Author

Bill Franks

Loan Modification Counselor

February 23, 2010

Life is unpredictable and circumstances often arise that can prevent you from making your mortgage payments.

I would like to take this opportunity to tell you a little about options available to help.  My mission is to inform homeowners of their options and exit strategies when faced with foreclosure. I would like to preserve the American dream of home ownership, but statistics have shown that homeowners facing foreclosure will wait until the end of the proceedings to take any course of action, unfortunately it maybe too late! Some   Homeowners have had more than their fair share of difficulties through this real depression. The true killer is the adjustable rate mortgage (ARM). Maybe this is all a big mistake and the payments you’ve been sending were rerouted or lost do to the fact your mortgage was sold unbeknown st to you. Whatever your dilemma the Investor that is the true Mortgage holder do not care what it feels like to choose between a mortgage payment or groceries. The Investor is interested in only one thing- money! Most of which is collected on a predatory note the Investor purchased from a Mortgage Broker Warehouse or Bank which are now serviced by a servicing company. These Indemnities are one thing and one thing only- Debt Collectors. I understand what it’s like to have continual phone calls from a Debt Collector, calls at home, calls at work and letters in the mailbox.  You want to save your home, you need to save your home but your lender is asking for money that you can’t come up with in the time allotted. You’re not asking for them to forgive the loan but you need help creating a payment plan that you can handle.  You just need someone on your side.

To view this entire article please click on the header above
Pathway to Loan Modification

How to stop Foreclosure with Loss Mitigation Program

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures.  They help foreclosure victims in default on their mortgage, to find alternatives to home foreclosure.  Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure.  US Housing Relief’s extensive experience and solid working relationships with mortgage lenders, allows us to help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender’s loss mitigation policies, our professional loss mitigation’s will negotiate with your lender to you the best possible solution to your home foreclosure problem.  We can help you save your home and credit history through a variety of loss mitigation options.

 1. LOAN MODIFICATION

 (FDIC Banks) (Mortgage servicing companies) (Government insured loans, FHA, VA, and Fannie Mae-Freddie Mac underwritten loans) (Participating Credit Unions)(Participating finance companies)  

A loan modification is the restructuring of a current mortgage note. With a loan modification you must apply with your loan servicing company, this may take weeks or months for the Investor to make any kind of proposal. The process is much less detailed than a true mortgage or refinance but the overall process is much similar minus some of the underlying factors such as an appraisal of the property. A modification can be

Underwritten in many different ways some include rate and balance reductions.  

2. VA LOAN MODIFICATION/REFUNDING

(Available of VA loans only) (Need at least 30 days to process)

A refunding is when the VA buys your loan from the lender.  Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider.  When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary.  If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate.

3. SHORT SALE-SHORT PAYOFF

(Short sale) (Pre-foreclosure sale) (Compromise of sale)

If you have suffered a long term financial hardship and are unable to maintain your loan or if you need to sell the property to avoid a default loss on the on the property, it is possible that the lender may be able to accommodate you with a short payoff. A qualified buyer is required. If this is an option you wish to pursue, you must inform the loss mitigation specialist assisting you immediately.  There may be tax ramifications associated with any short payoff or foreclosure; therefore, we recommend you contact your tax advisor for details.  Some states permit lenders to seed a deficiency judgment for the amount the payoff was discounted.  See your state’s foreclosure law for more information.  Check with an attorney for advice on your personal situation.

 4. DEED-IN-LIEU OF FORECLOSURE

If you have incurred a long term financial hardship and your house has been on the market (at fair market value) for at least 90 days, you may be eligible for a deed-in-lieu of foreclosure.  To be considered for this option, you must complete a financial package and provide a copy of your recent active listing agreement. There cannot be any additional clams or liens (other the mortgage) against the property.  If you are approved for a deed-in-lieu, you will be giving up all rights to the property and the property will be conveyed to your investor.  In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights. You may be asked to participate in a Short Payoff program before a deed-in-lieu of foreclosure is accepted.

