Upside Down Mortgage

Archive for July, 2007

Sample Loan Modification Hardship Letters

Everyone who has ever tried to do a loan modification by themselves knows how hard it can be. The process is very threatening. You might want to refer to a sample loan modification in the US. The process of course has a lot of twists and turns. First off, there is the application form that you need to form completely. This is more straightforward than the other tasks. But still, there are some tricky things you have to go through. Then there are the negotiations with your creditor. This can be handled well if you research the conversion of rates others are offering. Then there is the letter expressing the hardship of your situation. This part is perhaps one of the trickiest because you really need to balance your tone. So here for your reference is an example letter. Read this sample loan modification in the US if you need a guide.

To Whomever It May Concern:

This letter is a formal follow up to my loan modification application which I have sent this past August 12, 2009. The details of what we are looking to have are in the application, but of course it does not delve into the conditions that put us into a precarious financial situation.

Due to the recession, there were many jobs losses and cutbacks in our company a couple of months ago. Because of this, I was transferred into a lower paying job position. I consider myself one of the lucky ones because at least I still have a job, but my new salary is less than half of what I used to receive. Our financial situation got so bad that we had to break our savings so that we could pay our monthly mortgages while keeping up with our other expenses. Then, a couple of months ago, things got worse as our interest rate shot up from 8 percent to 11 percent since we were not able to pay the mortgage monthly.

In light of this, my request is that our rate be brought down around eight to nine percent. This seems like a fair amount for all parties. We were never late in our monthly payments until I was demoted. Also, my wife is about to start on a higher paying job two months from now. We are very willing to negotiate a compromise that will make both parties happy.

Sincerely,
John Doe

This sample hardship letter, as you can see, is very direct. You can even be more direct than this letter. The statement here is that you will not be able to pay the high interest due to a loss of income. Just mention why you had lost your income in the first place. Make sure you elaborate that there is no other way that your family can manage the bill right now.

Also, it is quite important as shown in sample loan modification in the US that you state the new rate that you want to have. Save them the time and effort. Think about how many applications they have to sift through. They will not have time to look for the definite adjustments.

About the Author:

A computer graduate and loves to travel. Reading current news in the internet is one of his past times. Taking pictures of the things around him fully satisfies him. He loves to play badminton and his favorite pets are cats and walk with them in the park with some dogs.

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Article Source: ArticlesBase.com - Writing a Letter: Sample Loan Modification in the US

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Mortgage Fraud On Long Island

The number 13 seemed to be a bad one for real estate agents in two prominent cities this week.  In both Tucson, AZ, and New York City, NY, 13 people were involved in some sort of legal action that could shake the industry in some fashion.

In Tucson, a consumer fraud lawsuit was filed by Arizona Attorney General Terry Goddard stating that these particular real estate professionals were luring unqualified consumers to buy an estimated 130 homes as rental properties.  These weren’t for the people to live in, but to use as investment properties that would be managed by the corporations.  The investors were enticed by promises of worry-free investment returns, had to pay little or no down payments, were told they’d receive investment income from eventual renters, and that they didn’t have to do anything except collect the money that would be streaming in.

What these investors didn’t know, because many just signed the documents, is that the terms of the loan included high interest and adjustable rates, pre-payment penalties, yield-spread premiums and balloon payments.  Most of the people weren’t even qualified to get the loans, but the corporations were able to somehow get the money anyway.  Then, when the investors couldn’t keep up with the payments, the houses would be foreclosed upon and become the property of these companies.

Goddard is suing them under the state's Consumer Fraud Act, hoping to get a penalty of $10,000 for each violation.  He also mentioned that more defendants could be added to the lawsuit, but declined to respond to the question of whether any of the defendants could be charged criminally.

The story is different in New York, where the 13 people were criminally indicted for larceny and fraud charges, the most serious of which, enterprise corruption, could result in 25-year sentences.  Manhattan district attorney Robert M. Morgenthau said it was a multi-million dollar mortgage fraud scheme that victimized lenders and low-income homeowners.  The people indicted

included lawyers, real estate agents, appraisers and bank workers, and were accused of participating in 19 sham real estate transactions.  Prosecutors said the fraud occurred over a four-year period ending in April in Cypress Hills and East New York in Brooklyn, Washington Heights in Manhattan and in Westchester County and on Long Island.

What happened here was, based on a scheme hatched by a company that was created only to run the scam, AFG Financial Group, they would look for people who were having problems keeping up with mortgage payments and offer to buy their homes from them.  If the homeowners agreed, the company would then look for buyers, but inflate the worth of the home to the lenders.  Then, at the closings, the lawyers would pocket the difference and walk away, while the new homeowners would find that they’d signed papers for payments out of their range, and then had problems finding the people who’d negotiated for them in the first place and would be stuck with mortgages they couldn’t pay.  The company also got loans from banks for homes that didn’t exist; that’s scary on many fronts.

