Upside Down Mortgage

Archive for April, 2008

Loan Modification Versus Refinance

With so many terms cropping up in the lending industry, it is not at all surprising that consumers are getting a bit confused. In some cases consumers use certain terms interchangeable, furthering the misconceptions that similar sounding loan products are actually identical. Two loan products that routinely become confused are the refinanced loan and the modified loan. Although nothing alike, the procedures are sufficiently similar to warrant the frequent mistaking of their identities. During a refinance, a borrower contacts a mortgage lender and seeks to apply for a new loan product to replace the one he/she currently holds. The borrower will have the property secured by the loan he/she is trying to take out. In the process, the borrower must have the property appraised, prove personal creditworthiness, and pay either points or accept a higher interest rate in return for the new loan.

When a loan modification is done, however, the borrower applies to the current lender. Since the borrower is in the pre-foreclosure state, the creditworthiness is not sufficient to qualify for a conventional refinance loan. Additionally, in a loan mod scenario there are no points to pay. It is not the creation of a new loan but simply the changing of the terms of an already existing loan.

In order to qualify for a refinance of a home loan, a borrower must have adequate credit. To qualify for a loan mod, the home must be close to foreclosure. Some refinance loans do not require that a borrower proves any income while during a modification there must be a complete disclosure of all incomes and expenses. As you can see, the similarity that has some consumers confused about the loan modification versus refinance loan products rests solely in the resemblance of terminology. When comparing the loans products side by side, they are entirely dissimilar. This is also demonstrated in the attitude lenders have toward these loans. Getting a refinance loan is a means of incurring new business and generally speaking these loans are heavily advertised. Loan modifications, on the other hand, are a final effort at preserving a mortgage in danger of becoming a bad debt in the books of the bank, and therefore it is not widely advertised.

Consumers who need more information about this revolutionary means of saving their home from foreclosure are urged to compile their financial data and then contact their lender for a serious discussion about the options open to the borrower. To modify your loan, you can also visit the site www.loan-modification.com which is a very resourceful site/forum. Keeping in mind that borrowers who could qualify for a refinance will not be considered for a modification, it is wise to first seek to exhaust all other options before approaching the bank about a loan mod of the terms pertaining to the mortgage you currently hold.

About the Author:

Krista Scruggs is an article contributor to loan-modification411.com. Loan-Modification411.com connects you with service providers that can help you avoid foreclosure. We have several Loan Modification companies within our network, each with their own strengths and specialties. Depending on your specific situation (the Property State, your mortgage lender, your mortgage history, your hardship, and any other unique situation you might be in), we will match you up with the right company.

Article Source: ArticlesBase.com - Is Refinancing Similar to Modifying Your Loan?

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Mortgage Fraud For Property

Question: Is having a 2nd mortgage (owner financing) considered to be a negative in the eyes of a bank?

i am purchasing the property, the bank will have 1st position and the seller has agreed to take back a note 2nd position.

i am wondering if having a second mortgage will reduce my chances of closing the first mortgage?

i want to be clear, i plan to inform the bank and i have no intention to commit fraud by concealing the second mortgage.

Answer: It depends on if the first and second mean that you own none of the house. 100% financing is not going over well when values are dropping.

If you still made a reasonable down payment and your income to debt ratio is OK then you won't have a problem.

Fraudline: Straw Buyers and Mortgage Fraud

Predatory Lending Attorney

Question: I need to find an attorney and government agency that will actually enforce the law on predatory lending?

this company took over my home illegally and threw everything we own in a dumpster then stole my car and refuse to disclose where it is even after court ordered and are trying to make me still owe my mortgage company when I owned majority of home

Answer: You need to go to your state's attorney/public defender's office..

Who do you do business with?? The Sopranos??

Orange County Attorneys: Why Is Southern California Hard Hit By Predatory Lending?