Archive for the 'Loan Modification' Category
Political Action Voices Heard Loud and Clear…
April 12th, 2010 categories: Loan Modification, National News/Local News
The Voice of Frustration over the number of homes being foreclosed was Heard Loud and Clear today at James R. Thompson Center.
Several Political Action Neighborhood Associations met at a rally to voice support for a $1,000 fee on all judicial foreclosure sales in Illinois that would be used to try to prevent foreclosure.
- The $1,000.00 fee would be collected from purchasers at a Sherrif Sale.
- The collection of this fee would affect most lender’s because they are usually the ones who buy back the property at a Sheriff Sale.
- The fee would go into a Foreclosure Prevention Fund and help finance foreclosure prevention programs, organizations who are assisting homeowners who are delinquent on their mortgage.
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Illinois Attorney General Sues Debt Settlement Company
October 12th, 2009 categories: Loan Modification, National News/Local News
Illinois Attorney General Lisa Madigan has filed a law suit against Dallas Based “Credit Solutions of America”. Madigan is attempting to stop them from doing business in Illinois and wants the company to pay restitution to its Illinois customer, pay a $50,000 fine for violating the state’s Consumer Fraud Act and pay additional fines of $50,000 for each instance of fraud.
In the lawsuit, Credit Solutions of America accepted money from Illinois customers but failed to negotiate a lower payment on their debt with the bank. While Credit Solutions claimed to be successful in reducing customers debt by 50% it actually left them deeper in debt according to the law suit.
Lisa Madigan and the Illinois Attorney Generals office has filed similar lawsuits against SDS West Corporation and Debt Relief USA.
Her office seeks to ban all Debt Settlement Companies from operating in Illinois, unless they meet the following requirements:
- Provide individual credit counseling:
- Become licensed and Bonded in Illinois:
- Disclose risks to customers about entering into a debt settlement contract;
- Provide a written contract with a right to cancel clause.
Over the past year the Attorney Generals office received over 12,000 complaints regarding debt an credit issues.
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More than half of mortgage holders who get help fall behind again
October 1st, 2009 categories: Loan Modification
The following article is being shared from NY Daily News:
More than half of mortgage holders who get help fall behind again, just as lenders are ramping up efforts to avoid more home foreclosures, according to a new report by bank regulators.
More than 50% of homeowners with loans modified in the first half of last year had missed at least two months of payments a year later, government officials said Wednesday.
But the results were better among those who saw their payments drop substantially.
About a third of borrowers whose monthly payments were reduced by 20% or more fell behind again within a year. That compares with more than 60% of borrowers whose loan payments weren’t changed or increased.
The report on 34 million home loans highlights a significant challenge for the Obama administration’s plan to tackle the foreclosure crisis, backed by $50 billion in money from the financial industry bailout fund.
The administration’s effort got off to a slow start, but has picked up speed in recent months. As of last month, about 360,000 borrowers, or 12% of those eligible, signed up for three-month trial modifications. They are supposed to be extended for five years if the homeowners make timely payments.
Traditionally, most lenders have offered payment plans that allowed borrowers to catch up on missed payments. But those modifications often result in a higher monthly payment.
Under the administration plan, borrowers’ interest rates can go as low as 2% for five years. Bank regulators say they have pressed lenders to shift their focus to modifications that reduced borrowers’ payments.
My Comments to this article are below:
The success of any Home modifications will require lower monthly mortgage payments. Many people who want to stay in their home cannot afford the payments they have and are looking for lower mortgage payments. Unfortunately, loans being modified are not reducing these payments and therefore more people are defaulting on these modified loans. Also, there are people being offered modification programs who clearly do not qualify for this plan like those people who are unemployed. Its hard to modify a loan when you have no ability to pay? The success of any home modification plan will require the principal balance on the loan to be reduced to the “current market value”of the home. This is the only way to make the payment more affordable. Interest rate reduction and extending loan term are not enough. Finally, if the Fed really wants to help homeowners then it should guarantee the loss in the principal reductions. For example if a homeowner has a home loan worth $100,000 but the property is worth only $50,000 then the new loan should be modified at the current market value of $50,000 and the loss should be guaranteed by the Fed.
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Truth or Consequences
September 1st, 2009 categories: Loan Modification
I think we need to think about who we are rewarding and who we are hurting . While the intentions of the Making Home Affordable Mortgage Program ( HAMP) is supposed to be help homeowners who have fallen behind in their mortgage the number of people being helped is below the estimates. Originally it was thought that the program would help 9 million people faced with foreclosure and clearly this is not the case.
With unemployment rising in some areas modifying loans will not work. Yet the other day a client of mine said she received a call from the bank and has decided to pursue a loan modification with them even though she is unemployed.
I think the public does not understand that banks are under pressure to modify more loans and by attempting to modify more loans they get paid two ways. The get money from the homeowner and money from the federal government for servicing and modifying the loan.
