What is a loan modification? A loan modification is when your mortgage terms, rate and payments are modified to reach an affordable monthly payment. You must meet certain criteria to qualify for the most popular loan modification program provided by the government which is called HAMP or Home Affordable Modification Program.
There are various reasons why homeowners are trying to get a loan modification. One of the main reasons is due to a job loss which becomes a financial hardship. And the question is ‘Can I do my own loan modification?’. The answer is YES. If you, the homeowner, is willing to spend time on the phone and do some paperwork, then you can do it.
The first thing a homeowner should do is call their lender (mortgage company), request for the loss mitigation department and ask for a loan modification package. This will let them know that you are willing to work with them on getting your loan back on track. They will give you a list of items that they want. These items can include proof of income, hardship letter which states why you can’t pay the current mortgage, bank statements, and so on. Be honest and provide what they are asking for and let them know your situation. The lenders do not want to hear sob stories but just the facts and a summary of your ability to repay your loan.
If the lender doesn’t respond quickly, be patient. There is a process and many homeowners, like you, have submitted their requests, too. At the same time, keep detailed records of all your calls. Once contact is made, write down the name of the person with whom you spoke, his or her identification number, the date and time of your conversation and a summary of what was said. Also make copies of all your correspondence and other paperwork. Lenders tend to lose things.
Avoid SCAMS from companies who offer services to do your loan modification for a fee. That is illegal. Only pay for services rendered, if any. The main thing is keep informed, keep pushing and stay in communication with your lenders. Nothing will kill your chances of modifying your loan than not communicating your situation to them and waiting until the last minute to work something out.
In understanding the market value of your property, we must deal with some factors that we have no control over. These factors are physical qualities of your property and the competition.
* Physical qualities:
- Location
- Age
- Size of House and Lot
- Floor plan and design style
* The Competition:
- The number of similar properties for sale
- Their prices and financing terms
- Physical Condition
Then there are some factors that have no effect on the current value of your property. These factors are original price and opinions of others.
* Original Price:
- What you originally paid for your house
- Credits or closing costs
- Down Payment
- The actual Sale Price
* Opinions
- What people say your property is worth
- Websites that contain comparable sales
The New York Times
Program will pay homeowners to sell at a loss
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: Paying some of them to leave.
To read the full story, please click here.
Los Angeles Times
Many borrowers in default stay put as lenders delay evictions
Despite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend.
To read the full story, please click here.
The Wall Street Journal
What home sellers don’t tell buyers
As buyers ease back into the battered real-estate market, they’re often hitting a stumbling block: Fibbing by home sellers. Buyers should do their own due diligence and not rely on agents and sellers.
To read the full story, please click here.
Daily Breeze
State and national foreclosure filings continue to rise
Even as the economy and real estate market show signs of stabilizing, foreclosure filings continued to grow in California and nationwide last year.
To read the full story, please click here.
According to the California Association of Realtors, qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the U.S. Dept. of Housing and Urban Development (HUD) recently announced.
Currently, borrowers applying for an FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Buyers still must issue the mandatory 3.5 percent down payment, but the tax credit now can be used as an additional down payment, or for other closing costs, which can help lower principal balances and monthly payments.
To read the full story, please click here
SF Chronicle
Beginning April 1, Fannie Mae and Freddie Mac will increase mandatory fees and toughen credit-score and down-payment rules.
Under the new guidelines, applicants will be charged more for down payments of less than 30 percent. Home buyers with FICO scores between 700 and 720 will pay an extra three-quarters of a point. Applicants who purchase a condominium and do not have a 25 percent down payment also will pay a three-quarter point add-on penalty, regardless of their FICO score, for purchasing a condominium instead of a single-family home.
The two Government Sponsored Enterprises (GSEs) said the additional fees are to counter higher risks and losses associated with certain loan products, buyer equity stakes, and credit scores.
