De-mystifying Loan Modifications

Shame on these Banks, it's Unacceptable that ONLY 31,000 Out of Over 700,000 Home Owners Getting Perm. Mods So Far???

2009-12-17T06:42:00.000-08:00

Yes, you read that title correctly. Just over 31,000 of almost Three Quarters of a Million home owners who've been offered the Home Affordable Modification Plan under the Governments TARP plan have been successfully finalized into a Permnanet Loan Mod.

This Treasury Department program; HAMP or Home Affordable Modification Plan is Sponsored and Funded thru Fannie Mae (FNMA) but the problems continue to fall squarely on the shoulders of understaffed, Under Trained Loss Mitigation Departments of the Banks.

President Obama has said he is Fed Up with all the Delays and Excuses being given by Big Banker and had the Treasury Department sit down with the heads of Citi, Chase, Wells, B of A, IndyMac, etc. to warn them all that penalties and fines would be imposed if they do not start getting their Acts in Gear and get these 3 Month Trial Payment Plan mods into completed and finalized Permanent HAMP's And Soon!

Only Time Will Tell, if these Fat Cat Bankers, who've All Reported Billions in Q3 Profits Recently, while the common folk trying to keep from losing their Homes, keep struggling in Limbo with the ongoing run-around from Loss Mitigation people they speak with?

It's a Travesty and I hope this Threat from the Government to the Big Banker, gets their collective attentions and they start Raising Up that paltry number of just over 31,000 !!!

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Housing & Mortgage News: ZEstimates on Home Values Explained#links

2009-08-13T20:09:00.000-07:00

Housing & Mortgage News: ZEstimates on Home Values Explained#links

The Mortgage Pulse

Loan Modifications de-mystified

2008-10-17T17:35:00.000-07:00

Loan Modifications Explained

By now most home owners have heard something about this new buzzword; Loan Modifications. Their are a few different types and some are not mod's at all so be careful who you might retain to consultant and represent you for this type of service. There are basically 3 types of loan modifications for home owners who have a legitimate reason and cause for their current hardship with making timely payments.

1) The first type is not the most beneficial but one the lender tries to arrange first (unless you know what to ask and request) as it keeps the lenders loss to a minimum if any. What they basically arrange is; when a customer is in arrears on several months of payments, has had a notice of default filed on the property, incurred penalties and legal fees from the lender, etc. The lender re-works those arrearages onto the Back-end of the loan and sometimes lowers the home owners interest rate for a short term; like 3 to 5 years. No principal reduction is involved here.

2) The second type is called a Soft modification - which usually involves re-writing the rate on average 1 to 3% lower than currently, for a short period of 2 to 5 years and principal reduction or elimination of a 2nd mortgage may be involved.

3) The third and most advantageous type is the Full Loan Mod - which in a nutshell is like a new refinance without the costs and paperwork involved with appraisals and a new mortgage loan. In essence the home owner gets a new fully amortized up to 30 year lower fixed or Interest Only rate, often at a lower principal balance than they have currently.

Special Forbearance agreements are also available and worth a mention here, but they are a totally different animal and will be covered in an upcoming blog.

I would strongly advise that a home owner should not go about trying to arrange their own Loan Modification, as the lender and their loss mitigation department are trained to protect their own interests as much as possible and they know they have the advantage when negotiating these loan mod's directly with the Trustor (home owner).

You do not necessarily need to involve or retain the services of an attorney (although sometimes their assistance helps push things through to finalize) but I strongly advise you do let an experienced professional assist with this tricky endeavor. It could mean the difference between just prolonging the foreclosure proceedings or truly being able to keep and stay in the home!

If you have any questions or would like a confidential free phone consultation about options to lower mortgage payments or saving your home, please call me to discuss further.