 5. REPAYMENT PLAN

 If you have incurred a short term financial hardship and your loan is two or more months past due, your loss mitigation specialist will also consider submitting a request for a payment plan to your lender for approval.  Only after reviewing your financial situation will this option be considered.  All clients must be able to show that they can afford this plan in order to be eligible.

 6. SPECIAL FORBEARANCE

(FHA loans only) (Type I & II)

If you have incurred a short term financial hardship and your loan is 90 to 365 days past due, the loss mitigation specialist will also consider submitting a request for a special forbearance.  A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Typical approval can result in spreading the repayment over 12 to 18 months.  Type II can be utilized in an unemployment situation whereby the promise of future employment is present.  We have done VA loans that resulted 27 month repayment plans.

 7.  PARTIAL CLAIM

(FHA mortgages only) (Some Freddie Mac & Fannie Mae investor loans)

 The loss mitigation specialist may assist in requesting a partial claim if you qualify.  You may be eligible if your loan is 120 to 365 days past due. A partial claim results in placing your past due payments into a subordinate mortgage (2^nd mortgage) between you and the Secretary of Housing Urban Development.  The partial claim note will require you to start making payments when you pay off the first mortgage. There is no interest.  The partial claim can be for no more than 12 months of past due payments.

There is Help Free options

 Here are some of the places to educate yourself, learn from others who already have dealt through the trails and tribulations when faced with a house payment they could not a afford. Most blogs written by Homeowners have detailed solutions to the hurdles they faced in restructuring their mortgage loan.  Visit these site and learn from others who have encounter the arena you are about to enter.

_{www.loansafe.org}  -is a great place visit to obtain vital information.

www.ushousingrelief.org -Professional help available. Specializing in hard case work such as Business Owners and Homeowners who were declined when they applied.

http://www.financialstability.gov -Road to Stability-Impact-The latest news Reports & more.

 www.disasterhousing.gov -US Department of Housing and Urban Development-Talk to a Foreclosure avoidance Counselor-Contact HOPE NOW and more.

 www.makinghomeaffordable.gov  

ITEMS INVESTOR’S – BANKS – CREDIT UNIONS –

MORTGAGE COMPANY’S WILL NEED TO START THE PROCESS:

Application to apply

Qualifying hardship letter

Thirty day detailed expense list

2 current pay stubs

2 current checking account statements

Fix income award letter declaring benefits paid

Other income documentation

2007 & 2008 W2 (If Self Employed 2 Years 1009)

2007 & 2008 Tax Returns all pages (signed and dated)

4056T tax form

Three month Profit loss statement (If Self employed)

Homeowners Insurance Information

Property tax statement

remember the underwriting guidelines to qualify for a loan modification are not revealed by any mortgage company. The stats show only 1 out 10 people who apply receive a true loan modification. To increase your over result it is recommended that you hire a qualified professional to prepare your application  prior to any submission of financial information to your mortgage company this way if ratio correction are required to qualify or other areas of concern need to be addressed they are corrected prior to submission. Most homeowners think HUD or the mortgage company is there to help them qualify? WELL THEY ARE NOT, Free agency’s and Mortgage company’s  just help you submit your application and required verifications and if  the application does not meet the underwriting guidelines you receive a decline. If your application rates poorly then the rate reduction may not happen or may have been reduced to lessor amount.  The end result is does the investor foreclose and reinvest outside the mortgage market or does the investor consider the home owner a good credit risk and keep them on the books? You are applying for a mortgage loan how does someone outside of  mortgage loans know how to originate a mortgage loan that will meet the underwriting guidelines? How would you? The truth to matter is even experienced loan officers only learn the modification business through countless submissions, They are not easy the system is so unfair and structured for the Banks not the homeowners in need of  real assistance. What happened to the bail out it my opinion it never happened!  The original Obama proposal was once again rewritten by the legislation system. Like the Senator of Indiana said the banks own this town. Enough rambling .  This is the money on the line do it right the first time and for those who now know this to be true because you tried to apply yourself and got declined you may have options . 

 Money on the Line 

$100 reduction in the monthly mortgage  is $36,000 savings over the term, $500 reduction in the monthly mortgage is $180,000 savings over the term.

Principle balance reduction reduces what you owe.

Getting denied is 0 savings over the term.

