) actually deals with the problem of unemployed homeowners that do not qualify for loan modifications.

Needless to say many banks are wary of rescheduling payments that may never be made and putting off a foreclosure process that may already be inevitable. This is why the Government should look into the possibility of adding this measure to their flagship HAMP program and think of alternative measures that will deal with the increase in unemployment instead of just focusing on reducing interest rates. Many feel that the government is simply fighting the wrong war, (we are still talking about mortgages by the way) this measure might realign efforts in a direction that might be more productive. However a good selection process will be needed to assure that those that qualify really have the potential to find a job that will allow them to make realistic payments on their mortgage.

Share At:

Hide Sites

Related posts:

1. Loan Modification Alternative: Is Renting Your Home a Good Option
2. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
3. Loan Modification Alternatives: Wells Fargo Interest Only Loans

1. Loan Modification Alternative: Is Renting Your Home a Good Option
2. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
3. Loan Modification Alternatives: Wells Fargo Interest Only Loans

For borrowers, Federal Housing Administration changes are on the horizon. Some of the new policies are effective next month, and are all part of a plan to bolster FHA?s reserves.

Last year, FHA insured one-third of all approved mortgages. The capital-reserve ratio is no longer at the Congress-mandated 2 percent threshold. FHA Commissioner David Stevens even voiced his intention to hire a chief risk officer, a position the administration has never had since its 1934 inception.

?To be clear, the fund?s reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new Congressional action,? Stevens said in a September press release.

In efforts to avoid a bailout, the FHA will make a series of policy changes:

? The up-front mortgage insurance premium (MIP) will increase to 2.25 percent from 1.75 percent. This change is effective starting April 5.
? To qualify for the FHA?s 3.5 percent down payment program, borrowers must have a credit score of at least 580. Those with a sub-580 score have to put down at least 10 percent.
? Seller concessions will be reduced to 3 percent from 6 percent, meaning buyers will not be able to inflate a home?s appraised value in efforts to pay off their closing costs.
? The FHA will implement an array of enforcements on FHA lenders, such as publicly reporting lender rankings and seeking legislative action that would make mortgagees for loans they give and underwrite.

?When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency?s history,? Stevens said in a January press release.

In addition to upping the MIP, the FHA is requesting legislative action to increase the maximum annual MIP. Should such legislation pass, the FHA plans to shift some of the up-front MIP to annual MIP, allowing borrowers to pay off the increase in monthly payments.

With less than a month before the MIP jump is effective, the other policy changes have no definite start date, but the FHA plans to implement all changes by this summer.

Share At:

Hide Sites

Related posts:

1. Finally, some good sense coming from our industry
2. Commodities Reprieve Coming to an End
3. Cutting LTVs is coming to a market near you!

1. Finally, some good sense coming from our industry
2. Commodities Reprieve Coming to an End
3. Cutting LTVs is coming to a market near you!

Despite the Government?s best efforts and greatest intentions the wave of foreclosures continues to increase. The borrowers that are now defaulting on their mortgages and not qualifying for loan modifications are no longer people with subprime loans and bad credit rating. The fastest growing demographic in foreclosures are prime borrowers with prime loans that have lost their jobs and cannot afford any kind of deal on their mortgage.

This is a tragedy for the millions of families that face losing their homes. However there is a flip side to the crisis in the housing market. The flip side is that the foreclosure market is doing great. More and more buyers with cash in their pockets are looking for bargains among the millions of homes that are going through a foreclosure.

Many have the idea that the only homes that are on the foreclosure market are located in crime-ridden areas and are run down shacks. This is simply not true, during economic crisis like the one we are now going through all kinds of homes can be found, from beachfront luxury homes to shacks in the ghetto.

There is another myth a serious buyer must forget about as soon as possible. You are not going to find a great property selling at pennies on the dollar. Sometimes you can find amazing deals but this is probably because there are other circumstances that reduce the value of the home besides being on the foreclosure market.

However, you can get some great deals and discounts. A typical discount is probably around 5% less than the market value, although you can sometimes pay up to 30% or 40% less.

If you are savvy enough, this could only be the beginning of your savings. If you buy the property from the lender you could ask/demand for some of the buying costs to be waivered. If you ask nicely you might even get a discount on the interest rate or a break on the down payment.

Buying a home, whether on the foreclosure market or not, is a huge investment for most of us. It is therefore worth us spending some time doing our research and due diligence before we spend tens or even hundreds of thousands of dollars.

