Avoiding Foreclosures Now » Housing Market

When You Need To Avoid Foreclosure

admin — Mon, 08 Nov 2010 10:25:16 +0000

When You Need To Avoid Foreclosure

When You Need To Avoid Foreclosure

Free Online Articles Directory

Why Submit Articles?
Top Authors
Top Articles
FAQ
AB Answers

Publish Article

0 && $.browser.msie ) {
var ie_version = parseInt($.browser.version);
if(ie_version Hello Guest
Login

Email

Password

Remember me?
Lost Password?

Home Page > Finance > When You Need To Avoid Foreclosure

When You Need To Avoid Foreclosure

Edit Article |

Posted: Jan 15, 2008 |Comments: 0

]]>

Ask a question

Ask our experts your Finance related questions here…200 Characters left

Avoiding Foreclosure: What Are Your Options as a Homeowner?

admin — Wed, 03 Nov 2010 04:04:08 +0000

Avoiding Foreclosure: What Are Your Options as a Homeowner?

Avoiding Foreclosure, What are your options as a homeowner?

Do Nothing – The stress of facing foreclosure can push many homeowners into turning their head and letting the foreclosure process run it’s course. Doing nothing to save your have is the worst mistake you can make. You can avoid foreclosure with foreclosure assistance by a loan modification attorney. Saving your home from foreclosure should be your top priority. Homeownership is the key to financial wealth, personal health, and a stable family. Why do nothing when we can stop foreclosure today.

File Bankruptcy – While this option may of been very popular in the past new bankruptcy laws and restrictions make this once easy process very hard. Filing for bankruptcy may not relieve you of your obligation to repay your mortgage, foreclosures may still proceed, and it may damage your credit for the rest of your life. Avoid bankruptcy at all cost and consult a loan modification attorney before filing for bankruptcy.

Short Sale – A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. The downside to a short sale is that it takes time to sell a home even at a bargain in such a defunct housing market. There are foreclosures on every block, housing prices are rock bottom, and selling a short sale is next to impossible. The entire time the home is on the market you are still responsible for your mortgage payment, taxes, and insurance. Can you truly afford this option?

Loan Modification – Loan modification has quickly become the best option for homeowners facing home foreclosure. Loan modification is not the only option for homeowners trying to avoid foreclosure due to late mortgage payments. However; it is an option that can save your home while putting you in a mortgage you can afford. So how does loan modification work and who is eligible for a loan modification? Here are some helpful tools and resources below to help you understand your options.

The most common loan modifications are lowering the interest rate, reducing the principal balance, ‘fixing’ adjustable interest rates, forgiveness of payment defaults & Fees, or any combination of these. A loan modification can help home owners who can’t refinance or afford their current mortgage payments. Getting an approved loan modification for troubled home loans can help stop the foreclosure process.

A loan modification with a loan modification attorney may offer a more favorable loan modification agreement than your mortgage lender will offer you directly. With so many home loans adjusting to higher payments a loan workout with a Loan Modification Attorney, can modify mortgage loan terms fast and effectively. Obtaining foreclosure help and proper legal advice from a loan modification attorney will get you a better loan modification agreement with your lender and preserve your credit. If you are already behind in your mortgage payments this may help stop the foreclosure process and help you avoid foreclosure.

A loan workout needs to perform for both parties; your lender does not want your home and to go through the foreclosure process. However, they may not want to accept your partial payment and threaten foreclosure if you are late or in default. A HUD housing counselor or a loan modification attorney can offer free foreclosure advice to homeowners that want to keep their home.

Peter is the nation’s leading authority on lossmitigation and loan modification. His firm The Loan Modification Network connects homeowners with a nationally recognized attorneys licensed in all fifty states to assist homeowners in foreclosure prevention strategies and loan modifications. Call 800-437-2185 or go to http://www.us-loan-modification.com to learn more.