Qualifying for a forbearance saves your home.

Short sale avoids a nasty foreclosure on your credit and having to repay the deficiency.

Other exit strategies by time to get back on your feet.

Need my assistance ?  

 visit www.ushousingrelief.org

or email bIll@ushousingrelief.org

1-888-838-1678

Typically asked questions:
What is a forensic loan audit?
What is the benefit to have one of these audits done?
What could happen to your mortgage company if found in violation of law or a congressional act?
How do you present the audit findings to your mortgage company?

A Forensic loan audit is an audit that finds violations of State law or Federal congressional acts which are supervisory authorities that monitor for violations of said acts all which have different directives.
Such as
RESPA-“Real Estate Settlement Procedures Act
TILA-“Truth-in-Lending Act
HOPEA-Home Owner and Equity Protection Act
HMDA- Home Mortgage Disclosure Act
GLB-Gramm-Leach-Billey Act
FTC-Federal Trade Commission Act
FHA-Fair Housing ACT
ECOA-Equal Credit Opportunity Act
FACTA-Fair and Accurate Reporting Act
FCRA-Fair Credit Reporting Act

Violations can happen from the start of the loan process a good example is when the application is taking from the borrower and the Good Faith Estimate is not delivered with in three business days of the application “this is the rule if the application is taken by phone” if the application is taking in person the Loan Originator must disclose the good faith right then and their. Not supplying a GFE in the time outlined in the directive is a RESPA violation and could result in a very bad day for your mortgage company. Most violation can be up to $10,000 dollars Plus possible criminal prosecution if the criminal activity is found.

The audit documents include your original mortgage loan transcripts from the initial Application all the way to the mortgage contract prepared by your lender which you execute and sign at the title company.

Approximately 75-83% of U.S. residential mortgage loan documents and transactions have Federal, state and local violations of law, errors and omissions.

Forensic Loan audits use legal compliance partners; Audits use a technology and online legal mortgage compliance engine “special software.

Forensic loan audits are best performed by professional organization with knowledge to conduct such an audit usually special software is used to evaluate the original loan documentation the audit is best conducted by a mortgage attorney. Top notch Loan Modification Companies have retained mortgage attorneys to supply them with forenizic loan audits when necessary.

With all that said Mortgage companies take Forensic Loan audits very seriously and forward them directly to their legal departments to get an Idea of the severity of the violation or violation.  “Some can be considerably worse than others such as ethnic or racial discrimination this is a direct violation of HOPEA “Home Owner and Equity Protection Act.

Your audit can provide an objective basis for equitable discussions and facilitate your loan modification negotiations. In other words your mortgage company could be facing penalties sanctions, associated with the violations plus a big law suit from you.

How do you present your findings to your mortgage company?
Well this is a complicated question and actually has many correct answers. Much will depend on the severity of the violation and what you are trying to achieve in your negation with your mortgage company.

My personal opinion is that you use the audit lightly at first since the negotiator can be easily freaked out and clam up.

Example:
My Client is very concerned about the violations that the forensic audit has found in the report and would like the Mortgage company and the negoator handling his or hers loan modification to understand that they just want a payment they can afford with a fixed rate that’s all nothing more nothing less, they want to be able to pay as agreed if granted a loan restructuring. They would hope there is a way to get their payment to
$XXXXX

Here is an example of the basic Forensic loan audit for your review. I hope this article has answered some questions. You can reach me anytime toll free at 1-866-266-2151 or Bill@UShousingrelief.org I will more than happy help in anyway possible.

Sincerely,

Adam Durham
Senior Loan Modification Specialist
US Housing Relief LLC

Most lenders were aware that a very high percentage of the adjustable rate mortgage loans funded between 2004 thru 2007 would soon be worthless, but it was a price that had to be paid if these greedy banks were to expand and grow. The Feds had these quasi-governmental companies called Freddie Mac and Fannie Mae that would buy these mortgages anyway. Certainly a government backed company could not fail…could it? These loans were then bundled up and sold to Freddie Mac and Fannie Mae who held them for a time and then re-packaged them again to sell to other institutions and banks, which were understandably eager to reap the benefit of potentially rising interest rates from the adjustable rate loans. The banks and investment firms certainly thought the Fannie and Freddie loan bundles were sound since they came from governmental agencies. The expectation was that these loans would soon be paid off when rising home values led borrowers to “tap” their equity through a re-finance or sell to move up to a nicer home. Those drastic increases in real estate values didn’t happen, did they? No Just the opposite.

