How long does a loan modification take to complete?
It takes around 30-60 day. However, it can take longer in some cases.
What is involved in a Modification?
A loan modification entails a lot of details that deals with the unpaid principal balance, the house value, the pay off terms, and the expected interest rate.
What is a Deed-in-lieu(DIL) of foreclosure?
A DIL is an alternative to foreclosure. It is better to save your personal credit so that you don't have to have your property go to foreclosure sale; That will do major damage to your credit.
A DIL is when you give back your house to your mortgage lender, usually due to not being to afford the payments or sometimes for other reasons; the house is then auctioned off to the highest bidder, and you are relieved of the payments. Plus, it is far more milder on your credit report than a foreclosure, or even a short sale. It is settling your account.
Which is better a Loan modification or a DIL?
A loan modification is considered a better option if you can get the terms you desire from your mortgage company which is decided by them. It's like finding a common ground. A DIL on the other hand is just realizing that you may not be able to afford the home and just giving it back assuming that your lender will take it back, and "let you off the hook."
If I had a modification in the past can I now qualify for the new modification recently passed on March 4th, 2009?
Yes, many lenders are still doing a loan modification with the new rescue modification, even if you had a modification in the past.There are incentives involved for the home owner and lender alike that did not exist with the old modification plan. This one is more motivational for everyone involved. I have seen homeowners that have had 3 mortgage loan modifications. It depends on your lender, they make the decision.
If I am current on time with my mortgage payments can I get a Modification?
Yes, you still might be eligible to get a lower mortgage payment by your mortgage company.
If am in foreclosure can I get a modification?
Yes, you still can try to modify your loan. In fact, many lenders are holding off on foreclosure since it's usually the last and less desirable choice for mortgage companies due to the great loss for them and homeowners. Lender loose an average of $30-$40,000 on the average foreclosed home.
Will my lender charge for President Obama loan modification bill that was passed recently?
Currently there are no charges with this recent modification. Unless you use a 3rd party to complete the work for you. A 3rd party doing the mortgage follow up will charge you, unless they are a non-profit organization.
Is my loan modification guaranteed?
No. There are many factors involved. I can say this though, this last program is more accepting and more inclusive than the past ones.
Does my mortgage company have to participate with this latest loan modification?
No. Mortgage companies do this at will. Not all lenders will participate, but most will. However, if they choose not to participate in the new rescue program, they will usually continue with their old loan modification program.
Is a refinance better than a loan modification and if so why?
It depends. If you have good to excellent credit, and full proof of income you will get a great new low interest rate by refinancing based on the current market rate; which is better than some loan modifications interest rates. Mortgage loan modifications also offer competitive rates too. Some as low as 1% with Fannie Mae/Freddie Mack refinance.
What will happen after I get a reduction in my mortgage with the new plan?
After you complete your trial period if you have one, and most modifications(mods) do have a trial period for new modifications; then you will see a lower interest rate, and your loan will be brought current once again.You will now have a brand new start. Most lenders are hoping that many homeowners will now stay current and not end up back in the same past due situation again, as if they never had help.
What are some of the qualifications for the stability and affordability plan just passed?
Some general qualifications are:
The borrowers monthly mortgage payments must be greater than 31% of their gross monthly pay.
If borrower's other debts(such as credit cards, car payments, other mortgages, etc.)are greater than 55% of their gross monthly income, they might be required to sign up for counseling.
Borrowers must have verifiable income to qualify(Unemployment is not considered to be long term income that would qualify a borrower
Just the 1St lien will qualify for this program assuming that is your primarily residence; There is a regular loan modification for any 2ND liens.
What kind of interest rates can I expect if I am accepted for the new modficaiton?
Interest rates are as low as 1%, but the average modification interest rate is somewhere around 4% range. Remember the earlier mods had a higher interest rate to begin with a few years back, now the rate are gotten lower on mods.
Will I get a arm or a fixed rate mortgage?
Fixed rate mortgage are the main stay of modification.
Do I have to have good credit for a modification?
No. It is not based on a borrower's credit, but on their own personal and property situation. You credit may be checked to verify your employer, property address, etc. but it is not for your credit score standing.
How will my credit change if I got accepted for this new loan?
You will begin to report current with the credit bureaus once the modification trial period is completed.
Are there any real benefits for getting a Loan modification?
Yes. You will now start off fresh with a new low interest, possibly yearly principal reduction for up to 5 yrs if you stay current, low fixed rate; And with time if you continue to pay on time, you will then clear up some of those past due mortgage payments blunders.