Mail this post

Technorati Tags: Avoid Foreclosure, Avoiding, Avoiding Foreclosure, Facing Foreclosure, filing for bankruptcy, Foreclosure, Foreclosure Assistance, Foreclosure Loan, Foreclosure Process, Home Foreclosure, homeowner, Homeownership, Housing Market, loan modification, Mortgage Foreclosures, Mortgage Payment, Mortgage Payments, New Bankruptcy Laws, Options, Personal Health, Rest Of Your Life, Rock Bottom, Stable Family, Top Priority

Four Ways to Avoid Foreclosure

admin — Sun, 31 Oct 2010 00:49:57 +0000

Four Ways to Avoid Foreclosure

Along with the economy and the financial sectors, the housing market is in a free fall and home mortgage lenders are tightening the purse strings. In the foreseeable future and recent past, experts estimate nearly three to four million people (1) will be unable to avoid foreclosure and will lose or have lost their homes due to the current recession. These are alarming numbers, especially when coupled with the fact that this statistic is projected to pass the number of homeowners who lost their properties during the Great Depression.

But is foreclosure always necessary? Could today’s homeowners, if prepared with the right kind of knowledge, avoid foreclosure? The answer is a resounding yes – in many cases, homeowners with a little foresight can work with their home mortgage lenders and often avoid foreclosure or stop it from occurring in the first place.

Work with Your Home Mortgage Lenders

Whether you’re struggling or you know someone who is, there are alternate means to avoid foreclosure. Begin by speaking with your lender to see what he can do for your particular situation. In most cases, home mortgage lenders and/or lending institutions can work with you to get better rates or help you make your payments in a timely fashion.

Below are four services that home mortgage lenders and institutions routinely offer to their clients. And with a little anticipation, you can avoid foreclosure and prevent it from happening in the future by being more informed and armed with some tricks of the trade!

1. Refinance - This is one of the most common activities to avoid foreclosure in the mortgage industry in which the homeowner tries to decrease his interest rate by paying off the actual balance on the mortgage. This is possible by creating a new mortgage with a different lender for a lower interest rate, with the possibility of paying off the actual mortgage and consolidating other debt such as credit cards, auto loans, student loans, or home equity loans) in order to make just one monthly payment.

2. Loan Modification - Generally offered by home mortgage lenders or even the homeowner’s financial institution, loan modification is made to either the rate or the balance of the mortgage. This happens when home mortgage lenders change the interest rate or the balance on the mortgage in order to decrease the amount of the monthly payment. This is one of the simplest processes to reduce monthly payments and avoid foreclosure because it’s done by the current lender, meaning the paperwork is minimal and there are no closing costs, which is ideal in those situations.

3. Repayment Plan - This service is only offered by home mortgage lenders to homeowners who are delinquent on their monthly payments. With this process, home mortgage lenders will add a portion of the past due balance on the mortgage to the monthly payment in order to pay off that late balance in a shorter period of time without paying extra interest. This option is generally offered to borrowing homeowners who have experienced a significant loss of income (or an increase in living expenses), but still have enough monthly income to correct the delinquency and re-instate the loan. Repayment of the loan must occur within the duration of a scheduled monthly plan, which can be achieved either through gradual repayment of the delinquent amount or through both repayment and loan modification.

4. Short Sale - With this process, home mortgage lenders and homeowners agree on selling the house for less than the balance on the mortgage in order to pay off the debt and avoid foreclosure. These circumstances are usually related to the current real estate market and the borrower’s financial situation. A short sale is typically executed to avoid foreclosure and prevent subsequent damage from appearing on the customer’s credit score for years into the future.

Have a Plan in Place

Take your future into your own hands! Oftentimes, simply knowing the steps of how to avoid foreclosure can be successful in preventing a problematic state of affairs from escalating by making efforts well in advance to remit or resume payments. This is a sticky situation you want to avoid at all costs – a foreclosure remains on your credit report years down the road and can significantly harm your credit score to the point where it may be difficult to purchase a house ever again.

Your lending institution wants to help you avoid foreclosure, keep your home, and for you to stay in it. Be proactive and, above all, be armed with the necessary knowledge to save your home and property!

Sources

1. http://www.virginia.edu/uvatoday/pdf/foreclosures_2009.doc

Neil A. Terc is the president of YourKasa.com, a unique, interactive website that lists real estate properties from both realtors and homeowners. Terc created the website to offer advice and discuss the common challenges that face new homebuyers and sellers. For the last seven years, he has been purchasing, selling, and leasing properties and is a self-taught real estate professional. To see some of the website’s real estate listings online, visit www.yourkasa.com.

