Loan Modification, bankruptcy, debt settlement

How to qualify for a loan modification

July 26th, 2009 Posted in loan modification
Jul, 26 2009
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While the Obama Making Home Affordable plan is trying to help homeowners not all will qualify under the guidelines of this plan.  Here are a few items that may delay or prohibit you from getting a modification on your mortgage:

• You have lost your job

• You owe more than 5% above what your house is worth

• You are current on your mortgage

Responsible borrowers who are struggling to remain current on their mortgage payments can be eligible if they can document they are at risk of imminent default.

• You are already in default

This is sort of a catch 22.  They dont want you to be too current but they dont want you to be so late that you are already in default.

• Your lender does not want to participate

You need to yell at those greedy bastards until they submit.  Yell at them!


• Your mortgage is not insured or owned by Fannie Mae or Freddie Mac

Your mortgage loan must be owned or guaranteed by Freddie Mac or Fannie Mae or another participating financial services firm in order to participate in the Home Affordable Modification program. To determine who owns your loan, use the online lookup tools at www.MakingHomeAffordable.gov

• The reworked mortgage payment is more than 31% of your income

• Your mortgage is over $759,000

• The home is not your primary residence

You must own and currently occupy the property, so real estate investors and some owners of vacation properties will not be eligible. Your mortgage must also have been originated on or before January 1, 2009.

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Fannie Mae & Freddie Mac Loan Modifications Report

July 17th, 2009 Posted in mortgage software
Jul, 17 2009
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Federal Housing Finance Agency released the latest Foreclosure Prevention Report detailing actions taken by Fannie Mae and Freddie Mac to prevent unnecessary foreclosures and keep people in their homes.

The report includes loan modification data under FHFA’s Streamlined Modification Program, which was
initiated in November 2008 but ended in April 2009. This report does not include data on
refinancings or modifications from the Administration’s Making Home Affordable Program
announced in March 2009.

• Completed loan modifications fell 12 percent in April to approximately 13,800 from
March as the Enterprises ended their Streamlined Modification Program (SMP) and
began implementing the Home Affordable Modification Program (HAMP).
Modifications under the HAMP require a three-month trial period for the borrower to
demonstrate the ability and willingness to make modified payments. Modifications
under HAMP are counted as completed after the three-month trial period is completed.

• Loan modifications accounted for 48 percent of all completed foreclosure prevention
actions in April compared to 47 percent in March. Seventy-five percent of loans
modified in April involved both rate reductions and term extensions, up from 73 percent
in March.

• Completed short sales and deeds in lieu increased 15 percent in April 2009 to nearly
4,000, more than three times the volume one year earlier.

• Delinquencies continued to increase as approximately 71,700 more loans became 60 days
or more delinquent in April. Loans 60-plus-days delinquent increased approximately 7
percent in April to 1.2 million.

• Foreclosure starts in April declined 3 percent compared with March to nearly 85,900.
Foreclosure starts were lower in April as servicers began to temporarily suspend
foreclosure actions on delinquent borrowers who pursued a modification under HAMP,
while borrowers’ eligibility was being determined. If a borrower is determined to be
ineligible for HAMP, the servicer is required to consider other alternatives to prevent
foreclosure such as short sales and deeds in lieu.

• Foreclosure and third-party sales increased to 14,200 in April up from 9,300 in March
driven by sales of non-occupied properties, and owner-occupied properties already
determined to be ineligible for HAMP.

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Home Affordable Program expands for underwater homeowners

July 11th, 2009 Posted in loan modification
Jul, 11 2009
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Recent changes to the Home Affordable program has been announced.  Homeowners who now owe up to 125% of the value of their home can now benefit from the plan. The original cap was 105% so this change should help more Americans benefit.

Who Is Eligible For the Extended Benefits?

Many borrowers can’t find financing due to a decrease in their home value. This revised plan can provide help if the homeowner meets certain specifications.  The loan-to-value will now extend to 125% compared to the earlier 105%, however a borrower must be current on their mortgage payments and your mortgage must be owned by Fannie Mae or Freddie Mac.  The extended benefits apply only to first mortgages and the homeowner must take out a new 30 year fixed rate mortgage.

Is There A Deadline In Place For This Expanded Program?

The refinancing program ends in June, 2010.  Home owners with a Freddie Mac loan can access the program immediately – if they use their current loan provider.  If they wish to use a different lender, they will have to wait until October 1 to get the expanded benefits.

Borrowers with Fannie Mae loans must use their current lender to refinance their new mortgage. Some Fannie Mae borrowers can’t take immediate advantage of the program. Anyone who owes more than 105% of their home value must wait until September 1, 2009.

Do The Modifications Offer Any Help With Loan Payments?

The expanded program has 2 parts – one reaches out to 125% loan-to-value, the other offers assistance with loan payments under certain conditions. The new plan addresses the issues of homeowners who are in default or at risk of default. The modification means that they can lower their monthly payments to no more than 31% of their pre-tax income.

Should Borrowers Take Advantage Of The Extended Program?

The modifications to the current program are expected to open up refinancing for an extra 2,000,000 homeowners. The immediate goal of this initiative is to stabilize housing.  Mortgage rates have not yet fallen to 5% but are still at historically low rates.    Borrowers can get into motion under the expanded program – whether they are “underwater” or “upside down” with their mortgages.

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