Archive for the 'Loan Modification' Category

HELP FOR HOMEOWNERS IS COMING TO ROSEMONT ON APRIL 23, 2012

 

A Main Event is coming to Illinois on Monday April 23, 2012. This Event is being co-sponsored by Department of Housing and Urban Development (HUD) and the Department of the Treasury. The event is divided into two (2) parts.  Morning Sessions are devoted to working with Realtors and giving them SHORT SALE Training but the afternoon event will be devoted to working directly with Homeowners who are struggling to make their mortgage payments and want a opportunity to meet face to face with their lenders. I encourage all homeowners to make this event because it is free and you do not want to miss out on a opportunity to solve your problem. You can meet with a HUD counselor to discuss the Home Affordable Refinance Alternatives (HARP) , Home Affordable Mortgage Alternative (HAMP), Short Sale, Deed in Lieu of Foreclosure.

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Written by Jack Lewitz | Discussion: No Comments »

Somethings Brewing with The Banks but it is not likely to be ready for Halloween

imagesCAT5P6BF Looks like something is brewing with the banks but it is not likely to be ready for Holloween.  Huffington News reported Banks  ( BOA, Chase, Citi Mortgage, Wells) just to name a few are thinking about Principal reductions to help homeowners. Resisting this concept of Principal reduction is Fannie Mae and Freddie Mac.

Its kind of scary the banks are actually thinking logically here with a program that might actually help the housing market. As a realtor involved in the distressed market I have been consistent with my feelings that the only way to solve the houseing crisis is too look at the whole picture.

I support this concept of Principal reduction as I feel it is a WIN WIN WIN situation for all homeowners whether you are in distress or not.  If principal reduction is done properly then the housing crisis will begin to correct itself.

First Principal reductions should not be automatic. It should be based on current market values. Anyone could be eligible to refinance their home at the current market value with one stipulation. The amount reduced is not forgiven but just a forebearance until the property is sold. So inother words homeowners will become equity partners with the bank on the forebearance amount of the new loan and will share in the future benefits when sold. This is a paper transaction so banks show no loss on their books and preserve their capital requirements, continue to get stream of payments on the new loan, and can start lending on new loans. Win for Banks.

For the homeowner it is also a win. Those who are struggling will now be able to afford a new mortgage since it is based on Principal reduction, lower interest rates, and longer terms thus keeping mortgage payments affordable. This is what is needed to keep people in their homes. Win for Struggling homeowners.

Finally those homeowners not struggling will also benefit by this because as more homeowners struggling are able to refinance and keep their homes less homes will be foreclosed and home values will begin to stabalize. This is a Win for homeowners in general.

I wish Fannie Mae and Freddie Mac would embrace this Principal Reduction Plan and see it as a way to stabalize the housing market.

Written by Jack Lewitz | Discussion: No Comments »

Political Action Voices Heard Loud and Clear…

002  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.

Written by Jack Lewitz | Discussion: 3 Comments »

Illinois Attorney General Sues Debt Settlement Company

land-of-lincoln 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.

Written by Jack Lewitz | Discussion: No Comments »

More than half of mortgage holders who get help fall behind again

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.

Written by Jack Lewitz | Discussion: 1 Comment »

Truth or Consequences

televisions-11-longest-running-game-showsI 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.

Written by Jack Lewitz | Discussion: No Comments »

Mixed Review on Making Home Affordable Program

797-20090814_MORTGAGES.large.prod_affiliate.91 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.

Written by Jack Lewitz | Discussion: No Comments »

Verdict Still Out on Number of Loans Being Modified

Understanding Mortgages

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.

Written by Jack Lewitz | Discussion: No Comments »

Putting the Pieces of A Puzzle together..

iStock_000005894355XSmallDeciding 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.

Written by Jack Lewitz | Discussion: No Comments »

NOTICE TO ILLINOIS RESIDENTS

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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.

Written by Jack Lewitz | Discussion: No Comments »

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