Loan Modification - Making Home Affordable Program

Sun, 12 Jul 2009 16:02:13 -0500

A vast majority of mortgage holders wish they could lower their monthly mortgage payment, either to increase cash flow or to avoid foreclosure. Refinancing and loan modification offer two great ways to lower a monthly mortgage payment. Refinancing involves receiving a brand new mortgage with a lower interest rate. Loan modification involves modifying the existing mortgage to make monthly payments more affordable. Loan modifications are easier and faster to receive than refinancing, which requires more paperwork and a higher credit score.

A Temporary Solution?
While people see refinancing as a permanent solution, loan modification often only temporarily lowers mortgage payments. After five years, the rate of a modified loan may slowly rise to a preset maximum level. If you choose to modify your loan, be sure to speak with your lender about this preset maximum rate.

Making Home Affordable Loan Modification
Loan modification helps homeowners facing foreclosure to lower their monthly mortgage payments and remain in their home. The Obama Administration’s new program, Making Home Affordable, helps to reduce mortgage payments for eligible homeowners. Loan modification applicants must show a significant need for a lower monthly mortgage payment. To be eligible, homeowners can be current on their loan but struggling to make the payments, or they may have already missed one or more payments.

Improving the Process
This past week, the Department of Housing and Urban Development (HUD) sent letters to 25 banks, asking them to do more to help homeowners in financial peril. HUD asked the banks to increase staff and resources to help make it easier for people to receive a loan modification. To date, an estimated 175,000 loan modifications have been awarded under the Making Home Affordable program. The goal, however, is to help up to 4 million homeowners. In order to achieve their goal and make loan modification available to more people, the government recently raised the loan-to-value eligibility requirement from 105% to 125%. This means that homeowners whose mortgages are up to 125% of the value of their home can now receive a loan modification.

HUD now urges lenders to complete the loan modification process more speedily and efficiently, and to also help homeowners understand the ins and outs of loan modification. The more knowledgeable the homeowner, the better they’ll be able to understand and handle their personal finances. The government will begin evaluating each lender’s efforts and offer incentives for banks that help to improve and quicken the loan modification process.

California Loan Modification Scams: California Homeowners Beware

Mon, 06 Jul 2009 19:49:35 -0500

As if the mortgage / foreclosure crisis wasn’t bad enough on its own, it’s been worsened significantly by the fact that a number of scammers are taking advantage of the problem. One of the most devastating scams is the loan modification scam. Although this scam is affecting people all throughout the nation, it has been a particularly big problem in California. This is due in large part to the fact that California cities rank among the worst in terms of foreclosure rates which makes homeowners there just desperate enough to get taken in by these types of scams.

Loan modification scams involve promises of renegotiating a better mortgage fee if you’re willing to make some upfront payments in advance. People who are facing foreclosure if they can’t make their payments may find themselves tempted to take this deal. The problem is that the fees that you pay end up going out the window and you still owe your mortgage amount.

California homeowners can protect themselves from these scams by avoiding making mortgage choices that are based on their fears of foreclosure. Tips to follow include:

Be wary of anyone who approaches you with a mortgage offer. If you don’t actively seek out the offer by going to your lender or a qualified loan modification expert then the deal is probably something to look at with a cautious eye. Scammers may approach you through phone, email, mail or even at your doorstep.
Don’t be impressed by credentials. There are a lot of ex-realtors and ex-brokers in California who are getting involved in these scams since they’re out of work. Don’t assume that a deal is legitimate just because someone has a California real estate license.
Read the fine print. As with any mortgage contract, you should be sure to read the fine print carefully so that you fully understand what you’re getting into.
Understand that California homeowners are particularly at risk. Being aware that you are being targeted helps you to make wiser choices.
Don’t spend money to save money. This is a case where common sense should prevail. It simply shouldn’t cost you money to save money on your mortgage.

California cities have been hit hard by the foreclosure problem. Don’t let your fears about this drive you to get suckered into a scam that you’ll regret for years to come!

Mortgage Modification - Obama Mortgage Modification Articles and Tips

Loan Modification - Making Home Affordable Program

California Loan Modification Scams: California Homeowners Beware