Are there ways to stop my foreclosure?
Yes. There are many ways to stop a foreclosure, even if you have not made a mortgage payment in months. Talk to your lender.
Can Short Sales damaging?
Yes; Because when a borrower does a short sale the property is accepted for a short sale by the lender or servicer. The lender views it as "something is better than nothing" for the sale of the property if the borrower is unable to make the payment which beats a foreclosure.The property will not sell for the total amount owed on the house loan; The homeowner will not be responsible for the difference of what was owed on the loan, and what the house was sold for; but will owe the taxes on that amount in the form of income tax .
For example, lets say you owed $200,000 on a home loan but you short sold it for $160,000. The $40,000 will be considered as income, and you would then be taxed on it as you would on an income made. Imagine if your failed to pay the taxes owed on the $40,000, and it compounded with IRS penalties. That might become a big Internal Revenue Service problem for you and our family. A DIL or modification would be a much more attractive option than a short sale. Don't get me wrong, a short sale is better that a foreclosure sale.
Can i get al loan modification twice
Yes.
Foreclosure Prevention Tips
Make you payments before the demand date expires to avoid foreclosure and attorney fees, and watch you sale date.
how to get a free loan modification
Talk to your lender, the HAMP is free modification program like most modification programs; the key though is that you only get 1 shot at the HAMP, not 2 or 3 like custom(lenders modification). If you are denied you are not allowed to re-apply, per government rules, not lenders. Remember, the HAMP has the most attractive term, etc. for a modification.
Is it normal for mortgage companies to take pictures of your home
Yes, your lender has an interest in your property.
For Mortgage modification letter guide
Reo expense
All of your past due plus, any expense spent on marketing or maintaining the property, attorney fees, and court costs.
Repayment plans/mortgage
Talk to your lender to see if they do repayment plans.
Tips for mortgage loan modification requests.
Follow up regularly with your lender, and if you hired a 3rd party have them follow up regularly.
Where Can I go For The Best Help When Seeking a Loan Modification?
The best place to seek loan modification help is with your lender or servicer. Sure there are other great organizations out there offering homeowners loan modification help, such as HUD, NACA, Hope, among others. But do not hesitate to start with your lender 1st.
Why do strangers take pictures of your house.
Because your mortgage company hires contractors to do so; they have an interest in the property, they want to make sure it’s not vacant or being vandalized.
What is the best way to go for home modification
Ask your lender for it or hire a mortgage professional such as us who are knowledgeable and experienced.
What is required if someone self employed request a loan modiication
2 years worth of income, tax returns and profit and loss statement.
What is negative escrow
Lets say you are escrowed for only taxes and your last years property taxes were $1200; and your mortgage company has your escrow amount at $100/mth for 12 months to get your caught up. Now if your property taxes raise to $2400/year, now you have $1200 negative escrow, so your lender will have to raise your taxes another $100/mth to $200/mth to get your caught up with your negative escrow.
Name change of borrower on mortgage
The name can be changed on the deed of trust , you can do a quit claim deed but it does not change the name on the mortgage note, but to truly change the name on a mortgage you must refinance or sell the property. The person with the note in his/her name will be the one to feel the effect of late payment on their credit.
What if you can't pay modified home loan
Let your lender know so that they can try to make changes, sometimes it’s possible.
Tips for getting mortgage modification
Follow up regularly and provide any missing documents promptly.
Indiana Loan Modifications
Your loan can be modified regardless of your state.
How long does mortgage modification last
Your loan can be modified most commonly for 30 years, some less, some more.
How late do you have to be on mortgage for pictures to be taken of home?
30 days or more and pictures can be taken by contractor showing your home still exists and is not vandalized.
How do I get a mortgage modification with good credit.
Apply for the HAMP modification which allows your to be current when you apply.
Extension on foreclosure sale date
An extension can be granted depending on if your lender allows it, if they do, they will contact the foreclosure attorney they hired to do the sale, and call them off the sale.
Will I be able to buy a house if I had a loan modification
Interesting question, if your loan was modified it will show under a modification program such as the “government making home affordable program.” So it will reflect in your credit rating somewhat. Regardless, it is better than foreclosure on your credit.
