The professional loan modification experts at www.adjustMYLOAN.com just wanted to take a second and thank the brave men and women in the Armed Forces that tirelessly defend our great country. Our owner Cody Sperber was a member of the United States Navy (honorable discharge) and understands the hard work and dedication each member of our military (and their families) go through each and every day. So to the past, present, and future soldiers of our great country we want to say thank you and happy Memorial Day 2009.
Yes, we recognize the importance of sharing all the great information we put out there about loan modifications. From news to do-it-yourself advice, we understand that there are many homeowners who want to learn as much as they can before trying to modify their own home loan(s). The website and loan modification blog from AML has so much great information, we just had to share it with the twitterers of the world! If you are interested in receiving FREE loan modification tips and tricks, just follow us on twitter.com by clicking on the big graphic up above or by CLICKING HERE. We look forward to sharing our insight with you!
This is awesome. I found this guys drawings on Vimeo and his explanation of our current credit crisis is right on the money. We love his use of minimalist drawings to explain how our financial system imploded like it did! His name is Jonathan Jarvis and his video’s are as cool as they come.
Things are really moving now that SUPERBAMA is in control! That’s right…the Making Homes Affordableloan modificationplan is already being expanded to include second mortgages and to push homeowners who are really upside down towards the newly revamped Hope For Homeowners program. One of the biggest roadblocks the Making Homes Affordable modification plan had was the fact that first lien holders were hesitant to modify their mortgage when the second lien holder got to leave their loans intact. Now second lien holders are incentivized to modify their mortgages down to 1% and in some cases wipe them out completely. The loan modification experts at AdjustMyLoan.com have been modifying both first and second mortgages long before the government subsidies have been around, but we believe this will only make things better for homeowners in the long run. From the first mention of a government assisted modification program our main concern was for those homeowners whose house values have declined dramatically (like those in Arizona). An interest rate drop or term extension only postpones any immediate threats of missing payments or foreclosure and does nothing for those that want or need to sell their homes in the near future. With the program now including second lien holders, there is a chance for a real solution to America’s housing problem! Below is an article from CNNMoney.com about the loan modification plan extension.
Obama expands foreclosure fix
Two steps: Second liens now covered by modification program; servicers must offer eligible borrowers principal reduction under Hope for Homeowners.
NEW YORK (CNNMoney.com) — The Obama administration said Tuesday it is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program.
Announced with great fanfare in mid-February, the president’s $75 billion program has gotten off to a slow start. Loan servicers only recently started taking applications and many delinquent borrowers have complained about being left in the cold because their home values have dropped or they’ve lost their jobs.
The administration is seeking to address some of the concerns by tweaking the original modification plan, which calls for adjusting eligible borrowers’ loans so monthly payments are no more than 31% of pre-tax income.
Servicers covering 75% of the nation’s mortgages are now participating in the program, which also allows some homeowners with little or no equity to refinance their mortgages, a senior administration official said Tuesday. Together, the plans are expected to help up to 9 million avoid foreclosure.
Second mortgage roadblock
During the housing frenzy, many borrowers obtained second mortgages to allow them to put little or nothing down when buying a home. Up to half of at-risk borrowers have second liens, according to the administration.
These loans have complicated the modification process. For one thing, they add to troubled homeowners’ debt levels. Also, mortgage investors have balked at reducing payments on first mortgages when the second loan was left intact.
Under the administration’s new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor.
Servicers will be paid $500 for each modification and an additional $250 annually for three years if the borrower stays current. Borrowers can receive up to $250 per year for five years to pay down their first mortgage.
Investors can also receive a payment in exchange for extinguishing the second lien. They would receive 3 cents on the dollar for loans more than 180 days delinquent and between 4 cents and 12 cents for less delinquent loans, depending on the borrowers’ debt levels.
Servicers who join the new program must modify secondloans when a borrower’s first mortgage is adjusted. It will likely take a month to implement, but it should not slow down the modifications of primary mortgages, the administration said.
“By bringing both the first lien and second lien program together, we can reduce monthly payments for borrowers and make it much more likely that they can stay in their homes,” a senior administration official said.
