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?
14. Home Loan Services, Inc. (d/b/a First Franklin Loan Services & NationPoint Loan Services)
800-500-5022
https://www.viewmyloan.com , www.nationpoint.com
Above are the majority of major lenders we are negotiating Loan Modifications with. As more and more lenders realize that Loan Modifications are the solution to their deepening default rate, we are able to help more and more homeowners avoid foreclosure. Even if you do not see your lender’s name on this list, more than likely we have worked with them and can help you lower your monthly mortgage payment with a Loan Modification. For a FREE LOAN MODIFICATION CONSULTATION call:
HOW TO RUN A LOAN MODIFICATION BUSINESS WITH HONOR AND INTEGRITY!
This is Cody Sperber one of the managers of www.AdjustMyLoan.com. I created this post because I have had the concept of “running a loan modification business with honor and integrity” on my mind and I thought it would be a good idea to share some of the core beliefs we believe in at AdjustMyLoan.com with you (our potential client).
With the news constantly looking for a worthy story, and many fly-by-night loan modification companies popping up everywhere, I feel like we (meaning everyone who does loan modifications) get pegged into the same corner as vultures who take advantage of homeowners facing major financial difficulties. And even though there are many who do take advantage of the situation, there are a few companies like AdjustMyLoan.com that are trying to position themselves to provide a valuable service with full disclosure and a pay system that protects both the homeowners and us as businessmen. We believe we have created a check and balance system that all Loan Modification companies should mirror if they are going to do business self regulated, ethical, and legal! We have taken some of our concepts from the Better Business Bureau as well as the United States Navy (which I am proud to have served for). We have researched the most aggressive foreclosure rules and laws (which happen to be in California and Florida), and implemented them into our contracts even though the great state of Arizona does not enforce these strict policies. Below is a list of responsible and ethical practices found at AdjustMyLoan.com that we wanted to share with you:
We are not in the business of coaching homeowners. We empower them through education of their situation and possible solutions. If any of our employees gets caught coaching homeowners to not make mortgage payments etc…then we let them go immediatly. We constently have training of how to interact with homeowners and their questions.
We offer FREE LOAN MODIFICATION CONSULTATIONS and charge NO UPFRONT FEES for our Arizona Loan Modification Service. We utilize FIDELITY NATIONAL TITLE to create an escrow account and escrow the money homeowners give us until we perform the services outlined in our contract. If we fail to perform, then the money automatically gets refunded to the client with no questions asked.
Our contracts are clear and to the point. We have a 3 day right of recession policy and we clearly outline our services and explain when it is that we will earn our money.
We have a standard fee we charge for our services and do not charge a percentage of the loan balance like some companies.
We are a member of the Better Business Bureau, D&B, and have a strict privacy policy where we do not rent or share any information with third parties without full disclosure and permission. Our offices are kept secured and only files we are actively working on are taken out of their locked file drawers.
We own the building that we are in (brick and mortar) and do not go to homeowners houses to sign people up at their kitchen tables!
Our management constantly has training from our legal counsel to keep us up to date on current foreclosure rules and laws.
Our employees were recruited directly from the banks we are negotiating with and go through extensive training before working on client cases.
Lastly, we only accept clients whom we truly believe we can modify their loan(s) for. We are not a chop shop that takes on any file that comes through the door only to throw it against the wall to see what sticks. We carefully pre-qualify all potential files before acceptance into our program.
In the end, integrity is a core concept that either a business centers itself around or completely ignores. There is no middle ground or grey area in the loan modification business. The talented Arizona Loan Modification Professionals at AdjustMyLoan.com want to earn your trust as well as your business and show you what an ethical loan modification company looks like.
