If you are having any problems with your mortgages, then perhaps it is a good time to refinance. Mortgage rates are very low currently. By refinancing, you are likely to save a lot of money each month. If you are upside down on your current mortgage, you can find better mortgages and better terms. Many homeowners who are upside down on their mortgages find themselves no longer upside down by refinancing. They are also able to lower their mortgage payments significantly. Some of them were worried about being in foreclosure but, after refinancing, they are able to comfortably pay for their monthly mortgage payments and never have to worry about being in foreclosure again.
The question is how to refinance and get the best mortgage rates. You need to do some research into what mortgages are best for you and what mortgage rates are available. You need to compare mortgages before you decide which one is best for you.
Use the service below to compare mortgages at no cost!
Predatory Lending Housing Crisis
Recently homeowners in my corner of Harlem held a soiree in someone's garden. We form a warm group of 130 people who represent the changing neighborhood -- black old-timers with a growing number of whites. Everyone brought a dish or bottle and the talk over the macaroni was cheerful. Did anyone know a good contractor? How did the Little League do this summer? A door prize, a box of Godiva chocolates, was awarded to the longest resident -- Dina Morrison, 93, who has lived with her older sister in the same place for 67 years. No one mentioned foreclosures.
Foreclosure crisis? What crisis? Not in Harlem.
Harlem is full of the sort of people who are losing their properties all over New York City, namely little old ladies and working-class African-American families. But the nation's black capital has been insulated from the sub-prime meltdown by the very thing usually blamed for destroying communities of color -- gentrification.
While the dreaded G word has priced some residents out of the 'hood, we've seen a paradoxical upside. The house values that have skyrocketed over the past 15 years in Harlem scared off many predatory lenders who targeted other black areas. These $1-million-plus price tags have also given homeowners who are struggling to keep apace with mortgage payments the option of selling out before the bank closes in.
"There tends to be a tight connection between property values and foreclosures," explains Josiah Madar, from the Furman Center for Real Estate and Urban Policy at New York University.
He and other experts understand little about the mechanisms of abusive lending, other than the stark racial component. Eight of the ten top neighborhoods hit by foreclosures in the city are overwhelmingly non-white. A map representing the worst afflicted areas -- among them Bedford-Stuyvesant, East New York, North Bronx, South Jamaica -- says it all. Each filing is a dot, and the aforementioned areas resemble solid metastasizing cancers, with several hundred foreclosures each.
Yet the area comprising Hamilton Heights, which claims some of Harlem's most prized Victorian brownstones, had just eight foreclosure notices, so few one can discern the individual specks.
It appears that the conmen who besieged other black neighborhoods steered away from Harlem, wagering that anyone who lived in a valuable townhouse would be too financially sophisticated for their tricks. Unlike in the outer boroughs where the racial demographic is similar but house values lower, Harlem residents didn't report a barrage of flyers pushed through mail slots that promised zero interest rates. The scam artists who solicited people to over-borrow just didn't approach Harlem as aggressively. Take a look at the numbers. Only 0.8 percent of all home-purchases mortgages in the Hamilton Heights area in 2006 were sub-prime, versus 34 percent in Bedford-Stuyvesant and 39 percent in East New York. (EDITORS -- These are the latest available figures.) Refinancing loans from risky lenders were likewise lower here.
"It was all a matter of the assumptions of the predators," said Dwayne Jones, lending director of the Parodneck Foundation, a housing advocacy group. "They did not come to Harlem." He credits the large concentration of organizations like his, as well as social networks like our homeowners' association, for raising awareness among less savvy member of the community.
Those Harlemites who did borrow more than they actually owned could take the money and run. That's what our next-door neighbor did. Literally a week before the bank jumped to possess her 1888 row house, she sold the property for a nice packet to a white family and found something cheaper. Granted, it's disruptive to move but she was spared financial ruin.
The added positive effect is that properties like hers do not sit vacant during New York's long foreclosure process. We see a vicious cycle in foreclosure-hit areas, where empty houses sink the cost of those nearby. As anyone who lived through Harlem's dark ghetto days knows, no one wants to live next to a boarded up building that tempts drug dealers to loiter. Moreover, few people want to buy a boarded up building with a leaking roof, which is often the case as banks rarely maintain the properties they seize.
This is not to say that gentrification is great for everyone. Of course it has a bad side. Most Harlemites rent apartments and do not dwell in fancy mansions. The locale is losing its status as the last outpost of affordability in Manhattan. Those suffering are victims not of the white professionals who buy shells and fix them up. No, the destructive forces are the big developers who scoop up rent-stabilized apartment buildings and then try to force out tenants by doing improvements and jacking up the price. Some of these investors borrowed more than the value of their properties, and now risk default. Then what happens to the residents living on the premises?
For the time being, though, homeowners like Dina Morrison are in a good place. There's talk among the homeowners of a jolly Christmas party, just like every year of plenty.
©2008 Judith Matloff
About the Author:
Judith Matloff is the author of Home Girl -- Building a Dream House on a Lawless Block (Random House.)
Remarks on predatory lending
Loan Modification Appraisal
If you’re falling behind on your mortgage and cannot qualify for a refinance or an alternative payment plan, it is time you negotiate for a loan modification (mortgage modification). This is where you can work with the lender and get your loan terms and conditions modified so that you pay off the loan comfortably. The lender may either lower your mortgage rate thereby reducing your monthly payments or extend the loan term and make sure your dues are added to the loan balance.
The very first step in loan modification is to contact your lender or the current mortgage servicer to whom your lender has conveyed the servicing rights. But prior to contacting the lender or servicer, make yourself aware of the 3 things that decide whether you will qualify for loan modification. These are:
1. Your affordability: Lenders want to make sure that borrowers are not taking advantage of loan modification, that is, they are not applying for it even though they can still pay. This is why you need to prove that you simply cannot keep up with the payments. So, you need to explain your exact financial situation and provide data on your property value and how much you can afford to pay on your home. Here’s what you will need to have with you.
1. Monthly income and source
3. Monthly expenses in detail
4. Bank statements
5. Loan agreements
What you need to do here is, prove that you cannot afford the payments and it is certainly going to help your situation if you opt for a loan modification.
2. Your home equity: This is an important factor based on which the lender may or may not modify your loan. If you have enough equity in your home to pay off mortgage dues and foreclosure expenses, then the lender is likely to consider foreclosure as a low-cost solution.
However, there are some lenders who inflate your home appraised value when home prices are on a decline. But if you’re aware of property values or recent home sale trends in your area, you can get an idea of your home equity and thus avoid inflated appraisals.
3. Modification costs: Lenders prefer to minimize the costs when it comes to modifying one’s loan. However, mortgage modification is carried out by experts and lenders have no other option but to spend more when it comes to expanding their number. This is why some lenders do not respond quickly when they receive a loan modification request. So, here’s where you need to be active and negotiate in the best possible way.
With loan modification you can avoid a loan default as your payments become affordable. However, make sure you understand the modified terms and conditions in order to avoid further problems in your mortgage.
About the Author:
Jessica Bennet is an experienced financial writer associated with Mortgagefit Community. She has been guiding the Community through her writings and suggestions in our Community forums.
Article Source: ArticlesBase.com - 3 Things To Know Before You Go For Loan Modification
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