The whole reason that real estate prices in many areas escalated so quickly was because there was such an incredible amount of money available. Now that the money is not readily available we see the complete opposite. Home prices are decreasing on a daily basis. In some areas home values have dropped over 75% since 2007.

Today this government created crisis is being peddled to the American public. We have given 11.5 trillion dollars in bailout funds. For those of you that don’t know how much a trillion dollars is. It would take you 192 years to count to a trillion.

Anytime government gets involved in anything other than what it was Constitutionally set up to do, the result is bureaucracy, failure, poor performance, and shoddy results that are easily outpaced by the private sector. And they want to take over health care? They can’t even manage the VA, let alone all the hospitals in the country. They semi-took over education and look at the mess we’re in. Most kids can’t even find the US on a globe.

So why isn’t this story front page news? Why aren’t the big TV networks leading off the evening news with stories about how the Feds screwed up yet again? Come on, are you kidding me? Do you really expect the media to blame this mess on the biggest clients they have? No they say it was caused by the shady mortgage brokers and dead beat customers. They tell you the complete opposite from the truth. They tell you to trust your investor or banks and most certainly our Government.

Do you realize that nearly every retirement account In the United States lost more then 40% of its value in 2008 and people still keep there hard earned money in the same account? It is one in the same with home mortgages. People still have faith in there bank or mortgage company. The same company that is trying to take the roof over there head away. When are the American people going to wake up?

I want to end this blog with a quick wake up call! When you’re wondering what to do to save your home from foreclosure take this information to heart. One of the Governments top non-profit organizations who are referred directly by HUD to help you save your home was the same company who persuaded banks and investors into making these adjustable rate loans in the first place. Acorn was the largest community organizations pressuring banks to make these adjustable rate loans. They have also been convicted of embezzlement, tax fraud, voter fraud, bank fraud & even miss use of government grants. This is all public information and can be found anywhere online and still the American people put there livelihoods into the hands of these criminals.

It’s going to get much worse. Come to find out, Lenders nationwide have a vast “shadow inventory” of foreclosed homes that banks are holding off the market could wreak havoc with the already battered real estate sector, industry observers say.

Lenders\banks are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, These Lenders & banks will unload these foreclosed homes at fire-sale prices. This is a major factor in future declining values. It almost appears lenders and banks are driving home values down.

There are 600,000 properties nationwide that banks have foreclosed on but not put on the market. This is going to be disastrous when the banks suddenly flood the market with these foreclosed properties. Every Home owner in America will see greater depreciation in the months and years to come. This is just the beginning of homes being foreclosed. Expert statistics show we are less the an third of the way through our foreclosure catastrophe.

The “Making Home Affordable Plan” was created to help two groups of homeowners:

• People who are making their mortgage payments, but were unable to qualify for refinancing in the past because they owe more on their house than it’s currently worth.
• People who are at risk for imminent foreclosure.

Making Home Affordable Plan One:  You owe more on your home than it’s worth.

If you owe more than your home is worth (also known as negative equity or “being underwater”), the new Obama housing plan offers a special refinancing program known as the Making Home Affordable Refinance Plan. (This plan is called DU Refi Plus™ at Fannie Mae and Relief RefinanceSM at Freddie Mac.)

The Making Home Affordable Plan will allow more than 5 million people who didn’t qualify for a mortgage in the past to refinance.

To qualify:

• You need to have a Fannie Mae or Freddie Mac mortgage.
• You need to have satisfactory credit.
• You can now have up to 105% loan-to-value (meaning you can now owe as much as 105% of your home’s current value).
• You can’t refinance for more than the amount of the mortgage (no cash out).
• If your current loan doesn’t have PMI (Private Mortgage Insurance), then PMI will NOT be required on the new loan.
• This program differs from a “regular refi” by benefiting:
• People who cannot qualify for a traditional refi because they do not have enough equity.
• People who would have had to pay Private Mortgage Insurance with a traditional refi.