CALL US TODAY FOR YOUR FREE LOAN MODIFICATION CONSULTATION
ADJUSTMYLOAN.COM EXPLAINS ARIZONA’S ANTI-DEFICIENCY LAW
Okay…first a quick disclaimer: AdjustMyLoan.com (Arizona Loan Modification Experts) is not giving you legal advice, stop foreclosure advice, or creating any type of client-Attorney relationship. This is informational only and we suggest you speak with a trained real estate / tax attorney about your specific situation and the rules / laws in Arizona as they pertain to Arizona’s Anti-Deficiency Statutes. Now, on to the good stuff.
When a homeowner purchases residential property in Arizona and defaults on their loan(s), their lender(s) have certain remedies they can pursue. They can sue the borrower directly or conduct either a Judicial or Non-Judicial foreclosure. Since Arizona is a Trust / Deed state, in most cases lender(s) file for foreclosure (sending you a Notice Of Default) and conduct a Trustee Sale (non-judicial foreclosure).
In some states, when a home is sold at a foreclosure sale and the amount it sells for is not enough to cover the underlying debt secured by the real estate, the lender can come after the homeowner for the Deficiency. Arizona has two “Anti-Deficiency” statues that will often apply to loans secured by residential real estate that can protect you from this happening! The first one applies to mortgages that are foreclosed on judicially (this practice is rarely used anymore but if you want to learn more, see A.R.S. 33-729(A)). The second Anti-Deficiency statute applies only to deeds of trust when foreclosed via a trustee sale (see A.R.S. 33-814(G)).
This is the anti-deficiency rule most homeowners care about and the one we will focus on.
In order to be protected under this statute, you must have residential property that is used for single-family or dual-family dwelling, and on 2 1/2 acres or less. (Commercial properties and Multi-Family units larger than a duplex are not protected under this statute) Next, you want to understand what kind of money you borrowed. Answer this question; Did the money you borrowed pay for all or part of the home you purchased?
PURCHASE MONEY
If all or part of the money you borrowed was used to purchase the property, NO DEFICIENCY will be available except in the case of voluntary waste (A.R.S. 33-729(A)). Voluntary Waste is when you damage the home and diminish the value (so if you are short selling your home or letting it go to foreclosure, don’t hire a salvage company to come gut the property…you can be held liable for all damages!!!) We consider money borrowed to purchase the property as “Purchase Money” because you basically went to a bank and borrowed money to buy a home and the home itself was the only security for the loan!
Refinance loans also fall under this protection as long as you did not get a “Cash Out Refi”. The law is a little unclear if a lender can actually come after you if you did a “Cash Out Refi” because the Anti-Deficiency protection under A.R.S. 33-729 (A) applies to loans used for payment of all “or part” of the purchase price! (See Bank One v. Beauvais, 188 Ariz. 245, 937 P. 2d 809 (App. 1997)) So if you did a “Cash Out Refi” and you are being sued for a deficiency, you may have a chance….but probably not!
NON PURCHASE MONEY
If the money you borrowed was not used to purchase the property “Non-Purchase Money“, then you might have a problem (Home Equity Lines of Credit fall under this type of money). Your lender can choose to either sue you directly on the note and waive security of the mortgage or deed of trust, file a Judicial Foreclosure and after the sale sue you for any deficiencies, or just continue with a Trustee Sale. If they just continue on with the Trustee Sale, then you are in the clear and should be protected against further judgements (See A.R.S. 33-814 (G)). If the lender decides to file a Judicial Foreclosure they will file a lawsuit and seek a judgement foreclosure on the mortgage or deed of trust. This process is expensive and time consuming (sometimes lasting up to 12 months). If this happens, the homeowner will have up to 6 months from the date of the filing to bring the loan current, but if they fail to do so, the property will be sold at a sheriff’s sale and the lender will have up to 3 months to sue for the deficiency. The amount of deficiency is typically limited to the difference between the total amount owed and the fair market value of the property (not necessarily the auction price). Lastly, the lender can just sue on the note, forgoing any security in the property. They would do this if you have little or no equity, have other collectible assets, and they do not want to wait up to a year for a Judicial Foreclosure to work its way through the system. THIS IS THE ONE YOU NEED TO BE WORRIED ABOUT AND IF YOU DO GET SUED…HIRE AN ATTORNEY IMMEDIATLY!
