Aug 10
30
Affordable Home Loan Modification Program – HAMP
If you are struggling to make your mortgage payments you may be able to get your lender to modify the loan under new government guidelines.
Here are the eligibility criteria for loan modification:
Mortgage must have originated on or before January 1, 2009.
Home must be an owner-occupied primary residence (verified with tax return, credit report, and other documentation such as a utility bill) – this program is not designed for investor-owned properties.
Home must be a single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law).
Home may not be vacant or condemned.
Borrowers in bankruptcy are not automatically excluded from consideration.
Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than: – 1 Unit: $729,750 – 2 Units: $934,200 – 3 Units: $1,129,250 – 4 Units: $1,403,400
Foreclosure actions are suspended (not cancelled) during the trial period or while borrowers are considered for alternative foreclosure prevention options. If homeowners fail to qualify, foreclosure proceedings may resume.
No minimum or maximum LTV ratio for eligibility purposes.
Loans are eligible for only one loan modification under the program.
Subordinate liens (such as second mortgages or home equity loans or lines of credit) are not included in the Front-End DTI calculation, but they are included in the Back-End DTI calculation. Back-End DTI is used to determine whether the borrower will be required to undergo credit counseling as a condition to modification.
Servicers should follow any existing express contractual restrictions with respect to solicitation of borrowers for modifications. Applicants will be accepted into the program only until December 31, 2012 (the program expiration date), but incentive payments will continue up to five years after the date of entry into the Home Affordable Modification Program.
Monitoring will continue through the life of the program.
Eligibility requirements are simply government guidelines. Guidelines may change, and lenders make exceptions, if it is in their best interest to do so. In other words, homeowners should not count themselves out.
If you are having trouble making your house payment, they should explore the loan modification option. Sometimes, the only way to determine whether you qualify is to apply.
40% modified mortgages later fail (be warned)
Tens of thousands of homeowners who were hoping for lower payments are discovering that lenders roll late fees, back taxes or other costs into the principal, sometimes turning a difficult payment into an impossible one. That’s one reason many reworked mortgages are sliding back into default. Monthly payments, on loans modified from Jan. 1, 2008, through March 31, 2009, increased on 27% and were left unchanged on an additional 27.5% according to a recent report by banking regulators. Many modified mortgages fall delinquent — 25% to 40%, depending on the type of mortgage.
It’s too early to know if this pattern will continue under the Obama administration’s $75 billion initiative to get lenders to reduce monthly payments for homeowners struggling to make their mortgages.
A total of 360,165 mortgage modifications are now in a three-month trial period under the government’s plan announced in March. But the initiative focuses on reducing interest rates rather than cutting principal. “Payments have [either] gone up [or] the payment relief can last for the first few years and then go up (again),” says Alan White, assistant professor of law at the Valparaiso University School of Law in Valparaiso, Ind.
October Update in Loan Modifications
Eight months after Obama pledged to help as many as 9 million families keep their homes by reworking their mortgages; the plan is plagued by delays, red tape and a reluctance by banks to do their part. Just 17 percent of eligible borrowers have had their loans modified and monthly payments cut and hardly any have been given a cut in the amount they owe on homes which are now worth less. In fact, Diana Olick says, “under HAMP only five, yes FIVE, modifications of the half million involved principal forgiveness.”
Statistics are already showing that 50% of modified loans go on to eventually fail as home owners struggle to pay even the new lower monthly mortgage bill.
For help with a loan modification call me on 702 416 4812 and I’ll put you in touch with a firm of layers who take no money up front or offer a money back guarantee if they don’t do what they say they will do.
Free World Solutions – short sales to set you free!
Las Vegas 702 416 4812