The foreclosure ball begins to roll when a borrowers falls behind on mortgage payments. A homeowner that loves his home will try his best to keep his home, making some payments, looking for a loan modification, or any other measure he can. However, if the home still forecloses the chances are that maintenance has not been carried out for some time on the home. Include the costs of bring maintenance up-to-date in your investment research.

What this might include will depend on the property. Some just need some gentle manicuring, while others have underlying structural damage that is prohibitively expensive to fix. It is true that homes in need of some tender lover and care will come at a discount, but it is important to make sure you can afford the cost of providing it.

Share At:

Hide Sites

Related posts:

1. Deed In Lieu of Foreclosure, The Last Resort Loan Modification
2. My Loan Modification Failed, How Soon Can I Buy A New Home After A Foreclosure
3. Underwater Mortgages and the Science of the Perfect Loan Modification

1. Deed In Lieu of Foreclosure, The Last Resort Loan Modification
2. My Loan Modification Failed, How Soon Can I Buy A New Home After A Foreclosure
3. Underwater Mortgages and the Science of the Perfect Loan Modification

The sad truth is that most troubled homeowners do not qualify for a trial loan modification. Of these, only a small percentage will receive a permanent modification. Analysts estimate that over 5 million households have underwater mortgages and are struggling with their payments. This represents nearly 20% of all American households. Many of these homeowners are going to lose their houses. The question is how soon can borrowers that foreclose on their homes buy a new home. The answer depends on the type of foreclosure and the extenuating circumstances of your particular case.

Who decides how soon you can get a new home loan?

The answer is the lender and their insurer. Although there is not one central body that sets fixed rules on this issue, there are clear guidelines set by Fannie Mae. Fannie Mae is America?s largest mortgage buyer. You might not even know that Fannie owns your mortgage because ?she? does this on the secondary mortgage market. Because this corporation buys such a large percentage of mortgages, lenders will often follow in line with its guidelines.

What are the guidelines?

They can be found in Fannie Mae?s website and documentation. Below I detail the current guidelines, but these can change quite regularly so I encourage you to see them as a ballpark figure and then check for yourself.

How long you must wait after a foreclosure?

The quick answer is 5 to 7 years. However if there are extenuating circumstances the waiting period can be reduced from 3 to 7 years.

What about when you carry out a Deed-in-Lieu of Foreclosure?

It is actually worse; you should expect to wait between 4 to 7 years. However, if there are extenuating circumstances this might be a good option for troubled borrowers that want to buy a new home quickly, as the waiting time is reduced from 2 to 7 years.

What about short sales?

The current waiting period is two years. However, and this is an important point, if you are current on your monthly payments you can purchase a new home immediately. This is a powerful reason to stay up-to-date with your payments if you possibly can.

What are extenuating circumstances?

This refers to the reasons (or excuses) you provide to explain why you cannot pay your mortgage. There are many extenuating circumstances but your bank is only going to accept those you can prove, with documentation, are beyond your control and fall within their list of acceptable extenuating circumstances.

Fannie May will consider death (of a close relative, or partner), illness, job transfer, serious injuries from an accident, and other mitigating factors that dramatically affect your ability to pay your loan and are outside of your control. Unfortunately not being able to afford your payments because the interest rate on your variable interest loan has increased is not considered a mitigating circumstance.

These guidelines can help you make better decisions when trying to find the best choice when foreclosing on your home. Make sure you can prove the financial hardship you are going through and try to work with your lender with an option that will give the best chances of getting a clean start as soon as possible.

Share At:

Hide Sites

Related posts:

1. Deed In Lieu of Foreclosure, The Last Resort Loan Modification
2. Loan Modification, New Guidelines For California
3. The Good Side of Loan Modification?s Failure, A Buoyant Foreclosure Market

1. Deed In Lieu of Foreclosure, The Last Resort Loan Modification
2. Loan Modification, New Guidelines For California
3. The Good Side of Loan Modification?s Failure, A Buoyant Foreclosure Market

Loan Modifications have taken over the financial news in the last year. This is not at all surprising, with over 11.3 million people, nearly 25 per cent of all homes, with underwater mortgages; this is an issue that has the nation?s attention.

This makes any research into the issue of loan modifications and their effect on foreclosure of great interest to borrowers, banks, and the government.

One professor whose research has received a lot of attention is Sanjiv Ranjan Das, from the University of Santa Clara in California. Last year Das attacked the underwater issue, this refers to borrowers whose mortgage balances are larger than the market value of their homes. The underwater issue is one of the big problems the United States housing market has to deal with.