Mail this post

Technorati Tags: Alarming Numbers, Anticipation, Auto Loans, Avoid, Credit Cards, Economy, Financial Sectors, Foreclosure, Foresight, Four, Great Depression, Home Mortgage Lenders, Housing Market, Interest Rate, Lending Institutions, Mortgage Industry, New Mortgage, Purse Strings, Recession, Statistic, Student Loans, Timely Fashion, Ways, Ways To Avoid Foreclosure

Making Home Affordable and Avoiding Foreclosure Rescue Sc…

admin — Mon, 27 Sep 2010 17:25:20 +0000

A report from the fourth quarter of 2008 shows that a growing number of homeowners are seeking lower mortgage payments through loan modification programs and mortgage refinancing. In an effort to stabilize the housing market and help millions of American homeowners reduce their monthly mortgage payments, the federal government has launched “Making Home Affordable.” A new effort with Freddie Mac, this program offers some of the most aggressive refinancing and loan workout opportunities for financially strapped borrowers to date. The program also warns those looking to cut their mortgage payments to beware of foreclosure “rescue” firms. These firms charge fees, but fail to provide solutions. To avoid scams, experts advise troubled borrowers to make sure they are dealing with a reputable organization by calling your loan servicer and HUD-certified housing counselor. Produced for Freddie Mac
Video Rating: 0 / 5

Mail this post

Technorati Tags: Affordable, American Homeowners, Avoiding, Avoiding Foreclosure, Borrowers, Counselor, Federal Government, Foreclosure, Fourth Quarter, Freddie Mac, home, Housing Market, Hud Housing, loan modification, Loan Mortgage, Loan Refinancing, Loan Servicer, Loan Workout, Lower Mortgage, Making, Monthly Mortgage Payments, Mortgage Refinancing, Refinancing Loan, Reputable Organization, Rescue, Sc..., Scams

Free Foreclosure Workshop

foreclosures — Fri, 08 Jan 2010 11:31:08 +0000

Are you tired of hearing about foreclosures and the housing market and not understanding what it all means? I think I have the solution for you!

We hold no cost foreclosure workshops that will help enlighten you about real estate and motivate you to get off the sidelines. I am confident that through this experience you will be awakened to financial opportunities that are little known, but powerful and profitable to those who employ them. We are excited to introduce you to wealth building ideas in real estate that will make you money today and in the future. Come and let local real estate millionaires share their trade secrets about Foreclosure Investing.

You will learn how to profit from the 4 hot money making strategies right now.

-Foreclosures
-Short Sales
-REO’s
-Auctions

Here is a little background about our company. We are a group of seasoned business people, real estate investors, entrepreneurs and multiple franchise owners that specialize in foreclosures, short-sales, property acquisition, bank negotiations, pre-foreclosures, wholesales, deed transfers, etc. Often times we work with homeowners who are in jeopardy of losing their home, attempt to negotiate lower pay-offs with their lenders, find investors for the properties or other buyers, short the amount owed and walk away with the difference. We are not Realtors…WE ARE REAL ESTATE INVESTORS. In this time of recession we are expanding rapidly and are looking for sharp, ambitious, money motivated individuals that want to create massive success. Our team buys and sells real estate with over 22,000 investors nationwide. We will teach and mentor the right candidate, provide you with deals, and assist you in creating a cash flow producing business through investing. My team has the ability to personally train those who are SERIOUS to achieve a substantial monthly income. We have a powerful, wealth creation system taught by multi-millionaires, that will show you step by step, how to create wealth.

We are looking for positive, creative and entrepreneurial minded associates able to bring new ideas to the table. You don’t need experience because full mentoring can be provided. See personally how we make your yearly salary in just a few deals. It is an exciting time as I believe that you will have tremendous conviction and respect for what it is that we do. It won’t be hard to see the opportunity for yourself as an investor and a business owner to be extremely lucrative. The compensation completely depends on YOUR output and ability to grasp the concepts. This is not a W-2 type opportunity, we give you knowledge to go out and make money for yourself!

Our seminars are open to everyone and are held nationwide. Please contact me for more information regarding opportunities in your area.

I look forward to hearing from you!