Hope for Homeowners option
Also Tuesday, the administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.
Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.
Servicers had balked at participating in the Hope program because it required they reduce the mortgage principal balance to 90% of a home’s current value.
Hope for Homeowners, which began in October, is being revamped in Congress. Servicers would have to reduce the principal to 93% of the home’s value. The change would also reduce the program’s high fees, which turned off many troubled borrowers.
As an incentive to participate, servicers will be paid $2,500 for each refinancing, while lenders who originate the new loans will receive up to $1,000 a year for three years, as long as the loan remains current.
Separately, however, another pillar of the president’s plan appears to be headed for defeat this week. The Senate is not expected to pass legislation allowing bankruptcy judges to modify mortgages. The administration had sought this change to pressure servicers to modify loans before borrowers declare bankruptcy.
If your interested in a home loan modification, visit www.AdjustMyLoan.com today and get a FREE CONSULTATION.
Arizona Man Pleads Guilty To Loan Modification Scam
Bobby Herrera, a local Glendale man who was charged with taking money form homeowners in foreclosure with false promises of getting them an Arizona loan modification plead guilty April 15th and faces five years in prison as well as a possible $73,000 in restitution to his victims. This is just another example of how important it is to research the person or company that is promising to help you modify your mortgage. These mortgage con artists say all the right things so it is so important to see where they work. Meet their team and ask for testimonials or references. Loosing your home to foreclosure is much too important to just leave things up to hope! Take back control of your situation by choosing a loan modification company that has the proof they can get the job done. Below is a press release from Arizona’s Attorney General Terry Goddard (which all of us at www.AdjustMyLoan.com support) about this scam. Bobby Herrera is scheduled to be sentenced May 13th and we will keep you up-to-date on the results as soon as they come out.
For Immediate Release
Mortgage Fraud Artist who Victimized 47 Valley Homeowners Pleads Guilty
(Phoenix, Ariz. - April 15, 2009) Attorney General Terry Goddard today announced that Bobby John Herrera, 33, of Glendale, has pleaded guilty to one count of fraudulent schemes and artifices, a Class 2 felony, in connection with a mortgage loan “assistance” scam he orchestrated that victimized 47 Valley homeowners.
In December 2008, Herrera was arrested by Surprise and Peoria police in connection with the scheme. He pleaded guilty yesterday in Maricopa County Superior Court. He is scheduled to be sentenced on May 13 and faces five years in prison as well as $73,000 in restitution to victims.
According to investigators, Herrera solicited struggling homeowners with fraudulent claims that he could modify mortgage terms or provide other assistance to help them prevent foreclosure. Herrera allegedly claimed to have “connections” and expertise negotiating with mortgage lenders to reduce consumers’ monthly payments and prevent foreclosure.
In exchange for the services he claimed to provide, investigators said Herrera often charged the victims upfront fees of $1,245. Herrera is alleged to have not provided any such mortgage loan modification or foreclosure relief assistance, using the money instead for personal expenses.
“Herrera was a wolf in sheep’s clothing. He preyed on struggling homeowners at a time when they could have been getting real help to save their homes and their families’ economic stability,” Goddard said. “I urge all homeowners who feel they are at risk of foreclosure to reject offers from costly ‘loan assistance’ businesses and get help from a HUD certified housing counselor. These counselors can be trusted to look out for your best interests and they won’t cost you a dime.”
The Attorney Generals Office began receiving complaints about Herrera on December 3, 2008. In response to concerns raised in complaints, the Office initiated a criminal investigation into Herrera’s activities. The criminal investigation into this case involved the Arizona Attorney Generals Office, Surprise Police Department and Peoria Police Department.
The Arizona loan modification experts at adjustMYLOAN.com have helped a couple of the victims of this loan modification scam artist so far. We were able to put some of his victims into decent modifications just in time to stop the foreclosure auction from taking their houses. We are not saying this to brag…just to let you know that there is such a thing as an ethical loan modification company out there that actually does the work they are paid to do. We understand how much time, effort, and skill is needed to navigate a complete loan modification from start to finish and also understand that most people don’t have the time to spend fighting it out with their lenders. Our loan modification service allows you to focus on your family and your job, while the loan modification is left to the professionals. We offer free consultations and never charge any expensive upfront fee’s for our service. Give us a call at 1-800-557-7573 and shop us compared to our competition. We believe you will be relieved once you get to know our professional staff.