Professor Sanjiv Ranjan Das had a large and interested audience to his research; one big fan was his namesake Sanjiv Das, a top executive at CitiMortgage, the fourth biggest bank in the US, lender and servicer of over seven hundred billion dollars in mortgages.

Interestingly, these two men, one a professor and the other a banker, share more than just a name. Not least among the things they have in common is an education at the Indian Institute of Management.

Now they are working together on research that seeks to explain the behavior of borrowers that are stuck with underwater homes, unemployment and mortgage payments they cannot afford.

Interestingly the partnership between the two Das, began when the professor started receiving emails meant for the CitiMortgage Das. However, the accidental emails were great for the research of Santa Clara?s professor.

According to Das? research the perfect or optimal loan modification includes an element of forgiving some of the balance in the loan. This is not easy for bankers to accept. Reducing the balance of the loan increases the speed at which the bank must accept losses and there is the added fear that it will create a counterproductive culture among borrowers.

However research has shown that re-defaulting on mortgages is much higher among borrowers that do not receive a reduction of their mortgage balance. This is because having an underwater home, a house with negative equity, makes many homeowners feel there is no financial sense in keeping their homes. However, when a principal reduction is carried out, even if only a modest one, re-defaulting on mortgages is sharply reduced.

Nevertheless lenders still shy away from this radical loan modification method and prefer using interest rate reductions and term extensions to reduce the monthly payments of troubled homeowners.

The good news is that the research carried out is getting the attention of the right people. The more is studied about the effects of income shock, or wealth shock, on troubled borrowers the more effective loan modifications and debt management as whole will be.

Share At:

Hide Sites

Related posts:

1. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
2. Captain Obvious: Piggyback mortgages make loan modification harder
3. Loan Modification Alternatives: Wells Fargo Interest Only Loans

1. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
2. Captain Obvious: Piggyback mortgages make loan modification harder
3. Loan Modification Alternatives: Wells Fargo Interest Only Loans

This Thursday the Obama Loan Modification Plan, HAMP, will be a year old. It was on the 4^th of March, 2009 that the Obama administration started the largest and most ambitious homeowner?s aid package since the 1930s. The goal was to stop the wave of foreclosures that was destroying the housing market. The Government?s reply was huge. The aim was to help four million homeowners avoid foreclosure and they were willing to spend $75 billion to do so. How are things looking as we approach HAMP?s first birthday. By December 2009 there were nearly 760,000 loans in the trial stage of the program. This three month trial stage is designed to test if the homeowner will pay his modified loan for three months before the modification is final. However, only 31,000 homeowners had actually received a permanent loan modification by the end of 2009. Of these many had seen only the slightest of changes to their monthly payments. The Obama administration realized they needed to do more, and quickly. This triggered a list of amendments and countermeasures designed to speed up the process and open the doors to more homeowners. Soon it became obvious that the issue was not the interest rates of bad loans that were hurting homeowners but the increasing rates of unemployment that was reducing the income of homeowners that could not afford to pay for their mortgage. In fact, the fastest growing demographic in the foreclosure market consisted of homeowners with prime loans that had lost their jobs. From the beginning of the program, the Treasury Department made it very clear that the program would not cater for families that no longer had an income because of losing their job. The aid was focused on families whose income had shrunk but could still afford the payments of a modified loan. Another issue was the complexity of the loan modification process. Homeowners complained that mortgage servicers were not consistent, lost important documents regularly and did not provide accurate information. Mortgage servicers on the other hand explained that homeowners often did not provide the right documentation and were less than honest when filling forms. Treasury reacted by simplifying the system and providing greater concessions to lenders and mortgage servicers. Industry leaders often made the valid point that the HAMP plan incentives did not cover the costs and it was better for them to continue charging fees from delinquent homeowners and foreclosure proceedings than approve loan modifications. The reaction was to increase the incentives and the arm twisting of lenders that would not comply with the program?s expectations. The incentives did become rather generous for both servicers and borrowers. Every loan a servicer modified came with a $1,000 upfront payment, with an extra thousand dollars every year the homeowners was current on payments. This means the Treasury will pay $1,000 every year the borrower is not delinquent, to reduce the loan balance. However the biggest subsidy was offered to reduce the actual monthly payments of mortgages. If the lender could reduce the monthly payments to 38% of the borrower?s income the government would pay for the cost of reducing the payments to 31% of the family?s income. The problem is that these measures have not been sufficient to stem the increase in foreclosures and new guidelines are being worked on to look for a solution. Unfortunately the prospects do not look good for the second year of the Obama Loan Modification Plan.