FHA, VA, AND HUD LOANS
These type of loans have different collection rules and can result in action against the person. If you have these type of loans, we suggest you get real proactive real quick when working with the lender(s) and if you do get in trouble, hire an attorney to represent you!
SUMMARY OF ALL THIS LEGAL MUMBO JUMBO
Arizona is a Trust / Deed state meaning we use Deeds of Trust to secure residential real estate. If you have a single family or duplex home on 2 1/2 acres or less, and your loan is “Purchase Money”, you are protectedfrom deficiency regardless if the lender uses a trustee sale or judicial foreclosure.
If your loan is NOT “Purchase Money” you may be liable for any deficiency if your lender uses a Judicial Foreclosure, or waives the deed of trust and sues directly on the note. If your lender decides to do the traditional Trustee Sale, you are protected from further deficiency judgements!
CAN AN ARIZONA LOAN MODIFICATION GIVE ME DEFICIENCY PROBLEMS?
No, an Arizona Loan Modification will not trigger a deficiency judgement because you are not selling the property, you are just recasting the mortgage. AdjustMyLoan.com helps homeowners audit, package, propose, and negotiate loan modifications on their behalf. In every loan modification proposal we build, we ask for a reduction in the principal amount owed (Principal Balance Reduction). Many homeowners are “upside down” in their mortgage(s) and owe as much or more than their home is currently worth so we attempt to reduce the amount owed to reset the loan back to current market values. If approved by your lender(s), this Principal Balance Reduction can trigger a tax event and the lender could issue a 1099(c) in the amount that was written off, BUT WILL NOT AFFECT OR CAUSE A DEFICIENCY EVENT! We ask all lender(s) to waive their right to 1099(c) our clients as part of the acceptance of our proposals…in most instances this works and the lender absorbs the tax ramifications as part of the deal!
ADJUSTMYLOAN.COM “ARIZONA LOAN MODFICATION EXPERTS” WANTS TO EARN YOUR BUSINESS!
AdjustMyLoan.com is a national loan modification company based out of Phoenix, Arizona. Our Loan Modification Experts want to educate homeowners on any “Stop Foreclosure” options available to them and teach them how a loan modification can help them avoid foreclosure, lower their monthly mortgage payment, and maintain their credit. We are a member of the Better Business Bureau and have many referrals and testimonials to prove our business ethics. We offer FREE LOAN MODIFICATION CONSULTATIONS to see if you qualify for any Arizona Loan Modification Programs and have a tracking system so you can follow your loan modification progress from start to finish. If you are interested in learning how a loan modification can help you and your family, call the phone number below today!
BELOW IS A LIST OF FAILED BANKS COURTESY OF THE FDIC. THESE “BLACK SHEEP” LENDERS HAVE BEEN TAKEN OVER BY THE FDIC OR SOLD TO OTHER BANKS AND ARE MOTIVATED TO MODIFY THEIR LOANS TO CLEAR THEIR BOOKS!!! IF YOU EVER WANT A FREE LOAN MODIFICATION CONSULTATION, CONTACT THE ARIZONA LOAN MODIFICATION EXPERTS AT ADJUSTMYLOAN.COM OR CALL OUR TOLL FREE NUMBER 1-800-557-7573.
FDIC FAILED BANK LIST
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.This list includes banks which have failed since October 1, 2000.
Below are a few advantages of a Loan Modification, as well as general qualifications to get accepted in a Loan Modification Program. We put this list of Loan Modification Informationtogether to help you understand what most banks are looking for before they choose to proceed with a work-out plan! If you are considering conducting a Loan Modification, www.AdjustMyLoan.com would love to earn your business. We offer FREE LOAN MODIFICATION CONSULTATIONS and can let you know quickly if we think their is a solution to your housing problem. Call our toll free phone number 1-800-557-7573 today and get the professional help you deserve.