Wells Fargo Loan Modification, Loss Mitigation Negotiation Service
FREE CONSULTATION AND NO UPFRONT FEE’S
FOR IMMEDIATE RELEASE
AdjustMyLoan.com Has Streamlined the Loan Modification Process for Wells Fargo Customers
AdjustMyLoan.com, an attorney based loan modification company based in Phoenix, Arizona, has been successfully processing loan modification requests for Wells Fargo customers since April of 2008. Going in line with President Obama’s Homeowner Affordability and Stability Plan introduced March 4, 2009, AdjustMyLoan.com and Wells Fargo have now developed and implemented a fast-track process toward home-centered financial security with AdjustMyLoan.com’s Wells Fargo Loan Modification Program.
For Wells Fargo borrowers who are currently delinquent or struggling to keep current, AdjustMyLoan.com has developed a specialized service to provide sound solutions to distressed Wells Fargo mortgages. By offering a combination of adjustments to the interest rate, principal balance, arrearages, and term of an existing mortgage loan, AdjustMyLoan.com and Wells Fargo aim to bring loans current and insure borrowers can afford their mortgage payments for the life of the loan.
Loan Modifications are the preferred method for dealing with the housing crisis. Our streamlined process is designed to expedite the loan modification process with Wells Fargo and our professional loan modification negotiators handle the entire loan mod process from start to finish so you can focus on making money and spending time with your family! AdjustMyLoan.com now offers an exclusive comprehensive plan to help Wells Fargo homeowners save their homes from foreclosure.
Homeowners Will Need To Gather The Following:
Bank Correspondence / Foreclosure Notices
Hardship Letter Explaining Your Circumstances And Why You Must Modify Your Loan (must be signed by borrower)
2 Most Recent Mortgage Statements For Each Loan
2 Months Bank Statements For All Borrowers (12 Months If Self Employed)
2 Months Pay-Stubs For All Borrowers
2 Years Tax Returns Including W2’s, 1099’s And All Schedules For All Borrowers
Insurance Information (agent name, company, address, phone, email and policy number)
Any Documents To Verify Hardship (Death Certificate, Medical Bills, Divorce Paperwork ETC)
Then You Need To:
Contact a loan modification expert at AdjustMyLoan.com to pre-qualify for one of our streamlined programs. Our qualification takes only a few minutes and once qualified, rest assured AML is going to fight relentlessly to get you the best loan terms possible.
For more comprehensive information about options available to homeowners facing financial difficulties, please visit AdjustMyLoan.com and check out the loan mod learning center and blog post. There you will find the most up-to-date information on Wells Fargo’s many repayment and loan modification options and the latest financial news and tips.
Once again AdjustMyLoan.com gets quoted in the news! This story is a discussion of what percentage of a homeowners income should go towards a mortgage payment! This is a direct reaction to Obama’s “Homeowner Affordability and Stability Plan” previewed last week with details coming out March 4th, 2009. www.AdjustMyLoan.com is a professional Loan Modification Company that fights for homeowners to re-negotiate their current loan terms in order to lower their monthly mortgage payment. To us, the lower the mortgage payment to income ratio the better! What are your thoughts?
February 26th, 2009
Article from AZCentral.com and on the front page of the Arizona republic
WHAT PERCENTAGE OF INCOME SHOULD BE SPENT ON MORTGAGE PAYMENTS?
Under its new mortgage- relief plan, the Obama administration is staking a claim that most homeowners facing foreclosure should be able to pay 31 percent of their gross income for a mortgage.
Not 50 percent or not 60 percent, as is the case with many strapped homeowners.
But 31 percent of income still is a hefty number. Historically, borrowers’ mortgage payment limit was set at about 25 percent of their gross income before deductions for taxes and other subtractions.