Share At:

Hide Sites

Related posts:

1. Obama Mortgage Plan, Pays For Paying Your Mortgage
2. The Obama Loan Modification Aid Program, What Are The Benefits?
3. Loan Modifications Are They Worth It ? An Overview In Simple English

1. Obama Mortgage Plan, Pays For Paying Your Mortgage
2. The Obama Loan Modification Aid Program, What Are The Benefits?
3. Loan Modifications Are They Worth It ? An Overview In Simple English

Recent projections estimate that by June, over 5 million homeowners will be heavily underwater. Let us define that a little more precisely. You are heavily underwater if the current market value of your home is only 75% of the balance on your mortgage. Between you and me, this means you are pretty screwed. The scary part is that if this projection proves true 10% of all US homeowners will be in this pickle; not the place you want an economy to be if you are trying to dig yourself out of a recession.

This is why the Obama Administration is running about like headless chickens trying to find solutions to this problem, quick, mid-term, and long term solutions; any kind of solution that will get us out of this.

It was this kind of panic that caused the government to put all their weight behind HAMP, the government?s loan modification program. Loan modifications were and always have been procedures designed to help homeowners stuck with sub-premium loans. Sub-premium loans as you all know is a kind way of talking of usury, loans with interest rates so high they give you vertigo if just to think about them. However loan modifications are not, and never have been a fix for homeowners with great loans that are unemployed and cannot afford their mortgage.

What alternative solutions are there?

One proposal is to buy time by simply banning foreclosures until other options have been looked into by the homeowner and lender. You have to love that proposal, if you cannot stop homes foreclosing by economics just make it illegal. As crazy as this measure seems it is designed to buy time and allow homeowners to find ways of keeping their home. This would take the current guideline of asking lenders to evaluate defaulting homeowners for a loan modification to the next level by making it compulsory.

The Mortgage Bankers Association says its members are already following this principle, and that foreclosure is always a last resort when all other options have been exhausted.

Another plan sponsored by the Mortgage Bankers Association is to not modify permanently the loans of troubled homeowners that have lost their jobs but simply to reduce their mortgage payments substantially for up to nine months to give homeowners a chance of looking for a new job.

As you probably guessed the Banker?s Association is requesting Treasury to pay for the program. Nevertheless, it does seem like a good idea to provide a homeowners with a break until he finds a new job than taking forever to marginally reduce the mortgage payments of an unemployed borrower.

However, many are analysts are saying that the real strategy to follow is to find a way to improve the economy. A strong job market would pull out the housing market from the fix it is in. On this theme, there were some good news last week. The number of homeowners starting to default unexpectedly dropped in the fourth quarter of 2009. However, the government also reported that home prices dropped by 1.6% in December; making it clear that the economy still has a long way to go before it gets a clean bill of health.

Share At:

Hide Sites

Related posts:

1. Foreclosure Re-default Drops by 26.5 When Loan Modifications Reduce Loan Balance
2. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
3. Credit Crisis: Are Loan Modifications The Answer

1. Foreclosure Re-default Drops by 26.5 When Loan Modifications Reduce Loan Balance
2. Loan Modification Alternative by CitiGroup: Refinancing 30 Year Fixed Rate Mortgages
3. Credit Crisis: Are Loan Modifications The Answer

Few subjects have created as much debate as the issue of walking away from of your home when there does not seem to be any financial sense in staying. Walking away from your home when it is worth less than the balance on your mortgage seems like the sensible thing to do for many. Research shows that when homes drop in value by over 25% owners start to think seriously about letting their homes go.

Many ask themselves, ?why not let the home go in default and rent a better place for less?

It is worth noting that we are talking about people who can afford their mortgages but simply decide to let their home go as a financial strategic calculation. The difference between truly troubled homeowners that would like to keep their homes and those that are defaulting on a mortgage to save money can be separated by a very thin line. But the evidence points to a growing number of borrowers that simply do not want to live under what many are calling ?house arrest?.

Some experts are pointing out that around 17% of those that defaulted in 2008, over half a million homeowners, did so because of a strategic calculation and not due to a lack of income to pay the loan.

It does seem like we are at the turning point in society?s psyche, a kind of revolution. People are not as attached to their property. Mortgage brokers are advising many to walk way, and a lot of them are listening. Something that has become common again is for homeowners to simply mail their house keys to the lender as a way of setting off a foreclosure, what is also called jingle mail.

