Are you eligible for a loan mod?
A look at 2 options for troubled borrowers
By Bernice Ross, Thursday, August 13, 2009.In case you haven't heard, the Obama administration has asked major lending institutions to commit to doing at least 500,000 loan modifications before then end of 2009. Is this a viable solution for your home?
Have you lost your job? Has your income declined significantly since you first purchased your home? Has your mortgage readjusted to a higher interest rate that you can't afford? If so, there's a good chance that you may be eligible for a loan modification.
One of the most common questions on many real estate message boards is, "Do I have to pay an attorney to obtain a loan modification?" The answer to that question is, "Only as a last resort."
The loan modification industry is packed with charlatans who are ripping off consumers. If a company is charging upfront fees for its services, look elsewhere. There are plenty of places where you can get help, and much of it is free.
An excellent place to start is with the Making Home Affordable program, which provides two different solutions for troubled homeowners. The first is the Home Affordable Refinance Program (HARP) for borrowers whose mortgages are owned by Freddie Mac or Fannie Mae. To qualify for this program you must meet the following criteria:
1. "At the time you apply, you must not have been more than 30 days late on your mortgage payment in the last 12 months. If you have had the loan for less than 12 months, you must have never missed a payment."
2. "The amount that you owe on your first-lien mortgage does not exceed 125 percent of the current market value of the property." If your property is worth $200,000, your first mortgage cannot exceed $250,000."
3. "You must be able to demonstrate your ability to make the new mortgage payments."
4. "The refinance must improve the long-term affordability or stability of your loan." ...CONTINUED
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Jon Astaris on August 13, 2009 - 1:31pm.
"the Obama administration has asked major lending institutions to commit to doing at least 500,000 loan modifications before then end of 2009"
So? The Obamastration can ASK until the cows come home - unless bernice is trying to convince the hapless howner that the Obamastration is DICTATING what the banks will do - otherwise we're looking at wind. And it's a gale.
Submitted by Jillayne Schlicke on August 13, 2009 - 2:11pm.
"Have you lost your job? Has your income declined significantly since you first purchased your home?...If so, there's a good chance that you may be eligible for a loan modification."
This is a mis-leading statement.
The homeowner will still have to prove that they can qualify to repay the modified payment. Without a job, chances of the loan mod happening are quite low.
Homeowners seeking a loan mod must be able to document stable monthly income. This could also rule out a substantial number of homeowners whose income has dropped significantly.
Submitted by Danny C. Flucke Jr. on August 13, 2009 - 3:00pm.
Our clients and friends have used the following three questions to eliminate the stress and frustration caused by "less-than-ethical" modification companies:
1) What is your fee? Your fee should be in the $1,000 to $1,250 range. If the company is charging a higher fee - Call the next company on your list. (Your flat-fee through NaMoEx is only $997 - Possibly even lower with Senior Citizen and/or Veteran-Military discounts.)
2) What is your performance guarantee? You deserve a 100% Money Back Guarantee. If the company does not offer a guarantee - Call the next company on your list. (All of our clients have the security of a 100% refund policy.)
3) When will we know the EXACT terms of our modification? You should know EXACLTY what modification options you qualify for BEFORE your case file ever gets submitted to your lender. If the company states "it's up to the lender to figure that out" - Hang up and call the next company. (They obviously do not have the certifications and/or access to the data feeds required to calculate your modification options.)
As always - It is Buyer Beware.
Homeowners seeking assistance can choose to either:
1) Negotiate from a position of knowledge and strength with a fully documented and data supported case file - Requesting the absolute best modification terms...
Or
2) Simply send in check stubs/W2s and let their lender decide their new terms.
Common sense will tell you which homeowners end up with the absolute best modification terms - At the lowest rates/payments...
Thanx, Danny
Danny C. Flucke Jr.
Senior Partner
Nationwide Mortgage Experts, LLC
Direct: (714)624-9479
DCFJ@NationwideMortgageExperts.com
www.NationwideMortgageExperts.com / www.NaMoEx.com