Reclaiming a sold foreclosure
A home can be reclaimed after a foreclosure sale depending on the situation and the state in which the property is located in. There has to be a good reason to take a home out of Real Estate Owned(REO) status if the home is in a state which has no redemption period. See the free chart at http://www.mortgagecrisistips.com/ForeclosureInformation.html to determine.
Mortgage reduction program
Loan modifications, refinancing, or making an escrowed loan non-escrow.
Improving the chance of getting a loan modification
Provide any needed missing documents, also know what range your income needs to be in to even qualify; 31% housing to income ratio or more.
Hardship letter for loan modification due to loss of job
Being unemployed and applying for a loan modification can sometimes be satisfied with unemployment benefits as long as there is still at least 9 month of benefits remaining; or if there is a spouse contributing and has income. Get hardship letter tips at http://www.mortgagecrisistips.com/Hardship-Letter-Info.html
Following up with your lender
Make sure you are following up at least weekly.
Do it yourself loan modification free
You can do it yourself with this content rich site and others, we also offer a do-it-yourself mortgage loan modification guide. However a professional is usually far more experienced than the average homeowner when it comes to getting a modification. You may contact us with requests at support@mortgagecrisistips.com or try to use our sites information to assist you along the way.
Can you go in to foreclosure because of fees
No, but they will remain on your loan until the loan is paid off or refinanced. A big plus, the outstanding fees, not missing mortgage payments, do not incur interest or late fees.
Can bank charge loan modification fee
Banks use to charge fees for some loan modification program, but most are moving away from this practice currently. However, the government program such as Making Home Affordable Modification Program(HAMP), or Principal Reduction Alternative(PRA) do not charge loan modification fee(s). Modification fees were charged primarily during the early days of mortgage loan modification shortly after the mortgage plunge of late 2006.
Will mortgage company extend due or maturity date
Your mortgage company will modify your mortgage and extend your mortgage if it makes sense, but often all options are put on the table for the best possible workout for both parties.
Do I need good credit for a mortgage loan modification
No. But a credit check may be done, but not for credit score purpose.
Can a Foreclosure sale date be extended
Yes, your sale date can be extended again and again if there is a good reason to do so, and it does not get abused by a borrower.
You’re Getting a Mod, Now What?
Well you have worked hard and you did what you needed to do to get your modification. Your loan has been modified , so what should you expect next.
Once your loan has been modified you will get written documentation indication that your loan has been modified. The loan will pick up any past due payments outstanding on the loan, and put that amount into the total unpaid principal balance. In some cases some of the principal balances can be lowered to help out homeowners more, to try to avoid foreclosure; That’s right. Lets say you owe $300,000 on your outstanding mortgage balance, then you get a loan modification and you suddenly see your Un paid principal balance is now at $250,000; that’s very possible and is becoming more and more common these days in today’s tough mortgage climate. The loan modification will include the new terms which includes the new interest rate, whether it’s an Adjustable Rate Mortgage or a Fixed Rate Mortgage, the term or length of the loan, the total outstanding balance of the new loan, and the next due date. The papers will need to be signed, notarized, and returned back to your mortgage company as soon as possible.
There use to be charges associated with loan modifications, but with the newest government program under President Obama those charges have been eliminated. In the past with the older modifications, a company, a real estate agent, a broker, or an attorney might charge a person $1,500-$3,000 on average to complete a loan modification due to all the work and follow up that is involved in the whole process. Then the mortgage company or the loan servicer would also charge, lets says another $1,300 in fees associated with their attorney fees, court and recording fees. That amount is then charged on top of your mortgage balance to get the new lower house payment. Before it is all over with your could have had another $4,300 of new charges just to get a new lower payment, which will end up saving you a great deal of money over the life of the loan.
The modification is compared to a refinanced, but it is a loan modification. They do have a lot of similarities but there are different. A loan modification is primarily for homeowners with poor credit and someone not wanting to be charged the fees of a refinance to get lower mortgage payments, but ironically many homeowners doing a loan modification will end up with almost the same amount of charges to get their mortgage lowered. Most homeowners with good credit will just go out and do a refinance, to just get it over with. Plus, a refinance is usually completed in about 2-3 week unlike a modification, which takes about 2-4 months with no guarantees. But not everyone can refinance, you need decent credit with a fairly good payment history to be accepted and get a good interest rate worth completing.
