Home Mortgage and Refinancing » foreclosure

Loan Modification – A Refinance in a New Dress?

admin — Mon, 07 Sep 2009 20:24:45 +0000

Lets be pristinely clear. The term Loan Modification means changing or modifying the terms of an EXISTING loan. A Refinance is a NEW LOAN usually done to cash out some of the equity in a house or to get a better interest rate that now exists. However you want to say it, its effects are similar. The conditions to apply for loan modification differ from refinancing in that the application for loan modification requires proof of hardship. This is not difficult to do in todays economy.

Loan modification deals with the current loan where the home owner and lender hash out modified terms to make it mutually workable and beneficial. Loan modification can solve a problem for both the home owner and lender. Foreclosure costs the lender money. Demonstrating to the lender that you want to save your home and help to work out some type of plan that will in turn resolve the dangers of foreclosure he will in turn be willing to negotiate. Loan modification allows homeowners and lenders to change the terms of a loan in order to help the borrower stay in the home and avoid foreclosure. It is a process that must be understood and thought out completely and thoroughly.

The sad reality is that there are possibly legions home owners who are in dire straits with their own mortgages and are considering foreclosure or looking for other ways out. The key factor to being accepted into the saving graces of the lender is to prove beyond a doubt that you are suffering from some type of hardship. A hardship is what can help you to achieve a loan modification and in turn save your home from plummeting into foreclosure. Home loan modifications are established for homeowners just like you who have lost your job, had a decrease in your income or are suffering from a hardship that may be keeping you from work.

Loan modification programs are very popular in today’s economy. Generally this comes down to a lower interest rate with a fixed loan program. Many of the programs do vary in how they work so you should contact your lender and advise them of your hardship and get more information. Each mortgage lender or servicer will have different loan modification programs and processes. As mentioned before, loan modification programs are just becoming mainstream and therefore there is little standardization. This may change in time but still have some flexibility. Make sure that you take the time to educate yourself so you can take advantage of the billions of dollars in homeowner assistance programs now being offered.

Loan modifications used to be limited for borrowers fell behind in their mortgage payments due to job losses, divorce proceedings, or illness, but today they are also open to those individuals who are afflicted by the aftermath of adjustable rate mortgages skyrocketing and placing the monthly payment beyond the means of the borrower. The loan servicer can use several ways to accomplish lowering of the payment such as reduce the interest rate to as low as 2%, extend the terms of the loan (possibly up to 40 years), forebear loan principal at no interest. Forbearance is a negotiation process with your mortgage lender to work out the delinquent payments you have not paid due to your financial hardship. The usual loan modifications are lowering the interest rate, reducing the principal balance, ‘fixing’ adjustable interest rates, forgiveness of payment defaults & fees, or any combination of these. It is uncertain the length of time these government assistance programs and loan modification programs will last.

A person could, pull cash out of the equity; however it would not come in the form of a lump sum as in a refinance. A person may recover from his hardship and get a better job and higher income. His expenses would still be lower. The net difference in this scenario, over time, if managed correctly, could present the future existence of new capital to either pay down the mortgage or invest in opportunities for more income or for whatever else one might use an equity draw.

Due to these government assistance programs, the time has never been better for consumers (who own homes) to take action and request that their loans be modified towards better terms and a lower interest rate. It is touted as the top solution to stop foreclosure rates from reaching alarming heights. A loan modification will decrease your monthly payments, lower your rate, avoid foreclosure, and save your home.

Ways Of Stopping Foreclosure Fast

admin — Fri, 04 Sep 2009 22:04:58 +0000

Because of the recession many people are faced with the terrible option of foreclosure. Stopping foreclosure on the other hand is something that can easily be done. If you want to keep your home, here are some great tips that will allow you to keep the home you love. It does not even matter if you have already received your notice! You can still stop the process and get back on your feet!

Lenders all over the country are losing money because people are losing their jobs and their means to pay their bills. Stopping foreclosure so something that can easily be done when you simply talk to your lender. If you have just been laid off, do not wait until the payments are overdue. Simply give them a call and see what they can do for you.

While you are on the phone with your lender you may want to think about a new payment plan. Because the job market is so low many people are out of jobs for months on end. If you will be using your savings, smaller payments each month will help make your savings stretch.