AdjustMyLoan.com Comments On Whether Bankruptcy Judges Should Be Allowed To Force Lenders To Do Loan Modifications?
This post is a result of Citigroup announcing ( http://www.usatoday.com/money/economy/housing/2009-01-08-citi-mortgages_N.htm) its support of a “controversial bill in Congress to let bankruptcy judges reduce what debtors owe on home mortgages in an effort to stem the USA’s rising tide of foreclosures.” On the surface, the Professional Loan Modification Experts at AdjustMyLoan.com support this bill, but we do want to take a look at both the positive and negative affects it could have if passed! On the positive side, homeowners that are falling behind on more than just their mortgage payments and have to file bankruptcy, would have a real solution to clearing their debt, lowering their monthly mortgage payment, and saving their home from foreclosure! Also, it could cause other forms of loan modification programs to come to existence as a direct result of the bill being passed. Any movement towards Principal Balance Reductions on the amounts homeowners owe on their mortgages is a good move for everyone!
On the negative side, it may force many homeowners who just have a “housing problem” and not problems with their other bills to file bankruptcy just to qualify for some relief. Also, it could cause prices of mortgages to increase for everyone due to the lenders risk. What about the contracts between lenders who are acting as servicing agents and the Wall Street investors who purchased Mortgage Backed Securities? Would these “forced loan modifications” violate their rights? Lastly, is giving one person the power to decide how much, if any mortgage help necessarily a good idea? I guess we will have to wait and see what the pre-qualifications are outlined in the bill. With an estimated 8.1 million homeowners risking foreclosure, it could revamp the appraisal industry if every home within these programs had to have a certified independent appraisal!!!
Below is the article from USA Today about Citigroup’s backing of this bill:
By Julie Schmit and Stephanie Armour, USA TODAY
Lending giant Citigroup (C) on Thursday threw its support behind a controversial bill in Congress to let bankruptcy judges reduce what debtors owe on home mortgages in an effort to stem the USA’s rising tide of foreclosures.
The proposal, pushed by Democratic lawmakers, could be included in economic stimulus legislation.
The banking industry has long fought such “cramdown” legislation, saying that it would raise costs for other mortgage borrowers.
But Citigroup’s backing - after winning some concessions on the proposal’s terms - may persuade other banks to do the same and encourage the passage of legislation, supporters say.
”This would help hundreds of thousands of people quickly reach loan modifications,” says Kathleen Day of the Center for Responsible Lending, which supports the measure. “If you can keep people in their homes, everybody wins.”
An estimated 8.1 million U.S. homeowners are at risk of foreclosure.
The compromise was struck between Citigroup and top lawmakers, including Sen. Richard Durbin, D-Ill., and Sen. Charles Schumer, D-N.Y. Schumer said several banks have expressed interest.
Citigroup, in a letter to lawmakers Thursday, said the change would be an additional tool to help troubled homeowners and “represent an important step forward.”
But the Mortgage Bankers Association said in a statement it remained opposed to cramdown legislation because it would destabilize an already turbulent mortgage market.
Under the bill, only loans originated before the measure’s enactment could be altered. Lawmakers had sought the change for all loans. Also, borrowers would have to show that they attempted to contact their lenders to modify the loans before they filed for bankruptcy.
Judges could lower mortgage principal, change interest rates or extend terms.
Currently, bankruptcy judges can alter loan terms for vacation homes and other debt, but not mortgages on primary residences. Giving judges that power would not only help troubled homeowners, but prod banks to do more loan modifications before homeowners go to bankruptcy court, supporters say. So far, banks’ voluntary programs have had only minimal success.
“Whatever (lenders) were doing was working really badly,” says Patrick Newport, an IHS Global Insight economist.
If you are interested in learning how a LOAN MODIFICATION can help you lower your monthly mortgage payment, avoid foreclosure, and stay in your home, or you just want to educate yourself on the qualifications needed to apply for a LOAN MODIFICATION, contact the LOAN MODIFICATION experts at AdjustMyLoan.com.