When the Modification process is completed , then the loan will be brought current. The loan will start reporting current with the credit bureaus once again. It is now the homeowners responsibility to maintain their current mortgage payment status with the credit bureau, or else they might find themselves back in the same position as they were before the modification was completed. One of the best way to do that is to not take on excessive obligation just because you received a new lower house payment. Now unforeseen circumstances are fine, since a lot of times there is no way for anyone to see those types of things coming. For example : loosing a job, or death in the family, other than that play it safe by keeping your expenses down in these tough economic times. Good luck with your housing endeavors.
2009 Mortgage Stimulus
For Anyone looking to take advantage of the mortgages stimulus plan will need to provide a decent amount of documented proof in order to get a loan modification. Unlike the days of non-documentation and stated income loan, they days are pretty much a thing of the past; And that was one of the biggest reasons why we got into such a jam in the 1st place. The stated income days of the early to mid 2000’s created an enormous amount of problems that has required corrective actions from Washington, lenders and homeowners. Many stated income were inflated or never existed at all, and many homeowners that got loans came forward that they did not deserve came forward with their stories, while others have begun class action law suite against lending institutions for entrapping them with predatory loans. Lenders became irresponsible, greedy, and gave loans to many individuals that had not place taking out a mortgage at all. We are correcting for all the mistakes that we have made previously as a society. With the stimulus those previous behaviors of lenders and borrowers will not be able to foster anymore, so we are back to documenting everything once again.
Anyone looking to modify their mortgage loan can expect to go through a thorough approval process. A homeowner expecting to do a modification must expect to provide verifiable proof of income including tax returns, pay stubs, award letters, profit/loss statements for the self-employed, among other documents. Homeowners must show that they live on the property and provide proof of that with things such as : utility bills, phone numbers showing your residence, voters registration cars, etc. Anyone providing information to try to acquire a loan modification should make sure that they are being honest and truthful to the best of the ability; The reason is, anyone caught falsifying information will face serious re-percussion from the government for falsifying information, it states that. That was included in this stimulus plan to deter any misrepresentation of anyone seeking legitimate help. This I believe is a good thing to ensure that we don’t get back into another housing crisis in another 5 yrs from now after we come out of this one.
Refinance Vs Loan Modification
Why do some homeowners refinance and others do a loan modification. There might be a lot of reasons driving their decisions. I will discuss some of the key differences between a loan modification and a mortgage refinance. They both can be beneficial to someone with a high mortgage payment, and so they need help with one of the two options to lower their mortgage payment. They have similarities and differences alike.
A refinance is simply completing the process of acquiring a new loan for financing your current mortgage. When you do a refinance you will have to run your credit to make sure you meet the minimum requirements in order to be eligible for the new mortgage loan you are requesting. You will have to provide proof of employment, meet a minimum income requirement, have a favorable payment history, in addition to other requirements. When you do a refinance you are paying off your old loan with a new loan, and starting over again. You can take out equity in the property or leave it in, you can often do a 15yr or 30yr mortgage. You might want to do a refinance with a cash out, and pay off other high interest loan such as credit card , revolving store card , other loans, finance college, buy a new car, among other things. When doing a refinance you credit score and payment history will be weighed heavily in the final determination to grant you credit, or whether to deny you.
Most refinance will take anywhere from about 2-4 weeks to complete and your old mortgage lender will be paid off. Homeowners will often refinance when the interest rate is atleast 1 percentage point lower than what they are currently paying. It’s good to refinance if you intend to stay in the home for atleast another 5yrs. The reason why it’s not a good idea to refinance if you don’t plan on staying in the property for atleast 5yrs more years is due to the fees and closing costs associated with doing a refinance; It is like getting a new loan, infact that is exactly what you are doing.
So you are having to pay closing cost that will take a few years to recover from before you actually start seeing some real savings. You would not need to refinance if you are not going to get a lower interest rate of atleast 1 point, it would not be worth it in the short term. If you need to cash out without refinancing or selling the property, you might want to consider a Home Equity Line Of Credit(HELOC), it’s like a kind of revolving credit that your home serves as collateral for that loan. You can get access to the funds all at once, or over a period of time.