 If you are having problems making your payments and are at risk of foreclosure, the plan provides a special loan modification program for troubled homeowners.

A loan modification is exactly what it sounds like – a lender modifies the terms of your original loan, typically to reduce your interest rate or payment. In this program, your mortgage rate would be reduced for five years.

It’s important to note that the loan modification program in this plan is intended to help keep the most troubled homeowners in their homes. It is not for people who can currently pay their mortgages. The new requirements are very specific.

 To qualify for a loan modification under the Making Home Affordable Plan, you will have to:

• Prove in writing that you have a serious hardship that is preventing you from making your mortgage payment, or that your income has dropped significantly, or your rate or payment increased drastically.
• Document all of your personal expenses, income and assets, to prove that you are unable to pay your mortgage.
• Depending on your situation, you may be required to receive financial counseling as a condition of participating in the program.

A few other things to know about Making Home Affordable Plan

If you’re in a situation where you are in default or at risk of default, The Making Home Affordable Plan may help you keep your home by:

• Reducing your interest rate (as low as 2%).
• Extending the term of your loan up to 40 years.
• Allowing you to forbear principal.

Most lenders were aware that a very high percentage of the adjustable rate mortgage loans funded between 2004 thru 2007 would soon be worthless, but it was a price that had to be paid if these greedy banks were to expand and grow. The Feds had these quasi-governmental companies called Freddie Mac and Fannie Mae that would buy these mortgages anyway. Certainly a government backed company could not fail…could it? These loans were then bundled up and sold to Freddie Mac and Fannie Mae who held them for a time and then re-packaged them again to sell to other institutions and banks, which were understandably eager to reap the benefit of potentially rising interest rates from the adjustable rate loans. The banks and investment firms certainly thought the Fannie and Freddie loan bundles were sound since they came from governmental agencies. The expectation was that these loans would soon be paid off when rising home values led borrowers to “tap” their equity through a re-finance or sell to move up to a nicer home. Those drastic increases in real estate values didn’t happen, did they? No Just the opposite.

The whole reason that real estate prices in many areas escalated so quickly was because there was such an incredible amount of money available. Now that the money is not readily available we see the complete opposite. Home prices are decreasing on a daily basis. In some areas home values have dropped over 75% since 2007.

Today this government created crisis is being peddled to the American public. We have given 11.5 trillion dollars in bailout funds. For those of you that don’t know how much a trillion dollars is. It would take you 192 years to count to a trillion.

Anytime government gets involved in anything other than what it was Constitutionally set up to do, the result is bureaucracy, failure, poor performance, and shoddy results that are easily outpaced by the private sector. And they want to take over health care? They can’t even manage the VA, let alone all the hospitals in the country. They semi-took over education and look at the mess we’re in. Most kids can’t even find the US on a globe.

So why isn’t this story front page news? Why aren’t the big TV networks leading off the evening news with stories about how the Feds screwed up yet again? Come on, are you kidding me? Do you really expect the media to blame this mess on the biggest clients they have? No they say it was caused by the shady mortgage brokers and dead beat customers. They tell you the complete opposite from the truth. They tell you to trust your investor or banks and most certainly our Government.

Do you realize that nearly every retirement account In the United States lost more then 40% of its value in 2008 and people still keep there hard earned money in the same account? It is one in the same with home mortgages. People still have faith in there bank or mortgage company. The same company that is trying to take the roof over there head away. When are the American people going to wake up?
I want to end this blog with a quick wake up call! When you’re wondering what to do to save your home from foreclosure take this information to heart. One of the Governments top non-profit organizations who are referred directly by HUD to help you save your home was the same company who persuaded banks and investors into making these adjustable rate loans in the first place. Acorn was the largest community organizations pressuring banks to make these adjustable rate loans. They have also been convicted of embezzlement, tax fraud, voter fraud, bank fraud & even miss use of government grants. This is all public information and can be found anywhere online and still the American people put there livelihoods into the hands of these criminals.