There is nothing new to this reaction; previous recessions and crisis were also characterized by homeowners walking away from their homes. However what is different is the scale of the number of foreclosures. Four years ago, a handful of people had negative equity on their mortgage, now there are over 4.5 million homeowners whose house is worth less than 75% of the balance of their mortgage. The Real Estate is not doing any favors to the economy and is stalling again; causing experts to estimate that by June the number will climb to 5.1 million in June. That is simply a huge figure, it will mean that 1 out of every 10 homes in the United States will be going through a foreclosure.

Still many believe that this so called jingle mail revolution is the product of the media?s imagination. Something that is talked about but not actually carried out. The figures seem to say otherwise, but it is true that people generally do not want to move. They do not enjoying moving neighborhood, or their children?s school, which is what keeps so many underwater homeowners in their homes.

The eternal question is what the government should do about the whole matter. According to one estimate it would cost around $745 billion to bail out all underwater borrowers in the US. This is a little more than what it cost to bail out the banks in 2008. Most of us think it would be silly and wrong to bail out every troubled homeowner, but if the government does nothing it could cause even more homeowners to walk away, further crippling an already fragile economy.

Share At:

Hide Sites

Related posts:

1. Loan Modifications, NPV Test the Key to Loan Modification Success
2. Loan Modifications Scrutinized, 1340 Loan Modifications Investigated in California
3. Loan Modifications, What Is The Situation 3 Years After The Housing Bubble Burst

1. Loan Modifications, NPV Test the Key to Loan Modification Success
2. Loan Modifications Scrutinized, 1340 Loan Modifications Investigated in California
3. Loan Modifications, What Is The Situation 3 Years After The Housing Bubble Burst

There is a proposal for new guidelines in the way lenders and servicers deal with borrowers throughout the foreclosure process. These new guidelines are designed to improve communication between lenders and borrowers to improve the rate of troubled borrowers receive a loan modification for their mortgage.

One of the issues that leave many homeowners without a home is time and awareness. Troubled homeowners that are behind on their mortgage often do not realize the details of what will happen to their home and when.

This proposal suggests that lender and loan servicers, which are the companies that actually manage mortgage payments, should be required to provide homeowners with at least 30 days to reply when their loan modification has been denied under the HAMP program. These 30 days would give the borrower time to appeal, time during which the lender would not be allowed to continue with the foreclosure procedure.

The new guidelines would also put the responsibility on lenders and servicers to contact borrowers that are 60 days or more behind on their mortgage payments and fill the basic requirements for a HAMP loan modification. The guidelines are very specific in the nature of the notifications lenders must make before a foreclosure can proceed. There must be at least 4 telephone calls, two notices in writing, one of them which must be by certified mail. If these guidelines are approved it will mean a drastic increase in the work required for lenders to carry out a foreclosure. Extra staff will have to be brought in to fulfill these requirements.

However, these guidelines would also provide lenders with the right of denying a loan modification application that was filed within 6 days of a foreclosure sale. Loan Modifications can be lengthy processes and include a large investment in time and resources for lenders and servicers. Nevertheless, lenders will have to inform borrowers of the foreclosure schedule, and the deadline they must meet so that their application can be considered.

These are part of a list of requirements and guidelines the US Treasury is considering in their efforts of improving the rate of loan modification trial conversion and the number of troubled homeowners that apply for a loan modification. The idea is to screen those that actually qualify for the HAMP program and would benefit from the aid it provides.

Unfortunately the HAMP program is only designed to help troubled homeowners that still have a regular income and whose home has not dropped in value too drastically. For instance, if your mortgage is worth over 150% of your current home value, you might struggle to pass the NPV test required for a loan modification.

These proposals are working in line with others that are also being prepared for California and four other states that have suffered from a severe drop in house prices. The Obama Administration announced last week that these states will receive 1.5 billion dollar to be used at the discretion of each state to provide flexibility when considering borrowers for aid and loan modifications.

Share At:

Hide Sites

Related posts:

1. Loan Modification Low Numbers, Why?
2. Loan Modifications Are Going To Be Simpler, What Do You Need Now?
3. The Obama Loan Modification Plan, An Overview

1. Loan Modification Low Numbers, Why?
2. Loan Modifications Are Going To Be Simpler, What Do You Need Now?
3. The Obama Loan Modification Plan, An Overview