With car payments, credit-card debt and everyday expenses, Phoenix-area mortgage brokers, bankers and others say that 31 percent still is too high for many homeowners.
“They would wind right back in default,” said Paul Klimke, president of the Central Arizona chapter of the Arizona Association of Mortgage Brokers.
Over the years, mortgage guidelines have been relaxed to enable more people to qualify for loans. In a time of rising prices, buyer demand and low interest rates, the Phoenix market allowed for refinancing, quick sales and home-equity lines of credit to help stretched consumers.
No more.
As sales slowed, home prices plummeted and foreclosures rose, many existing owners have been trapped. Their houses are worth much less than their loans, and their mortgage payments are killing them financially.
Experts predict a new wave of foreclosures over the year due to job losses and adjustable mortgages that will reset to higher rates and push up monthly payments.
Librada Martinez hopes the mortgage relief promised by the Obama administration will help her.
She makes $40,000 per year and has a $200,000 mortgage on a two-bedroom southwest Phoenix home that she bought for $180,000 in 2005. Her $1,400 mortgage payment is 47 percent of her gross income and 60 percent of her take-home pay. She was able to make the payments until an illness created unexpected medical bills.
“I tried to sell the house or get a roommate,” she said, adding that she finally just stopped making payments.
Martinez is hopeful she will be able to restructure her loan under the Obama plan but is concerned that homes in her neighborhood similar to hers now are selling for $70,000.
“I want to stay in my home - it’s perfect for me,” Martinez said. “But I don’t want to make payments on a $200,000 loan when my house is worth $70,000.”
The program announced by President Barack Obama in Mesa on Feb. 18 will offer financial incentives to lenders to restructure loan payments so that they are no more than 38 percent of the borrower’s income. More details about the plan are expected next Wednesday.
According to details already released, lenders would receive $1,000 up front for each modified loan and more down the road if the borrower stays current.
The government would use up to $75 billion in economic-stimulus funds to match additional loan modifications from the lender to bring down the payment from 38 percent to 31 percent.
For a household with gross annual income of $100,000, the monthly payment at 31 percent would be about $2,600. That’s about 50 percent of take-home pay after basic federal withholding. Add utility payments, food, health insurance, car payments and other consumer debt and there is likely very little left, said Joann Hauger, executive director of Community Housing Resources of Arizona. It is a non-profit organization that provides one-on-one mortgage default and pre-purchase counseling.
At this time, 38 percent is thought of as the upper limit for qualifying, with many households paying significantly more. Thirty-one percent is considered the upper limit of conservative guidelines for loan underwriting.
Before the boom, under traditional approval ratios for loan underwriting, 28 percent of gross income was considered the maximum for the mortgage payment and 38 percent for all debts combined.
Klimke noted that most of the people now in trouble have mortgage payments alone that are more than 38 percent of their gross income, sometimes much more.
“That’s what got us in trouble,” Klimke said.
Jay Butler, director of realty studies at Arizona State University, also believes 38 percent is too high in many cases.
“I’m curious what government will use as a definition of income and what the ratio would be for total debt,” he said.
Many of the people whose mortgages are in trouble have a lot of other debt and couldn’t afford the payments even if they were reduced to 31 percent of their income, counselors said.
Cody Sperber, a partner in AdjustMyLoan.com, a Phoenix firm that helps homeowners renegotiate loan terms, said that many of his clients are making mortgage payments that are 55 percent to 60 percent of their incomes.
Sperber said he has clients whose total debt payments are more than 90 percent of their income and owe $200,000 more than their homes are worth.
Hauger said that the homeowner bailout plan will be a challenge in Arizona because of the large number of lost jobs on top of the significant drop in home values - 34 percent in the fourth quarter alone, according to the 20-city Case-Shiller Home Price Index.
“There is a tremendous amount of consumer debt that could leave people unable to make payments even at a lower amount,” she said.
“In reality, there are an awful lot of people that no matter what, their homes won’t be saved.”
