Upside Down Mortgage

Archive for July, 2007

How To Modify Mortgage

Question: What should I name my mortgage modification company?

I'm setting a company to help homeowners modify there mortgages they are having trouble paying. I understand there are many homeowners that need help and that's what I'll do is help them stay in there homes. Do you have a sugestion on a good name for this type of company. I have a couple idea's but none really excite me.

Thanks

Answer: (your initials) Mortgage Hero

If you find the name you want, and you want a logo made... let me know! Im a graphic designer and I will create a free logo for you!

Loan Modifications - How To Modify Your Home Mortgage Payments

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Loan Modification Trial Period

The Obama administration generated a simplified loan modification program that aims to reduce homeowner's monthly mortgage payments based on their monthly gross income. There are two types of programs under Obama's plan: The Home Affordable Modification Program and Home Affordable Refinance Program for mortgage refinancing.

How will Obama's Loan Modification Plan Work?

• Servicer will reduce monthly mortgage payments of the borrower to not more than 38% of borrower's monthly gross income.
• The government will assume part of the principal amount and manage other cutbacks to hit threshold of 31% on the borrower's monthly gross income.
• When 31% is achieved, the borrower enters trial period for 3 months.
• If the borrower succeeded in paying timely mortgage payments during the trial period, a new fixed rate will take effect for the new modified loan that will run for 5 years.
• Benefits such as cash incentives are thrown in to lure lenders/investors, servicers to join, and for borrowers to pay on time from trial period until the term ends (5 years).

Who can qualify for Obama's Home Affordable Modification Program?

• Only owner-occupied homes are eligible.
• Applicant must satisfy the Front-End Debt to Income (DTI) ratio of 31% to the monthly gross income set by the program. Total PITIA (principal, interest, taxes, insurance) and HOA (excluding mortgage insurance premiums) must hit this threshold.
• Applicant must satisfy the Back-End Debt to Income ratio of less than 55% to the monthly gross income which is the monthly total debt payable (eg, credit cards, car payments, student loans, etc.).
• Homeowners that have limited liquid assets and serious substantial income loss.
• Loan initiated on or before January 1, 2009.

Home-owners with unpaid principal mortgage balance equal to the following:

• 1 Unit: $729,750
• 2 Units: $934,200
• 3 Units: $1,129,250
• 4 Units: $1,403,400

Take note that the mortgage applied can be modified under this program only once. Your untimely records of delinquent balances will also be waived. If faced with foreclosure, proceedings will be temporarily suspended while undergoing the trial period. Should the applicant fail, foreclosure measures will resume. This is a charge-free program. New borrowers will be accepted until Dec. 31, 2012. Timely mortgage payers are automatically disqualified from this program.

What To Prepare If You Qualify For Obama's Mortgage Plan And How?

• If employed, you must present substantial documents to validate income loss, such as, recent pay slips and income tax return.
• If self-employed, third party documents for profit and loss statement must be provided.
• Substantial information of assets.
• Account balances on all monthly payments and monthly housing expenses, such as, credit cards, student loans, second mortgage, insurance and taxes, etc.
• HUD-counselor approved document that states counseling commitment must be submitted. Only then shall the loan modification take effect.

It is advisable to collect and present all these to the loan servicers for initial assessment. They can help you determine early if you can be considered for a loan modification.

What Are The Benefits Of Obama's Loan Modification Program?

If you qualified for Obama's loan modification modification, the following benefits will take effect:

• Servicer Incentive Payment of $1,000 is paid to the servicer for every eligible loan modified.
• Pay for Success fee of $1,000 additional payout each year for three years to the servicer if the borrower pays timely from trial period of three-months until term ends. A fixed rate for five years will take effect after trial period.
• Pay-for-Performance Success Payment of $1,000 is given to the borrower each year for 5 years which will be redirected to the principal amount provided that borrower follows program guidelines.
• For every successful modification, a one-time incentive of $1,500 and $500 shall be given to lenders/investors and servicers, respectively. A successful loan modification means that the borrower completely made timely mortgage payments during programs term.

Who can qualify for Obama's Home Affordable Refinancing Program?

• Home being refinanced must be a primary residence.
• Current loan must be secured by Fannie Mae or Freddie Mac. Contact them at 1-800-7FANNIE, or 1-800-FREDDIE to inquire or log on online at http://www.fanniemae.com/homeaffordable.
• Applicants must have current and timely mortgage payments for the last 12 months.
• First mortgage payable must not exceed 105% of your home value.
• Must have a stable income.

Note that, mortgage refinancing will be at fixed rate for 15 or 30 years. The interest rate is based on the market rate upon closing. No prepayment penalties will be charged but, applicant will pay for fees related to the mortgage refinancing.

If you are financially incapacitated while indebted to a home of diminishing value, you probably will not qualify for Obama's loan modification programs.