Aaron Clendenning
Los Angeles, CA
aaron@embracevision.com
310-662-1784

Read helpful info about forex investment – please make sure to read this web site. The times have come when concise info is truly within one click, use this possibility.

Mail this post

Technorati Tags: Cash Flow, Creation System, Deed Transfers, Foreclosure Investing, Foreclosures, Franchise Owners, Free Foreclosure, Hot Money, Housing Market, Jeopardy, Local Real Estate, Massive Success, Mentor, Millionaires, Property Acquisition, Real Estate Investors, Recession, Sidelines, Trade Secrets, Wealth Building, wealth creation

Why Bank Foreclosure Listing

foreclosures — Wed, 09 Dec 2009 05:46:56 +0000

The recent housing market has produced an great quantity of avenues to acquire foreclosed houses. By buying a foreclosure, you can actually save many thousands of dollars or much more on the market rate of the house. Lots of foreclosed homes are in superb order and ready for move in. Some homes require a couple of work to be livable. However, even the houses that require repairs are generally obtainable at such excellent deals that it’s worth buying them and fixing them up, especially if they’re in good neighborhoods. The bank foreclosure listing can assist you unearth just what you’re looking for.

There are a few diverse methods to get a bank foreclosure list. You may go to any of foreclosure listing sites on the Internet and subscribe for a monthly mailing list of foreclosures. This can be a nice option if you’re preparing on searching for the right residence for a time. But, if you want a home hurriedly, one of the things you could do is to go directly to the banks in your vicinity and inquire for a list of their recent foreclosures. In several situations, you’ll receive the list without cost, though a couple of banks may charge a token fee.

You may furthermore check your county court home records to find out what houses in your area are being foreclosed on or have previously been through the foreclosure process. You can do this at the court, or on the Internet, if your region court has an online web system. You could run through this public information to learn if the house has been empty for some time, if an public sale has already been held, if it’s a bank owned house, and which bank owns it. This is altogether very beneficial information in your search for the perfect home.

When you find the home you fancy, it’s just a matter of striking a deal with the bank. Many banks are ready to get foreclosures off of their accounts when possible, and so may be ready to offer you a deep discount to take the house away. And just reflect, to achieve these wonderful deals, all you need is a plain bank foreclosure list.

Visit us for more Free Foreclosure Information today.

Mail this post

Technorati Tags: Avenues, Bank Foreclosure, bank foreclosure list, bank foreclosure listing, Bank Owned House, Banks, Foreclosed Homes, Foreclosure, Foreclosure List, foreclosure listing, Foreclosure Process, Foreclosures, Housing Market, Perfect Home, Public Information, Thousands Of Dollars, Token Fee, Vicinity, Web System

Why A Bank Foreclosure List Can Help You Find A Great Deal On A House

foreclosures — Tue, 24 Nov 2009 05:08:10 +0000

The current down housing market has created an abundance of opportunities to score excellent deals on foreclosed homes. Buy buying a foreclosure, you can literally save tens of thousands of dollars or more on the market value of the house. More foreclosed homes are in excellent condition and ready for move in. Others need some work to be habitable. However, even the ones that need repairs are often available at such great deals that it’s worth buying them and fixing them up, especially if they’re in good neighborhoods. A bank foreclosure Bank list can help you find just what you’re looking for.

There are a couple of different ways to get a bank foreclosure list. You can go to any number of foreclosure listing websites on the Internet and subscribe to a monthly mailing list of foreclosures. This may be a great option if you’re planning on looking for the right home for a while. However, if you want a home quickly, one of the best things you can do is to go directly to the banks in your area and ask for a list of their current foreclosures. In many cases, you’ll get the list for free, though some banks may charge a nominal fee.

You can also check your county court house records to see what houses in your area are being foreclosed on or have already been through foreclosure. You can do this at the actual court house, or online, if your county court has an online system. You can go through this public information to find out if the house has been vacant for a while, if an auction has already been held, if it’s a bank owned home, and which bank owns it. This is all very valuable information in your search for the perfect house.

Once you find the house you want, it’s just a matter of working out a deal with the bank. Most banks are are willing to get foreclosures off of their books as soon as possible, and so may be willing to give you a deep discount to take the house away. And just think, to get these great deals, all you need is a simple bank foreclosure list.