If you are behind in back payments then why not ask your lender to either let one or two of them slide or add them to your payment plan? In some occasions a lender might actually wipe away one or two payment in order to keep you current. Of course this means that you have to have a very good payment record. Those who do not make payments on time might not be able to get this option.

If you cannot get rid of a payment or two then why not add those to your payment plan? This way you would have to pay a couple of months extra but still be able to keep the home you love. If you owe 3 payments, then you would owe 3 more payments at the end of your mortgage.

If you have run out of options think about filing for bankruptcy. Many people stop their foreclosure and keep their homes by wiping the slate clean. Just make sure that you have the money to cover the bankruptcy attorney fees. Remember, the bankruptcy can follow you for about 7 years at least!

Right now stopping foreclosure is not a very hard feat. Lenders are more than willing to help out their customers with loan modifications and new payments plans. Call your lender and find out what they will be able to do for you.

Three Sources Of Clients For Real Estate Agents

admin — Fri, 04 Sep 2009 15:34:19 +0000

There is a lot of information available to real estate professionals on how to survive in this market. Very few of them however, I have looked at the demand side of the equation. Sure, if you position yourself appropriately for real estate leads you may have numerous properties to offer the new exacting customer, but where do you find that New Exacting Customer?

1) Investors: Although a lot of individuals feel that we have not hit bottom, the people looking to invest are starting to pop up. There are a lot of real estate investors are searching for that next opportunity, foreclosure, or discounted sale. The savvy Realtors that can help investors with the details of getting control of a property with less than 100% down, there may still be opportunities to be had. It may behoove you to promote your services and experience to the investment market, either for individual real estate services, or even consultation and guidance.

2) People looking to move: Yes it is now a buyer’s marketplace, but that does not mean that there won’t be buyers. Unlike the previous sellers market, buyers today have their choice of both the property that they want and the agents that they want to work with. To get the focus of these clients, position yourself as an aggressive savings manager with expertise in helping buyers get the best possible deal and the home of their dreams. As for attracting these clients, place ads, co-op market with your local coffee shop, fitness club and small businesses, and host how to buy foreclosure webinars and seminars.

3) Help relocating: Some of the most successful real estate agents are now turning to the relocation market and establishing programs to service that niche. Resources such as the internet, online pages, and even the phone book, or HR department of your closest multinational may be able to connect you with the right people.

4) Specialist in Real Estate Owned properties: Both on the buying and selling side, the agents that deal with the banks have a ready-made inventory on discountable properties. Contact the loss mitigation department of various banks to see if they have inventory that you can sell. Also, if you are familiar with the requirements of the banks to purchase bank owned property, you can position yourself as a specialist for both the investor and the movers looking for a deal.

Which One? Short Sale or Foreclosure

admin — Wed, 29 Jul 2009 15:53:15 +0000

It is so easy to lose your house in this time of fiscal crisis. A lot of people who have got downsized are unable to pay the monthly amortization on their houses which give left banks and fiscal establishments with no other way out but to foreclose these properties. Fortunately , there are ways of stopping foreclosure. If you are one of those people who are about to lose their homes, here are some simple methods for you to obstruct or stop bank foreclosure.

Foreclosure is a repugnant thing and you stand to lose a lot of things when your home gets foreclosed. To avoid foreclosure, you could need to sell your house. Selling your house may sound painful to you but when things really get coarse, it’s way better to sell your home and earn some money out of the sale than let the bank foreclose your property. To get the maximum out of the sale of your home, learn how much is the present valuation of your home. If you home is found in a prime location, its price may have increased considerably in the past few years.

To get a fair assessment of the market valuation of your house, interview some property agents who specialize in real estate for your area. You may also hire the services of a pro broker to sell your house. The nice thing about hiring a pro broker to sell your home is that you will no longer have to go to all the difficulties of finding a buyer and then doing the bureaucracy once the buyer decides to buy your home. What is the catch? The catch here is you need to pay a commission to the broker after the sale of the home. However, considering the sort of service that you get from the broker, it is only fitting that you compensate your broker well. Remember that there is no such thing as free service nowadays.

The home market is in a bad shape and many properties across the country are worth considerably less than their original price . If your property has been badly affected by the housing crisis, you’ll have to sell your home for a lesser price. Yes, a short sale isn’t terribly appealing but in comparison to foreclosure, a short sale is better. To stave off foreclosure and still be ready to get a fair price on your property, you want to put your property up on sale as soon as possible.