A loan modification is similar to a refinance because it is actually lowering your mortgage interest rate to give you a lower house payment. However, there are some key differences. A loan modification is not focused on your credit score or credit history as much, if at all. Infact, some loan modification don’t ever check your credit history, a small number of lenders do check, but your credit is not weighed much at all for granting you a loan modification. When you do a loan modification you will almost never get charged anything, and if you do they are minor charges that are rolled up in the mortgage balance, unlike a refinance. Many people that apply for a loan modification are often is deep trouble with their mortgage payments, they commonly have a poor credit history, and will often not qualify for a refinance. Not to say a refinance is better that a loan modification, but a lot of homeowners that do a loan modification do it as a last option. Homeowners that do a refinance do it because they have a choice, and they can try to use their good credit history to their advantage by getting a lower mortgage payment. Ironically, a refinance and a loan modification will often give you a much lower mortgage interest rate over your prior interest rate, and yet the requirements for getting them can be so different. One of the disadvantages of a modification is not being able to have a cash out option whenever the homeowner does it; With a refinance a cash out option does exists. Once the loan is modified the loan will start over again with good credit reporting showing up with the credit bureaus.
So keep in mind that is not so much whether you did a loan modification or a refinance, because the end results are often very similar. The key is to get your mortgage payment lower by any means assessable and necessary to you. You will be happy you did it when you are suddenly paying a lot less than you ever did.
Has Our Economy Bottomed
Some economic experts seem to think that our mortgage problems has bottomed out while many other disagree, and others that disagree and don’t think we have seen a bottom yet. The ironic thing about seeing a bottom in the economy is that when the bottom has occurred, no one really knows until the numbers have started to turn around. So until then it’s just speculation.
I personally believe that the housing market has not seen it’s lowest point yet. However, when the stimulus is completed then we will gradually start to see a bottom in the market and a gradual turn around in our economy for the good. We need to remember that almost every one of our economic down turns has started and ended with the mortgage industry. The problem started out with the slack lending policies, speculation, and the belief that the mortgage industry could not stop appreciating which created an artificial bubble in the economy. The “artificial bubble” created could not sustain it’s self, and so at it’s highest point it has to burst, in order to correct itself which creates a down turn in the market which leads us back to an equilibrium housing price. Once the price is back at a level that is affordable, new buyer will start to come back into the market, and incentives like the mortgage stimulus that gives $8,000 to new buyer will also speed up the process too.
Once the price is back at a level that is affordable, new buyer will start to come back into the market, and incentives like the mortgage stimulus that gives $8,000 to new buyer will also speed up the process too.
The mortgage industry crisis has not bottomed yet but is has almost ran it’s course for the past 3 yrs now, and many true experts believe that there will be an end soon. 2010 is probably the most commonly predicted turn around time for the industry and the economy. The stimulus plan will be one of the biggest contributor in helping to end this recession. This will encourage more prospective buyers to take that leap back into buying once again, which will increase consumer confidence, and help to foster the growth of the mortgage movement get us back into the right direction.
Mortgage Investors
There are many investors that have benefited tremendously in this down real estate market. While investors are benefiting, simultaneously there are millions of Americans that are in real trouble with keeping up with their mortgage payments. Lenders are happy to unload these troubled assets to any one looking to buy them. So that they can clear them off their books.
Investors seeking properties for investment purposes have no shortages. There are close to 2 million vacant and deteriorating homes sitting around nationwide. In addition to that, there are close to 10% of homeowners that are delinquent on their mortgage payments currently. Lenders can’t be blamed for wanting to rid themselves of these toxic properties, and get them into the hands of investors at deep discounts. If the banks continue to hold onto these toxic assets that are going to cause a shortage of credit that they could otherwise give out to new home buyers, and loosen up some of the “credit crunch.”
If banks continue to give out more loans to purchase homes at discounted rates; This will do many things for the market. This will minimize the number of vacant and deteriorating homes and get them into the hands of paying homeowners once again. These properties could be used as investment properties and could be rented out to families or individuals looking to reside in a home. This will build consumer’s confidence once homes start to be in demand again; Home prices will level off and start to appreciate once more; These properties are great for buying now, and selling later on after it’s been rented for a while and has had a chance to appreciate.
Investors are often able to purchase these properties at an all time low. With the average foreclosed house prices at this moment, investors are able to get an average of $40,000-50,000 discounted of the purchase price. The only problem that might be posed for investors right now is that they will have to wait 3yrs before refinancing, or selling the property to cash out on the property’s equity.
Many homes in the hardest hit areas across the country are seeing their property value drop 30-40%. If you are able to buy and are looking for discounts there are all around. Until we have hit an equilibrium price in the market, the prices will continue to fall before it levels off.
In time the market will correct itself even if government does little or nothing to correct this mess we are currently in. The cheap properties will get bought, and supply and demand will get back in order for house prices to increase at about the normal rate of inflation; about 3-6% annually.