About the Author:

Get your Free Do It Yourself Loan Modification Kit. loan modification kit includes everything you need to complete a loan modification on your own. It will teach you how to negotiate with your lender and most importantly what NOT to say to your lender. The secret to a successful loan modification is how you present your case to the lender. This DIY loan mod kit will explain the loan modification negotiation process in explicit detail.

Visit our website for How to articles, mortgage calculators, free sample hardship letters, foreclosure timelines, and dozens of informative articles on loan modifications and foreclosure. Stop by to check out our growing library of free financial kits. We currently have bankruptcy kits, credit repair, and loan mod with more on their way!

FreeDIYkits "Helping Homeowners Help Themselves"

Article Source: ArticlesBase.com - Obama's Loan Modification & Mortgage Refinance Plans

Four Types Of Mortgage Default Insurance

What Is Mortgage Life Insurance?

If you have a mortgage and are a home owner, you have most likely heard the pitch for mortgage life insurance. It typically comes in an envelope from your lender and might include a letter from your lender suggesting that you buy a policy.

It is important to realize though, that the insurance itself is sold by insurance companies. Even though it is called "mortgage insurance," it is in reality decreasing term life insurance that will pay off your mortgage if you pass away.

How Are Premium Payments Planned?

Mortgage life insurance is a decreasing term policy. The policy starts with a death benefit that is equivalent to your existing mortgage balance. The death benefit reduces at the same pace as your mortgage balance. The premium payments never vary but may cease before the loan payment. Your lender may agree to include the premium payments to your monthly mortgage expense.

Is Mortgage Life Insurance Identical to Private Mortgage Insurance (PMI)?

No-mortgage life insurance is commonly befuddled with Private Mortgage Insurance (PMI), but they have little to do with one another. You purchase mortgage life insurance willingly to shelter your family from having to pay the mortgage.

Mortgage lenders require you to buy PMI to shield them (the lenders) from the probability that you will default on the mortgage.

Insurance Tip: Request for insurance agents to estimate their best price for a decreasing term policy in the same amount, period, and interest rate before buying from a sales pitch sent by your mortgage company.

What Is Credit Life Insurance And Credit Disability Insurance?

When financing some kinds of big items - automobile, furniture, audio equipment - there is a good possibility you will be presented with credit life and credit disability insurance. Credit life guarantees to pay your balance if you die. Credit disability will pay your payments if you become disabled and not capable of working.

Credit life is a decreasing term policy. The insurance premiums are typically added into the loan contract. This type of insurance is constantly voluntary and it can be rather costly. Your lender cannot require you to purchase credit life or credit disability insurance.

Although they may have some comparable elements, credit life and credit disability insurance are not the same thing as mortgage life insurance.

What Is A Life Insurance Rider?

A "rider" is something that is supplementary to the basic policy. Riders can be used to either add benefits to the policy or limit benefits previously in the policy. Common riders are as follows:

Accidental death: Double indemnity is an additional name for this rider. It means that the benefits paid by your policy will be two times the face sum of the policy if you die in an calamity.

Approximately twenty percent of policyholders perish in accidents.

The price for an accidental death rider is usually reasonably priced.

Some critics bring up the point that how the policyholder dies has nothing to do with how much money your survivors will need.

Waiver of premium: This rider allows you to cease paying premiums whenever you happen to become disabled and unable to continue working.

It is crucial to comprehend how the rider defines "disabled." For example, the meaning could be very restrictive and require you to be so extremely disabled that you cannot do any sort of work whatsoever.

A disability policy can also defend you from monetary hardship due to a disability. Depending on the kind of policy you acquire, it could supply capital to pay for all of your living expenditures, not solely your life insurance premium.

Mortgage protection: This rider fundamentally attaches a mortgage life policy to your chief policy.

Other insured: You can insert life benefits for your spouse or children. They may have varying coverage amounts and be subject to medical underwriting, however.

Guaranteed insurability: This rider would characteristically be added to a whole life or universal life insurance policy.

It gives you the right to procure a new policy or amplify the maximum on your existing policy without having to pass another medical assessment.

The rider will most likely indicate how much you can add and at what time you can do it.

The guarantee may not persist after you reach your mid to late forties.

Accelerated death benefit: This permits you use some portion of your death benefit when you have an incurable sickness. Some policies will insert this rider without causing your premium to enlarge.

Insurance Tip: If your agent automatically includes riders when calculating your premium, request the agent to value each rider independently. You can then choose whether you think the additional benefit any rider provides is worth the added rate.

About the Author:

Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in
life insurance policies
, companies, and advice as well as finance and business. For a free
term life insurance
quote, please visit

http://www.equote.com
.

Article Source: ArticlesBase.com - Mortgage Life Insurance Policies

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