Banks are not truly pleased with the idea of foreclosing so many properties. Remember that banks are into the money business not the property business. Since the bank has equity over your property, the bank party owns your house. Foreclosure of bank owned properties is therefore bad business for them. Banks want their clients to continue paying their amortization and so long as their clients are willing to pay their monthly amortization, banks are open to talks. If you need to stop bank foreclosure, you should not disregard the collection letters from your bank. A lot of bank repossessions happen after the customer ignore a pair of collection letters from the bank. Rather than ignoring the collection letters sent to you by your bank, you must take the time to reply to these letters and negotiate for further grace period. You may also visit your bank and talk to the loans of officer personally. Tell the loans officer that you are willing to pay your dues to stop bank foreclosure but you want a little time to get the money for this purpose.

When negotiating with your bank, you need to outline your plans on how you’re going to pay for your finance needs. You may also submit a monetary plan to the bank. Your money plan needn’t be complicated. All you must do is to demonstrate the bank where you’ll get the money to pay for your monthly amortization.

Finding a Dallas Foreclosure Attorney

admin — Wed, 29 Jul 2009 15:11:20 +0000

Finding a Dallas foreclosure attorney is needed if you think you need help if you are in danger of foreclosure. Foreclosure lawyers will know of the all the options available to you if you have missed many months of mortgage payments and are facing foreclosure. Though the outlook may be bleak there are options available.

Unfortunately, the worldwide recession has caused a huge increase in the number of foreclosures, and there is no sign of the numbers lessening. Many people are unaware that when faced with a foreclosure, there are options available which could help you save your home. The best thing you can do is to engage the services of a Dallas attorney as soon as you are faced with the possibility of a foreclosure. This will boost your chances of getting to keep your house.

A Dallas foreclosure attorney will be able to advise you on your course of action. Filing for bankruptcy is one option but there are many others. All foreclosure defense attorneys are working towards the one goal of helping you keep your home.

If the lending companies can have lawyers help them through claiming homes, you are definitely entitled and advised to do the same in order to stand a fighting chance of keeping your home.

There are also many mortgage and sub-prime lending fraud that has occurred and uncovering this can lead you to not having to foreclose on your home. Many sub-prime mortgages were assigned to individuals when they should not have been and in this case it is the bank that were committing fraud on the loan application as it should not have been approved.

It can save you a lot of time and money if you can figure out which type of attorney you require before hiring anyone. There are defense attorneys who specifically handle cases of foreclosure fraud towards banks, and other lawyers who handle foreclosure defense in general. To find the best lawyer for your case, it is best if you phone up several different firms and ask if they offer a free consultation. Go in and discuss your case with each firm and then make a decision based on the information learned.

What Actually Happens in Foreclosure

admin — Sun, 26 Jul 2009 20:43:37 +0000

With the ongoing economic downturn, more and more homes and properties face foreclosure over the past year or two than ever before. Besides the poor economy overall, the biggest factor is the sub-prime lending spree of the past few years that created ballooning payments and allowed people to enter into mortgages that they couldn’t manage and shouldn’t have been given.

When a home goes into foreclosure, the lender obtains a court order to terminate the agreement and take possession of the property back from the signer. This is usually the bank that underwrote the mortgage agreement or loan.

When someone takes out a home loan or mortgage, the bank or lender gets a security interest from the borrower, in essence pledging the house or property as security for the loan. If they default on the payment terms, the bank or lender can try to repossess, or foreclose on the property.

While the main reason for foreclosure is failure to pay the mortgage note or loan, it isn’t the only reason. Property tax that hasn’t been paid, overdue HOA dues or assessments, even unpaid contractor bills are all problems than can lead to a foreclosure action.

The actual process of foreclosure on a residential mortgage loan can begin after the owner has failed to comply with the mortgage agreement. At that point, the creditor, usually the bank, would want to take possession of the property in order to try to recover their principle by reselling the property.

In foreclosure, the lender can opt to try and sell the property and keep the proceeds to pay off its mortgage and any legal costs. When this happens, this is considered as a lender foreclosing on the mortgage or loan. While there are some legal remedies, it is obviously much better to avoid going into foreclosure to begin with.