Creative financing with good repayment terms–Lenders are more willing than ever to offer creative financing options to those with the credit to qualify for a mortgage. These lenders want to move the foreclosed houses off of their inventory, and if you can do that for them, they’re willing to work with you. Ask for a significant discount off the asking price, request interest-only payments for the first five years, or say you’d like a no money down loan. You just may get it.

The ability to make an excellent return on your investment in the future–Since housing prices are so low right now, and foreclosure prices are even lower, it will be easier than ever to recoup your investment in a few years’ time, when the housing market recovers. If you’re planning to keep the house for a while, that modest investment could turn into a profit of $100,000 or more when the market rebounds and you sell it.

Find useful things to know about blog – please make sure to go through the web page. The times have come when concise info is truly only one click of your mouse, use this possibility.

Mail this post

Technorati Tags: Abundance, Auction, Bank Foreclosure, Banks, County Court House, Court House Records, Current, Different Ways, Excellent Condition, Foreclosed Homes, Foreclosure, foreclosure help, Foreclosure List, foreclosure listing, Foreclosures, Great Deals, Housing Market, Public Information, Score, Tens Of Thousands, Thousands Of Dollars

Obama’s Loan Workout Plan: 6 Things You Want To Know

foreclosures — Sat, 21 Nov 2009 07:48:40 +0000

At the core of the President Barack Obama’s ambitious plan to rescue the housing market is the concept that restructuring distressed homes will keep struggling individual’s in their homes and help insert a floor beneath plummeting property values. With $75 billion dedicated to reworking troubled loans, that’s a big bet—especially considering that a top banking regulator said last December that almost 53 percent of loans modified in the first quarter of 2008 went bad again within six months. But supporters argue that mortgages modifications need to be properly engineered to work—and many early ones weren’t. To that end, the Obama administration on Wednesday unveiled fresh details on its plan to restructure at-risk loans and help as many as four million home owners avoid foreclosure. Here are seven things you need to know about Obama’s mortgage mod program.

1. Payments, not prices: The plan centers on the belief that struggling person’s will stay in their homes—even as values decline sharply—as long as they can make their monthly payments. Although not everyone agrees with this, billionaire investor Warren Buffett endorsed the philosophy in his most recent letter to shareholders. “Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its notes (so-called “upside-down” loans),” Buffett wrote. “Rather, foreclosures take place because homeowner’s can’t pay the monthly payment that they agreed to pay.”

2. Thirty-one percent: To that end, the administration’s plan requires participating loan servicer to reduce monthly payments to no more than 38 percent of the person’s gross monthly income. The government would then chip in to bring payments down further, to no more than 31 percent of the individual’s monthly income. In lowering the payment, the mortgage company would first reduce the interest rate to as low as 2 percent. If that’s not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that’s still not enough, the loan company would forebear loan principal at no interest. The plan does not, however, require bank to reduce notes principal, which Richard Green, the director of the Lusk Center for Real Estate at USC, considers a shortcoming. “For underwater loans, if you don’t write down the balance to be less than the value of the house, people still have an incentive to default,” Green says. “Writing down the principal first instead of last—which is what [the Obama administration is] proposing—makes sense to me.”

3. Cash incentives: To encourage participation, loan company will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the person’s continues making payments. borrower’s, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.

4. Financial hardship: The Obama administration is pitching its plan as an effort to help responsible homeowners ensnared in the historic housing slump and painful recession—not speculators. As such, only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible. Occupancy status will be verified through documents, such as the homeowner’s credit report. In addition, the program is designed to target homeowners who are undergoing “serious hardships”—such as a loss of income—which have put them at risk of default. To participate, individual’s will have to sign an affidavit of financial hardship and verify their income with documents. “If we would have had such stringent verification over the last four or five years, we probably wouldn’t be in as bad a position as we are in,” says Richard Moody, the chief economist at Mission Residential. But while Moody has no objection to such verification, obtaining documents from so many homeowners could be an onerous effort. “It’s going to be a very time-consuming process,” he says. Only loans originated on or before Jan. 1, 2009, are eligible, and modified payments will remain in place for five years. Now that the administration’s plan is out, lenders are free to begin modifying loans.

