June 29th, 2009 by michael e. riley
The “Making Home Affordable” program introduced by the Obama administrationis may soon change to allow higher LTV (Loan-To-Value) ratios which in turn will open the program to more borrowers, particularly those with upside-down mortgages (mortgages where loan amount signifficantly exceeds the property value due to falling home prices).
The program is currently open to the borrowers who’s loan amounts are up to 105% of the property value and are owned or guaranteed by the Fannie Mae and Freddie Mac agencies, which are currently sponsored by the US government.
The Director of Federal Housing Finance Agency James Lockhart has acknowledged in a press conference that the current LTV limit of 105% is being re-considered, however he did not reveal the new LTV figure.
Media reports that LTV limit could be raised to as much as 125% which could theoretically include up…
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June 16th, 2009 by michael e. riley
Sheila Bair, the chairman of the Federal Deposit Corp has noted that the loan modification efforts are having positive results, but their ultimate success will most likely depend on the economy and mortgage market.
“My sense is that it’s having an impact,” … but “there is obviously still distress in the mortgage market” Bair said in answering questions after a speech to the Chicago Federal Reserve Bank’s annual bank structure conference.
According to Bair, most mortgage holders will continue making their monthly payments if they are brought down to the affordable level, regardless of whether they are in the upside-down mortgage scenario or not. Upside-down mortgage refers to a condition when a home value is lower than the mortgage owed on the property.
Loan workouts are traditionally more difficult to pursue if the credit distress is driven by a life…
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May 19th, 2009 by michael e. riley
“FHA Streamline Refinance” refers to a process of refinancing a FHA mortgage and specifically the amount of documentation and underwriting that is required to be completed by the lender. The process (as any refinance) involves certain closing costs that are either paid up-front or rolled into the amount of refinance.
The requirements for the FHA Streamline Refinance are as follows:
- The mortgage to be refinanced must already be FHA insured
- The mortgage to be refinanced should be current and in good standing (not delinquent).
- The refinance is to result in a lowering of the borrower’s monthly principal and interest payments.
- No cash may be taken out on mortgages refinanced using the streamline refinance process.
There are a few different ways the lenders may offer FHA streamline Refinance. Some may offer it at no out-of-pocket costs by charging a…
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April 8th, 2009 by michael e. riley
This guide provides an overview of the FDIC’s program to assist bankers, servicers, and investors in this process. It outlines FDIC program terms at IndyMac Federal Bank, offers insight into the specific portfolio characteristics that drive modification modeling at that bank, and provides a framework for developing and implementing a similar program at your institution.
Federal Deposit Insurance Corporation (FDIC) official Loan Modification Guidelines.
FDIC “Loan Mod in a Box” additional Loan Modification Tools
Background
Although foreclosures are costly to lenders, borrowers and communities, the pace of loan modifications continues to be extremely slow (around 4 percent of seriously delinquent loans each month). It is imperative to provide incentives to achieve a sufficient scale in loan modifications to stem the reductions in housing prices and rising foreclosures.
Modifications should…
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March 31st, 2009 by michael e. riley
By default, most people are optimists. We all like to think that if our government creates a policy in a time of a crisis we can all depend on it to fix the problem at hand. The Obama administration has moved very quickly to address the housing problems that we all face as a nation and I applaud the effort. Many call it the “Obama Loan Modification”. It is unclear, however, if the Obama Loan Modification effort is going to reach as many people as may need it. For some of these people the effort is the last resort before crossing into poverty.
There are many blog posts and news reports out there describing the plan, usually riddled with technical terms and formulas that are hard to follow. In reality the rules of the Obama Loan Modification are fairly simple.…
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March 27th, 2009 by michael e. riley
Remodification is a term that many people use when they are speaking about a loan modification. If you read a newspaper, watch television, surf the internet or even have a drink at your local neighborhood bar you can’t escape it, loan modification is a new buzz word. There is a good chance you are even considering a loan re-modification for yourself. Just in case you have limited contact with the outside world, I will give you the basics. A loan remodification is when you change the terms of your loan with the lender you currently have, without refinancing. The reasons are as varied as the people that need them, but the most important one is to make sure the homeowners can stay in their home and continue to make payments that are relatively affordable.
This is where things can get…
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March 20th, 2009 by michael e. riley
Chris Hansen of Dateline NBC follows police with a camera crew while evictions are being conducted. The eviction victims are interviewed. This truly is a heartbreaking video. Be sure to explore your loan modification options and prevent foreclosure from happening. It is now easier than ever to perform loan modification and a number of government-subsidized programs have been created to help the struggling homeowners. Give us a call if you are unsure if the program applies to you.
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March 18th, 2009 by michael e. riley
Several government-subsidized loan modification programs made it easier than ever for struggling homeowners to modify their mortgages to a more affordable rate and prevent foreclosure. Borrowers who wanted to refinance in the past but could not qualify because their properties have lost value may be able to get a new more affordable rate meaning a lower payment.
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March 13th, 2009 by Ned Marks
When mobile homes were first being sold, most did not qualify for traditional mortgages, as most lenders treated them much the same a vehicle sales. After all, a buyer who could not make their payments could hook them up to a truck and drive them away to avoid mobile home foreclosure. However, as more people began buying mobile homes and they became more a part of the landscape, lenders became more acceptable to providing financing and when a homeowner could not make their payments, mobile home foreclosure began as opposed to repossession as in auto loans.
Typically, the price of a mobile home is considerably less than a traditional home and during a mobile home foreclosure, the land on which it is located, is usually not included in the sale. This type of unique situation exists because the home can…
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March 10th, 2009 by michael e. riley
When it comes to being behind on the mortgage payment, there is nothing worse because your home is the biggest bill you have and the one that is probably the most important. So when you are not able to pay the mortgage company, you are probably not able to pay a lot of other companies. This means that your credit has taken a huge hit and you are probably getting collection calls left and right from people who want their money and they want it now. If you do not have the cash on hand to bring your account up to date, then a foreclosure refinance may be your best option.
A foreclosure refinance is where you get your loan refinanced while you are in the middle of a foreclosure process. Luckily, laws allow for homeowners to seek that option…
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