Just when you thought you’d heard it all, especially with all the other problems the real estate market has been suffering, these two stories will help highlight why realtors are looked at with a critical eye by the general public.

About the Author:

Search Phoenix new homes, Tucson new homes and Arizona new homes!

Article Source: ArticlesBase.com - “13†Unlucky For Real Estate Professionals

Obama Signs Mortgage Fraud Bill

MORTGAGE EXPERT, MICHIGAN, BIRMINGHAM, BLOOMFIELD, DETROIT, ROCHESTER, ROYAL OAK, TROY

The most talked about real estate news of the past week seemed to be all about the First Time Homebuyer Tax Credit getting extended.

I've had numerous people contact me asking for the details and have had to tell all of them that nothing has passed yet. 

Given the confusion and misinformation I thought I'd give an actual update on where the extension is.

The big news is that an unofficial voice vote passed the Senate last week, and Senate Majority Leader Harry Reid announced that he's planning an official November 2nd vote on the extension in the Senate.  Discussions with his counterparts in the House lead him to believe that the House will also pass the bill in the coming week.

This could put the bill on President Obama's desk by the end of the week.

What could go wrong?  Well, the vote was held up last week by demands for votes on several other amendments, one calling for an end to the Treasury's TARP program by year end.  An extension of unemployment benefits is also rumored to be causing issues.  Popular bills like this one often have other amendments added to them that might not pass otherwise, so a lot of compromising goes on.

Some New Wrinkles

In its current form, the bill would extend the tax credit to the end of April 2010.  There are several proposed differences from the current tax credit:

• To qualify, a sales contract would have to be signed by April 30th and the transaction closed by June 30.
• Income limits would be increased from $75k for single people & $150k for couples, to $125k and $225k respectively.
• Buyers who have lived in their current home for the last 5 years would be eligible for up to a $6500 tax credit (or 10% of the purchase price).
• The maximum allowed home purchase price would be capped at $800,000.
• Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.
• To combat fraud, a HUD-1 Settlement Statement will have to be attached to the tax return to secure the credit.

Stabilizing the Housing Market

The Homebuyers Tax Credit is probably the best program passed by the government since the financial meltdown started.  Other  measures to stabilize the economy are increasingly under fire for racking up trillions in tax payer debt, while mostly benefiting the elite on Wall Street.

More than 1.25 million taxpayers have taken advantage of the tax credit to pursue the American dream of home ownership.  This has used up approximately $8.5 billion of the $13.6 billion originally set aside for the program. 

Reports show home sales have increased and inventory is down.  Many buyers are finding it difficult to locate a home, being outbid and outhustled.

Concerns

Even this program has its problems and detractors though.  Recently, the Treasury's Inspector General for Tax Administration, J. Russell George, told Congress that at least 19,000 filing for the credit hadn't bought a house when they filed.  Another 74,000 appear to have owned a home in the last 3 years, making them ineligible for the program.  500 plus filers for the tax credit are under 18 years old! 

The IRS is pursuing criminal cases against at least a 100 offenders and is reportedly trying to audit every return where the credit is claimed this year.  They'll also be auditing themselves as Mr. George is also on record stating that they are investigating at least 53 cases of IRS employees filing illegal or inappropriate claims for the tax credit.

Many detractors are claiming that the tax credit is subsidizing housing values and just pulling forward sales that would have happened anyways. 

One potential problem that the media hasn't focused on yet, is that the tax credit may be encouraging banks to sit on foreclosed homes.  Many real estate experts have pointed out that the number of foreclosures has been outpacing the number of units entering the market for some time now.  Instead of putting these homes on the market to be sold, banks could be sitting on them to drive down inventory and push up prices - using bailout funds to support this endeavor.  Not a lot that can be done at the "street level" about this, but surely something for our representatives to look into

Don't Procrastinate

Hopefully, the extension of the tax credit won't turn more buyers into procrastinators who wait until the last minute to buy.  Buyers should keep in mind that finding a home isn't like shopping for Christmas items or even a car - where their are multiple copies of the desired item.

Homes are much more unique, rarely are even two homes remotely alike.  Start your search now, as it could take awhile to find what you want.  When you do find it, jump on it or someone else usually will. 

About the Author:

Drew Sygit writes and speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He’s presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA’s, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. He also publishes his own blog: http://drewsmortgagenews.blogspot.com. He can be reached at [email protected].

Article Source: ArticlesBase.com - Extension & Expansion of Homebuyer Tax Credit

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