5. Net present value: To determine if a particular loans will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn’t. If the mortgage modification company loan is expected to produce more cash flow for the notes holder, the servicer is to restructure the loan. Howard Glaser, a homes industry consultant and a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan “clever,” arguing that it would work to ensure broad participation. “When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify,” Glaser says. “The federal subsidy for the payment on the modification…tips the scale toward modification as a better deal for the investor.”

6. Second liens: The Obama plan also addresses the issue of second liens—such as home equity loans or home equity lines of credit—by offering incentives to extinguish them. But key details on this component of the plan remained unclear. “Distinguishing the second lien is really important,” Green says. “[But] exactly how they are going to convince the second lien holder to do this is not clear to me at all.”

Shortcut to pragmatic tips about forex trading online – please go through this site. The times have come when concise information is really only one click of your mouse, use this opportunity.

Mail this post

Technorati Tags: Ambitious Plan, Barack Obama, Bet, Billionaire, First Quarter, Foreclosure, Foreclosures, Housing Market, Interest Rate, Letter To Shareholders, Loan Servicer, Loan Workout, michigan loan modification, Mortgage Company, Plan 6, Program 1, Property Values, Risk Loans, S Gross, Warren Buffett, Workout Plan

Some Advice How To Elude Foreclosure And Save Your Home

foreclosures — Thu, 01 Oct 2009 07:05:31 +0000

Realizing how to avoid foreclosure is really essential if you’ve ended up failing – or suppose you are going to end up missing – your mortgage paying . If you end up missing even one mortgage payment , you will be in big danger of home foreclosure. Home foreclosure can make a poor financial situation even worse.

Nevertheless , the truth is that lenders and banks really do not want to foreclose on you. This simple fact will assist you if you want to finish foreclosure right now . Because of the way the housing market and economy are concerned , it’s really best that they to allow you remain in your house. Consequently , if interested in how to stop a foreclosure, you may be surprised to realize how much your lender wants to assist you. Read on to learn more about how to avoid foreclosure.

If your house is about to be foreclosed, you’ve most probably made several financial errors which have prevented you from making mortgage paying on time. In a few situations , there are layoffs and emergencies of the medical kind that just can’t be avoided . Nevertheless , in other cases , it’s the outcome of poor money management. If that’s the cause , you’re going to knuckle down on your spending to help finish foreclosure.

You’ll have to check your finances with much detail . Looking over expenses will be needed if you’d like to know how to elude foreclosure. You’ll have to check to where your money is going exactly, as well as notice how much money you should have remaining every month. If you really knuckle down and notice what’s going on with your expenditures , you’ll probably find out from where the problem is going .

Several people may need help from a housing counselor. Housing counselors will take the time to review your finances along with you and help you in understanding what alterations can be done to stop foreclosure from happening to you. After that, you’ll need to call your lender to talk about ways to avoid your home being foreclosed on. Just informing them of your financial situation will help a lot. Usually , your lender will try to assist you. But if they don’t, you should to talk to a lawyer.

Your lender should probably offer both short-term and long-term options to keep your house from being foreclosed on. Typically , they’ll offer repayment plans.

It can be very hard know how to evade foreclosure. However, it’s most certainly a good idea to take time to call your lender. You should also review your finances with the help of a housing counselor.

Please also make sure to read about foreclosed Florida homes (aka foreclosed homes FL) on this foreclosure Florida homes site.

Mail this post

Technorati Tags: Alterations, Banks, Counselor, Counselors, Emergencies, Expenditures, finance, Financial Situation, foreclosed Florida homes, foreclosed homes FL, Foreclosure, Foreclosure House, Home Foreclosure, Housing Market, How Much Money, How To Avoid Foreclosure, How To Stop A Foreclosure, Layoffs, Lenders, Market Economy, Mortgage Payment, Paying On Time, Poor Money Management, real estate, Simple Fact

Is Your Home Mortgage Underwater? Need Underwater Mortgage Help?

foreclosures — Wed, 23 Sep 2009 18:08:39 +0000

By Dan North

So your mortgage is underwater and you are barely making payments. If you could only hang in ther until the housing market recovers. Possibly things are under control for the moment but there is an adjustment in the near future or a balloon coming up or a point is coming in the future when you don’t know what is going to happen. What if you are late on an installment and set off an increase to your ARM? What will you do then? What can you do? Perhaps you had these thoughts while you watched your mortgage turn upside down as your property value crashed.