Below is an Press Release from the Fed’s concerning the upcoming changes to Regulation Z (Truth-In-Lending Act) also known as TILA. Unfortunately many lenders in the past took advantage of the market and made predatory loans to homeowners who are now in serious default. These upcoming changes will prevent further predatory loans from being originated but unfortunately not help those already affected. The professional Loan Modification Experts at AdjustMyLoan.com help homeowners who believe they were a victim of Predatory Lending to uncover these violations through a Forensic Loan Audit on their original loan paperwork and use these findings to negotiate new loan terms with their lenders. If you believe you were a victim, call our Loan Modification specialists at 1-800-557-7573 today.
Regulation Z (TILA) Press Release From The Feds
The Federal Reserve Board on Monday approved a final rule for home mortgage loans to better protect consumers and facilitate responsible lending. The rule prohibits unfair, abusive or deceptive home mortgage lending practices and restricts certain other mortgage practices. The final rule also establishes advertising standards and requires certain mortgage disclosures to be given to consumers earlier in the transaction.
The final rule, which amends Regulation Z (Truth in Lending) and was adopted under the Home Ownership and Equity Protection Act (HOEPA), largely follows a proposal released by the Board in December 2007, with enhancements that address ensuing public comments, consumer testing, and further analysis.
“The proposed final rules are intended to protect consumers from unfair or deceptive acts and practices in mortgage lending, while keeping credit available to qualified borrowers and supporting sustainable homeownership,” said Federal Reserve Chairman Ben S. Bernanke. “Importantly, the new rules will apply to all mortgage lenders, not just those supervised and examined by the Federal Reserve. Besides offering broader protection for consumers, a uniform set of rules will level the playing field for lenders and increase competition in the mortgage market, to the ultimate benefit of borrowers,” the Chairman said.
The final rule adds four key protections for a newly defined category of “higher-priced mortgage loans” secured by a consumer’s principal dwelling. For loans in this category, these protections will:
Prohibit a lender from making a loan without regard to borrowers’ ability to repay the loan from income and assets other than the home’s value. A lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan. To show that a lender violated this prohibition, a borrower does not need to demonstrate that it is part of a “pattern or practice.”
Require creditors to verify the income and assets they rely upon to determine repayment ability.
Ban any prepayment penalty if the payment can change in the initial four years. For other higher-priced loans, a prepayment penalty period cannot last for more than two years. This rule is substantially more restrictive than originally proposed.
Require creditors to establish escrow accounts for property taxes and homeowner’s insurance for all first-lien mortgage loans.
“These changes have made for better rules that will go far in protecting consumers from unfair practices and restoring confidence in our mortgage system,” said Governor Randall S. Kroszner.
In addition to the rules governing higher-priced loans, the rules adopt the following protections for loans secured by a consumer’s principal dwelling, regardless of whether the loan is higher-priced:
Creditors and mortgage brokers are prohibited from coercing a real estate appraiser to misstate a home’s value.
Companies that service mortgage loans are prohibited from engaging in certain practices, such as pyramiding late fees. In addition, servicers are required to credit consumers’ loan payments as of the date of receipt and provide a payoff statement within a reasonable time of request.
Creditors must provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for any mortgage loan secured by a consumer’s principal dwelling, such as a home improvement loan or a loan to refinance an existing loan. Currently, early cost estimates are only required for home-purchase loans. Consumers cannot be charged any fee until after they receive the early disclosures, except a reasonable fee for obtaining the consumer’s credit history.
For all mortgages, the rule also sets additional advertising standards. Advertising rules now require additional information about rates, monthly payments, and other loan features. The final rule bans seven deceptive or misleading advertising practices, including representing that a rate or payment is “fixed” when it can change.
The rule’s definition of “higher-priced mortgage loans” will capture virtually all loans in the subprime market, but generally exclude loans in the prime market. To provide an index, the Federal Reserve Board will publish the “average prime offer rate,” based on a survey currently published by Freddie Mac. A loan is higher-priced if it is a first-lien mortgage and has an annual percentage rate that is 1.5 percentage points or more above this index, or 3.5 percentage points if it is a subordinate-lien mortgage. This definition overcomes certain technical problems with the original proposal, but the expected market coverage is similar.
