Posts Tagged ‘loan modification questions’
Thursday, February 26th, 2009
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.
Tags: adjustmyloan, arizona loan modification, forensic loan audit, government loan modification, LOAN MODIFICATION, loan modification advice, loan modification experts, loan modification information, LOAN MODIFICATION NEWS, loan modification questions, loan modification service, loan modification specialists, predatory lending, regulation z, tila
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Thursday, January 22nd, 2009
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 protected from 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!
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Saturday, January 17th, 2009
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 Information together 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.
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Wednesday, January 14th, 2009
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!
1-800-557-7573
Tags: adjustmyloan, arizona loan modification, arizona loan modification company, Bankruptcy Loan Modification, Citigroup Loan Modification, LOAN MODIFICATION, loan modification advice, loan modification experts, loan modification help, loan modification information, LOAN MODIFICATION NEWS, loan modification questions, loan modification service, stop foreclosure
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Sunday, January 11th, 2009
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.
WHY WOULD A BANK ACCEPT MY REQUEST FOR A LOAN MODIFICATION?
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.
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