Now is the time to do something before your credit takes a hit, but if you are already behind on your mortgage payments, act before your lender does. You have solutions now that you won’t when it is too late. Get the Modification of Mortgage you need.

Why can’t I refi a mortgage for an upside down home?

As you turn underwater on a house, refinancing becomes riskier for a lender. From the lenders perspective, they give you a loan then sell your mortgage on the secondary market. The investor who bought the mortgage assumes the risk, the lender has the money back and gets paid for servicing the loan. You deal with the lender but an investor owns your mortgage.

The lender makes money from creating a mortgage, servicing the contract and repeating the process over and over again with the same money. Once the home loan goes upside down the investor is at risk of losing his investment. He wants you to get refinanced by a new loan. He gets his money back, makes a profit and ends an unsecured investment.

The problem is why would another investor buy a loan on an upside down property. The investor would be exposing himself to unsecured risk for a low interest rate. With a higher return he might be willing to take that risk, but then why would you want to refinance to a higher interest rate and larger monthly payment.

Let’s say a lender does refinance though you are upside down on your mortgage. You get a lower rate and monthly payment. The lender goes to the secondary market to sell your underwater loan. Who is going to buy it? I wouldn’t. Would you? If your loan is negative by $100k, that is like paying $450k for a $350k house. A professional investor will pass.

The lender is in the business of writing mortgages, selling them, servicing them and making a profit on the same money repeatedly. If the lender can not sell your contract, they will turn it down. That is the brutal reality of an underwater mortgage.

What About Government Home Loan Help?

The government has not created enough incentive for an investor to take that much risk for so little return. Unless the government comes up with enough incentive or removes the risk, investors will not purchase these mortgages.

There is an option to refinancing thatworks, modification of mortgage or forbearance (even when you are not behind on your mortgage). Technically there is a difference.

Modification of mortgage is a permanent change of the mortgage contract. Usually from adjustable interest rate to fixed or possibly to a lowered interest rate or the term of the loan may be extended to lower payments. A permanent change to a lower interest rate and monthly payment does happen but takes more work to negotiate.

Looking at it from the lender and investor point of view. Financially the lender is not significantly affected as they sold the loan and will service it. The investor takes a bigger hit on future income but not nearly as much as he would for a principle reduction, short sale or foreclosure. The investor does not make as much income but does not lose all his investment.

Forbearance is a temporary mortgage restructuring, lowering mortgage interest, lowering mortgage payments or restructuring to interest only payment for a period of time. At the end of that period the loan reverts to the original terms of the mortgage contract. This is the most commonly approved of the residential mortgage solutions.

Looking at forbearance from the investors prospective, he makes less money for a number of years. The investment is not being paid back but he is getting some money. After the reduction period the investment continues at the original terms he purchased. Much better than losing his investment and the original investment stays intact. For the investor this is the best of the residential mortgage solutions.

The TARP Mortgage Assistance Programs – Oct 2008, the US Secretary of the Treasury stated that 70% of US home owners qualified for the TARP Mortgage Assistance Program. Not just those in deep financial difficulty current on their loan payments. If 70% of US home owners had a lower loan payment, more money would be injected back into the economy creating economic growth. The Stimulus Plan.

We compiled a data base of modifications we settled since Oct 2008 under the TARP Mortgage Assistance Programs. We know what modifications lenders approve and the criteria that must be present to approve those modifications.

The Author, Dan North, is making this database available to find out for yourself what you qualify for on a loan modification. This is a free service available to all US home owners.

Find out if you are one of the 70% who qualify under the Government TARP Mortgage Assistance Program.

Call Dan at 406-546-2517 or email Dan@Mortgage-Upside-Down.com and ask if you qualify.

Get important things to know about get free website traffic – please read the site. The time has come when proper info is really only one click of your mouse, use this chance.

Mail this post

Technorati Tags: Act, Balloon, Home Loan, Home Mortgage, Housing Market, Interest Rate, Investment, Investor, Lenders, Loan Mortgage, Money Loan, Mortgage Assistance Programs, Mortgage Help, Mortgage Lender, Mortgage Payments, Mortgage Servicing, Perspective, Refinancing, Risk