Mortgage Foreclosure Solutions

admin — Sat, 25 Jul 2009 13:45:27 +0000

Alright boys and girls you are staring foreclosure right in the face and now you need some practical mortgage foreclosure solutions to help you keep your happy home and make sure your lovely wife doesn’t leave you for the mailman.

By now you have probably learned that running down the street screaming Oh my God they are taking my house! is not one of the effective or practical mortgage foreclosure solutions and that something a little more proactive is needed to fend off the bank.

You might feel like you have absolutely no rational solution to your foreclosure problems. Don’t be distraught. Don’t start to think about crazy solutions like blowing up the bank; those thoughts are the not helpful at all. There are free solutions to foreclosure problems, however, that you can find by reading on.

One practical and effective solution to mortgage foreclosure is to use machine gun nests. This might not seem like a real solution, but it can be. Whenever someone comes to home with the intention of serving you with eviction papers, the machine gun nests will encourage them to turn around and leave you alone.

These machine guns do not have to be loaded or real. The idea is to scare off your foreclosure enforcing enemies. The power of fear can keep you in your home until the police decide to lock you up in jail for using the machine guns.

The Circus Is In Town!

Do you have a big back yard? Then have a circus and pay your mortgage from the admission proceeds! This solution is so simple it is hard to believe that more people are not employing it as one of their mortgage foreclosure solutions. All you need is a backyard at least the size of 3 football fields. Then you need a huge canvas tent big enough to accommodate a three ring circus and at least 5,000 spectators.

The next step is getting together the other things you will need for the circus. That means clowns, peanuts, popcorn, and elephants. Once you take care of that, the money will just start rolling in. This will require a bit of work, but it could be what saves you from losing your home. Opening a circus is a great idea because your neighbors are sure to love it and you will love the money you earn.

5 Ways To Get Out Of Foreclosure

admin — Sat, 25 Jul 2009 13:37:15 +0000

Your house is the last thing that you want to lose. Unfortunately even though we know this for a fact, we tend to take our mortgage payments for granted and end up losing our homes. In this case, a home foreclosure will happen. When a borrower fails to pay his or her mortgage for a number of payments (usually 3) the lender will issue a foreclosure by selling the house or repossessing it.

Often the lenders lead their borrowers to believe that they don’t have other options available. However, there are other alternatives that homeowners can use to keep their house off the auction block. The following is a list of ideas to consider if your in the foreclosure process.

1)Short stop

This is a short refinance for the foreclosure of your property. If you don’t want a new loan to cover an existing one, you can ask the help of a friend. A borrower’s friend or relative can buy or pay off the mortgage.

2)Negotiate a payment plan

In this case the homeowner agrees to pay a portion of the amount and agrees to pay the rest in the succeeding months. The homeowner shows proof of their income and pays a down payment. This is a much easier way and most lenders agree to this plan. Keep in mind that some lenders will contract out the agreement. (normally 3 to 5 months)

3) Change of plans

Sometimes a temporary change in the terms of the loan can be given when properly negotiated. These changes include amortization extension and reduction of interest rate. A foreclosure negotiator handles the job of getting these plans approved. This is a total process for another short term fix. This may sound a lot like the second option we discussed however this is much more involved.

4) Third party sale

The property on foreclosure is sold to a third party. The proceeds will go to the mortgage lender as a settlement for the debt.

5) Friendly third party sale

The third party who buys the property sells it on foreclosure to clean the deed of other holders. Then the property is sold back to the original owners/borrower.

These are just some of the options that borrowers can utilize in attempting to retain their properties. Remember these alternatives are outside the original terms of the agreement. Homeowners may have to negotiate their way with lenders and banks. Preventing home foreclosure is still better than looking for a cure.

Short Selling Your Home More Beneficial Than A Loan Modification When Facing Foreclosure

admin — Thu, 23 Jul 2009 19:08:23 +0000

Don’t we all love the home we live in? Our kids are in established schools, we have lots of memories in the house, we love our neighbors, and we’ve redecorated. The list goes on. But were facing financial difficulties – perhaps facing foreclosure? But moving would be very hard. It disrupts a family’s life. Letting our neighbors know that we are facing financial difficulty would also be really hard.

When your house is upside down it may be years to recuperate the equity, and mortgage payments that you make make little dent in the negative equity situation. Many homes in San Diego where we work have upwards of $200,000 in negative equity. For example a home bought in 2007 for $400,000 is now worth only about $200,000.