CLICK ON THE VIDEO TO SEE ADJUSTMYLOAN.COM ON THE NEWS TALKING ABOUT THIS TOPIC!
WWW.ADJUSTMYLOAN.COM ANSWERS THE MOST FREQUENTLY ASKED LOAN MODIFICATION QUESTIONS!
WHAT IS A LOAN MODIFICATION?
Sometimes called Loan Restructuring or Mortgage Modification, a Loan Modification is an adjustment to your existing loan by your lender(s) as a response to your long-term inability to pay your mortgage. Loan modifications typically involve an adjustment of your interest rate, an extension of the length of the term of the loan, or a principal balance reduction all resulting in LOWER MONTHLY MORTGAGE PAYMENTS! A lender would choose to modify your loan if the cost of doing so would be less than the cost of default and foreclosure.AdjustMyLoan.com specializes in Loan Modifications and forbearance agreements.
CAN I ATTEMPT A LOAN MODIFICATION MYSELF?
Although in theory you could do your own loan modification, consider this: Do you have the experience, time, legal understanding, and energy to take on your own negotiations?Your lenders are never going to offer you the best loan terms right up front!In fact, they are going to push you in a direction that is in their best interest.
The loan modification experts at AdjustMyLoan.com audit, package, propose, and negotiate your Loan Modification to get you the absolute best loan terms available.
WHAT QUALIFIES ME FOR A LOAN MODIFICATION?
While there are some basic Loan Modification qualifications, each lender has their own requirements that continue to change.Typically, if you are stuck in a mortgage with a high interest rate, have a verifiable hardship that is preventing you from paying your mortgage, and provable monthly income you will qualify for most lender programs.
What if I am current?
Being behind on payments definitely helps motivate your lenders, however we have accomplished loan mods for homeowners with current mortgage payments.
Both primary and investment properties could qualify and your best bet is to call the loan modification experts at AdjustMyLoan.com for a Free Loan Modification Consultation: 1-800-557-7573 toll free or 480-968-5626 local.
HOW LONG DOES THE LOAN MODIFICATION PROCESS TAKE?
In most instances, a loan modification takes 60-90 days…but it could take longer, especially if we are requesting a principal balance reduction and your lenders legal department gets involved.By hiring professionals like those found at AdjustMyLoan.com you are assuring the fastest resolution possible.
You lender(s) would choose to accept a loan modification proposal if the cost of doing so was less than the cost of short selling or foreclosing on your home.In most cases a loan modification can be a win-win situation for both you and your lender…and a proper proposal is the key to conveying your situation.
Loan modification requests are paperwork intensive, and AdjustMyLoan.com’s Loan Modification Negotiators build proposals specific to your situation.
WHAT IS PREDATORY LENDING?
Predatory Lending is a term that refers to various illegal and immoral activities many lenders engage in when originating a home loan. Examples of predatory lending include equity stripping, asset-based lending, non-disclosure, and the notorious interest rate bait and switch.
These practices are a major cause of foreclosures, poor credit and unmanageable financial burdens. A Forensic Loan Audit by a trained professional can uncover these predatory violations and AdjustMyLoan.com conducts these audits on every qualified file!
WHY SHOULD I CHOOSE ADJUSTMYLOAN.COM OVER OTHER LOAN MODIFICATION COMPANIES?
AdjustMyLoan.com is a nationwide loss mitigation company based out of Phoenix, Arizona that specializes in loan modifications and forbearance agreements. We are a member of the Better Business Bureau and we have hundreds of happy clients and testimonials. In addition, we offer ongoing training for our professional staff and a tracking system so you can follow your Loan Modification progress. Our Loan Modification Blog is packed with loan modification news, do-it-yourself loan modification tips, and current loan modification programs. Lastly, we charge no upfront fee for our loan modification service and have a solid money back guarantee. If you are interested in a FREE LOAN MODIFICATION CONSULTATION, please visit our website www.AdjustMyLoan.com.