Someone needs to tell the truth and let people know that if they default on the new loan they will have to pay the consequences. If a homeowner defaults on the new loan the bank can accelerate the foreclosure process.
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Mixed Review on Making Home Affordable Program
August 26th, 2009 categories: Loan Modification
Home Affordable Modification Plan (HAMP) has some mixed reviews.
The numbers indicate that 3.1 million people are eligible for the loan modification program but only 10% or 310,000 people have actually completed a HAMP application.
To date 96,000 loans have been modified. The verdict is still out on the success of these loans since they include a 90 day trial period. The homeowner must remain current on their new mortgage payment for 3 months before the loan is locked in at the new rate.
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Verdict Still Out on Number of Loans Being Modified
July 20th, 2009 categories: Loan Modification
The results of the Home Affordable Modification Program (HAMP) which the administration has reported will help prevent foreclosure for 9 million people will be coming out in July 2009.
The HAMP program began in April and HAMP data will be evaluated after a borrower completes a three-month loan modification trial period. It will be interesting to see the number of people actually being helped under this program.
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Putting the Pieces of A Puzzle together..
July 15th, 2009 categories: Loan Modification, Short Sales
Deciding what to do next about your home is like putting the pieces to a puzzle together.
Sometimes you don’t know where to start. When doing a puzzle, I always start to look for end pieces and work my into the middle.
Sometimes I get stuck and start all over. Sometimes I try to make two piece try to fit when they don’t.
Recently I heard of two separate families trying to solve the puzzle to their home problems by doing a loan modification on one corner of the puzzle and trying to fit a Short sale piece right next to it in the same puzzle.
Doing Loan Modifications and Short Sales together is like forcing two pieces in a puzzle that just won’t fit.
In the end up with an incomplete puzzle.
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NOTICE TO ILLINOIS RESIDENTS
July 6th, 2009 categories: Loan Modification
I am giving the link to a list of all the Hud Foreclosure Avoidance Counseling Offices.
On the left tab under Homes look for Avoid Foreclosure and Enter Page.
You will now be on a page that says Guide to Avoiding Foreclosures.
In the center you will see Get Help Now .
TALK TO A FORECLOSURE AVOIDANCE COUNSELOR.
Go to the Map of Illinois. From there you will be directed to All HUD Approved Foreclosure Avoidance Counseling Centers in the State of Illinois.
Please call an office near your home and make an appointment to speak with someone.
THIS SERVICE IS FREE…
DO NOT PAY SOMEONE TO HELP MODIFY YOUR LOAN.
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Obama Plan Defined
June 8th, 2009 categories: Loan Modification, National News/Local News
Making Home Affordable Program often referred to as the “Obama Plan” offers two programs: Home Affordable Refinance: For borrowers who are current on their mortgage but find it difficult to refinance because the value of their home has declined in value. Eligibility:
- You must own a 1-4 unit building
- The loan must be a Fannie Mae or Freddie Mac Loan.
- For Fannie Mae call: 1-800-7Fannie (8am to 8pm EST) or visit Fannie Mae
- For Freddie Mac call: 1-800-Freddie (8am to 8pm EST) or visit www.freddiemac.com
- You must be current on your mortgage,
- What you owe on your mortgage is the same as the current market value or slightly less.
- You have a job and income to support a new loan at a lower rate.
Home Affordable Modifications: For borrowers who are either struggling to keep their loans current or are all ready behind on their mortgage. Eligibility:
- You must owne a 1-4 unit building
- Have an unpaid principal balance equal to or less than $ 729,750
- Loan Origination date on or before January 1, 2009
- Have a mortgage payment including taxes, insurance, association dues that is more than 31% of your gross income.
- Have a mortgage payment that has become difficult to pay due to loss of job, income or other personal family problems which is considered a hardship.
- The loan Modification program is a voluntary program with the following Mortgage servicers
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IL Senate Bill 2513
May 11th, 2009 categories: Loan Modification
Senate Bill 2513 which was signed into law on April 5, 2009 as the Homeowners Protection Act is a temporary solution to the foreclosure crisis facing our state.
This new law essential is a 90-day moratorium on all home foreclosures.
- A lender must send a homeowner an additional notice of default by Certified Mail and cannot foreclose on the home for an additional 30 days after sending the warning.
- During this 30-day window the homeowner has the right to seek approved mortgage counseling.
- If the homeowner seeks counseling then another 30 days grace period will be given to work out a mortgage refinancing plan
- This stays another 30 additional days on top of the already 60 days given.
Who is eligible under the plan? All homeowners whose loans have not begun the foreclosure process.
Who provides the counseling? The Department o Housing and Urban Development (HUD) approved counseing offices that are recognized by the Illinois Department of Financial and Professional Regulation.
What is a Workout Plan? A workout plan will allow the homeowner to keep the home, stay current on the mortgage by suspending payments, lowering interest rates, extending mortgage terms, or reducing prinical balances.
The success of IL Senate Bill will be how many foreclosures are prevented and the results of the bill will not occur until after the 90 day moratorium.
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