Lets do the math. Your house is in San Diego, California and your loan is for $400,000. It was originated in July of 2007 when you bought your house in Carlsbad, California at a 6.5% fully amortizing rate (meaning you are paying down the loan). If it is a 30 year loan you will pay $510,177 in interest alone for the loan when it pays off in 2037. This coupled with paying all the principal would cost you $910,177 to payoff the loan. That’s a lot of money! If you needed to sell the house before the paydown of the loan to sell it at today’s price in San Diego you wouldn’t be able to do that until 2027 – that’s 18 years from now! Hopefully prices will go up in San Diego in 18 years, but what if you needed to sell in 5 years? In 5 years you would still owe $365,000 ” that $162,000 in negative equity to be made up in a very short period of time.

What if lenders are not granting short sales at that time? You will still not have made any money on that house, you will have paid out $30,339 in interest and principal – AND YOU WILL GET NONE OF IT BACK. The bank still might take your home.

So lets look at the scenario where you got out today in a short sale, and bought another house in 1 year, which is possible if you are aggressive with your credit repair. Sell the house for $200,000 ” thats $200,000 forgiven. Expect a credit hit, but in one year houses will still be dirt cheap. In San Diego houses are still experiencing a decline in prices. So say in one year that house is now worth $175,000 and you buy a similar one in the same neighborhood with 10% down. Your loan would be $157,500. For comparison sake lets assume the interest is 6.5%, fully amortizing for 30 years. Your total interest paid for the life of the loan would only be $200,244. To pay off the entire loan over 30 years you would end up paying $357,244. That’s a savings of $552,993.00 – a half a million dollars!

So lets look at the scenario where you got out today in a short sale, and bought another house in 1 year, which is possible if you are aggressive with your credit repair.

In San Diego houses are still experiencing a decline in prices. So perhaps in one year that house is now worth $175,000 and you buy a similar one in the same neighborhood with 10% down. Your loan would be $157,500. Let’s assume the loan’s interest is 6.5%, and is fully amortizing for 30 years. Your total interest paid for the life of the loan would only be $200,244. To pay off the entire loan over 30 years you would end up paying $357,244. That’s a savings of $552,993.00 of a half a million dollars! ($910K-$357K)

So by moving on, particularly if you are facing a financial difficulty, you will not only get out of your negative equity situation (and essentially be losing money), but you will save over $500,000 by getting out and getting back in. What would you do with that money? Pay for college education for your kids? Save up for retirement? Pay off other debts? Let me ask you, does it financially make sense to stay in the home? I know you love it, but separate out the emotions from the finances. What ultimately will be better for you?

5 Tips To Get Out Of Foreclosure

admin — Wed, 22 Jul 2009 19:10:46 +0000

Your house is the last thing that you want to lose. Unfortunately even though we know this for a fact, we tend to take our mortgage payments for granted and end up losing our homes. In this case, a home foreclosure will happen. When a borrower fails to pay his or her mortgage for a number of payments (usually 3 the lender will issue a foreclosure by selling the house or repossessing it.

More often than not lenders often lead their borrowers to believe that they don’t have other options available. There are other alternatives that homeowners can use to keep their house off the auction block and get out of foreclosure. The following is a list of ideas to consider if your in the foreclosure process.

1)Short stop

In some cases you can get a short refinance for the foreclosure of your property. If you don’t want a new loan to cover an existing one, you can ask the help of a friend. A borrower’s friend or relative can buy or pay off the mortgage.

2)Negotiate a payment plan

The homeowner agrees to pay a portion of the amount and agrees to pay the rest in the succeeding months. The homeowner shows proof of their income and pays a down payment. This is a much easier way and most lenders agree to this plan.

3) Change of plans

A temporary change in the terms of the loan can be given when properly negotiated. These changes include amortization extension and reduction of interest rate. A foreclosure negotiator handles the job of getting these plans approved.

4) Third party sale

The property on foreclosure is sold to a third party. The proceeds will go to the mortgage lender as a settlement for the debt. This is the most common conclusion to a foreclosure.

5) Friendly third party sale

The third party who buys the property sells it on foreclosure to clean the deed of other holders/liens. Then the property is sold back to the original owners/borrower. Under a new contract of sale and then the process is complete. Many times this is a “seller financing” deal.