One element of the original proposal has been withdrawn. The Federal Reserve Board had proposed for public comment certain requirements pertaining to so-called “yield-spread premiums.” During the intervening period, the Board engaged in consumer testing that cast significant doubt on the effectiveness of the proposed rule. As part of its ongoing review of closed-end loan rules under Regulation Z, however, the Board will consider alternative approaches.
In finalizing the rule, the Board carefully considered information obtained from testimony, public hearings, consumer testing, and over 4,500 comment letters submitted during the comment period. “Listening carefully to the commenters, collecting and analyzing data, and undertaking consumer testing, has led to more effective and improved final rules,” Governor Kroszner said.
The new rules take effect on October 1, 2009. The single exception is the escrow requirement, which will be phased in during 2010 to allow lenders to establish new systems as needed.
In a related move, the Board is publishing for public comment a proposal to revise the definition of “higher-priced mortgage loan” under Regulation C (Home Mortgage Disclosure), which requires lenders to report price information for such loans, to conform to the definition the Board is adopting under Regulation Z.
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in
their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10.What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to month, and
· payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a loan modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years an have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from www.AdjustMyLoan.com visit their website or call their toll free number 1-800-557-7573. They do not charge upfront fee’s for their loan modification program.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks.
If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or www.AdjustMyLoan.com to see if you can participate in the program. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13.What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes
· information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other
sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to month, and
· payments on other loans such as student loans and car loans.
14.My loan is scheduled for foreclosure soon. What should I do?
President Obama In Mesa, Arizona To Unveil His Administrations Foreclosure Plan
President Obama was in Mesa, Arizona on Wednesday to discuss an aggressive “Stop Foreclosure Plan” his administration plans to put in place over the next few weeks. The plan essentially was broken down into two major parts with the finer details to be disclosed within two weeks.
The first program is to help 4-5 million struggling home owners with loans owned or guaranteed by Fannie Mae or Freddie Mac to help them refinance. AdjustMyLoan.com interpreted this as a way for upside down homeowners why were “playing by the rules” as Obama mentioned to get a guaranteed refinance to a set interest rate.
Does this mean homeowners who qualify for this solution will not need an appraisal? Are they going to refinance these homeowners to todays values or just reset the interest rate? Also, who is to set the interest rate? A government agency?
The second program is a Loan Modification Plan with government subsidies to lenders to reduce their monthly interest payments. Finally someone is speaking our language! Below are some bullet point how the plan will work:
Lenders who participate will be responsible for bringing down interest rates or doing principal balance reductions so the monthly mortgage payment is no more than 38% of pre-tax income.
After that the government would match the amount reduced by the lender to bring the payments down to 31% of their pre-tax income.
$1000 incentive for servicing agents (who collect fees for refinanced or delinquent mortgages) to work with qualified borrowers to modify loans. They will get $1000 for each loan they modify plus another $1000 per year for each year that homeowner remains current on their modified loan!
Homeowners who recieve this Loan Modification will recieve $1000 a year for five years off of the principal amount owed as long as they stay current! (HUGE)
Government money will be used to help homeowners avoid default all together by giving a $500 incentive to lenders and $1500 incentive to homeowners if a loan gets modified before the homeowner goes into default.
The final part of the plan would allow bankruptcy judges to “Cram Down” primary residences and complete forced loan modifications if a homeowners qualifies for bankruptcy protection. This would allow judges to lower interest rates, extend out the length of the loan, and reduce the principal amount owed (cram down) on the mortgage! (HUGE)
Currently homeowners who owe more than 80% of their homes worth have a difficulty refinancing or selling in today’s market. This plan should help about 9 million homeowners nationwide and cost about $75 billion dollars but will be well worth it if implemented correctly.
AdjustMyLoan.com is a national Loan Modification Company based out of Phoenix, Arizona that specializes in loan modifications and forbearance agreements. Our loan modification experts audit, package, propose, and negotiate loan modifications on our clients behalf. We offer FREE LOAN MODIFICATION CONSULTATIONS and never charge an upfront fee for our service! Call the loan modification experts at AdjustMyLoan.com today and get the professional help you deserve.
