Upside Down Mortgage

Archive for August, 2009

Jumbo Loan Modifications California

As unemployment creeps up the income brackets, the extravagant homes that served as the background of shows like “The OC” and “Laguna Beach” are likely to begin suffering price decreases similar to their less expensive neighbors. According to Mark Hanson of the Field Check Group, homes that fetched over $1 million dollars during the real estate boom are the next category in the cross hairs of heavy price decreases.

Growing unemployment rates are being felt in the prime mortgages already. The percentage of prime borrowers seriously delinquent on their mortgage rose 20.3 percent during the first quarter compared with the previous quarter. It was up 163.7 percent compared with the same quarter a year ago. In comparison, the percentage of subprime borrowers seriously delinquent rose only 1.5 percent during the first quarter. It was up 54.9 percent from the same period a year ago. That is not to say that the subprime borrowers are better off than the primes, it’s evidence that the complete washout of the riskiest borrowers is winding down.

The jumbo prime borrowers, like those in Orange County, Ca. have weathered the downturn better than most, but there are signs that trouble is around the corner. One sign is that the supply of million dollar homes in the county would take 13 months to liquidate at the current pace of sales. Wage and price deflation have pulled prices down but the financial viability of those in the upper income and asset brackets has limited what a massive round of foreclosures would do to prices at those levels.

While foreclosures might not be a challenge at the moment, homes financed with jumbo primes face issues that lower priced housing doesn’t. At the lower price levels for housing, government backed loans like FHA/VA are available and provide options and liquidity to those markets. There is no such animal for homes at $1million plus.

Another issue is buying power. During the boom lenders approved loans at 7 to 8 times the income level of the buyer, giving a couple earning $200,000 a year the ability to buy a home in the area of $1.5 million. If one could be found, a jumbo loan today would only be approved at 3 to 4 times the same couple’s income level, a reduction in buying power of 50%. Should banks keep their lending requirements at these levels, collective incomes would have to skyrocket to qualify purchasers to buy again at those levels. The resulting liquidity crunch would be a disaster, especially if foreclosures eventually start to ramp higher.

Second homes and vacation properties provide challenges as well. With a soft economy limiting travel for many, visits by owners of the properties and travelers they could rent to when they’re not staying at the home will surely decrease. Areas which were overbuilt will also be vulnerable.

If there isn’t a turnaround in the economy, one solution that could mitigate at least some of these issues would be provided by home loan modifications. While the Obama Administration’s “Making Home Affordable” plan is not available for jumbos, there are many options being provided through law offices that negotiate home loan modifications for their clients. The Feldman Law Center, located in Mission Viejo, California, has successfully negotiated over 600 loan modifications for their clients. They can be reached at (800) 527 8497.

Author: Greg Feldman

About the Author:

Welcome to Loan Modification Help Center. Loan Modification Help Center has information about loan modifications and resources to help you with your home loan modification. We have lots of free news relating to loan modifications and the process to help you avoid foreclosure.

Article Source: ArticlesBase.com - Feldman Law Center - Are the Mansions of The OC Next?

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Citimortgage Loan Modification Experience

Question: Loan Modification Question?

Has anyone applied for a loan modification with CitiMortgage? I would like to hear some experiences and if there are many steps to complete?

Answer: Your best option may be a refinancing transaction. Loan modification programs are best brokered by a third party. Check with your local government and see if there is a free service to help you. Otherwise, you might check the internet. Sometimes a loan modification broker can help and won't charge you, the customer. They take a percentage of the loan amount at the end. Don't pay any fees for this help. You should be able to find it for free.

Don't be surprised to find that CitiMortgage is not cooperative. They are having bad financial problems right now. Try three calls, then redirect your quest as noted above.

Richard Branson Brother "BuBu" view on Bank Loan Modification plan for Homeowners

Loan Modification Missouri

For many, this is the toughest question to answer. It is easy to think that if you aren't behind on all of your bills and are still managing payments, then you aren't in trouble. But, how are you managing these payments? Are you putting your necessities on your credit card? Are you taking out more loans to pay off the debts you already have?

Whether you are in financial trouble or not depends on a few factors. How do you feel about your current situation? Everyone handles stress differently and some people, though they aren't in as much debt, need help quicker than others. Are you telling yourself the truth? Being honest with yourself is hard. It requires you to face some facts that you may not be prepared to face. If it is a struggle to pay your monthly bills with your paycheck, you may want to ask yourself the hard-to-answer questions. Let these questions guide you into an open and honest discussion about the truth of your financial situation. If you answer yes to any of them, you may need to start looking at options for help.

Are you spending more than 20% of your paycheck on credit card bills?

Are you dipping into your savings just to get your monthly bills taken care of?

Are you putting things like groceries, mortgage payments, or other necessities on your credit card because you don't have enough money to pay for them?

Do you have more than 2 or 3 major credit cards?

Are you getting overdue bill notices?

Have you been denied additional credit?

If you are being honest with yourself, the answers to these questions might surprise you. You can ask more extensive questions and figure out what your next move should be by searching for free information from experienced attorneys in your area.

What can you do if you are in financial trouble? While it may seem that there are many options out there, some have proved to help people better and more thoroughly than others. Loan modification may help temporarily but, in the current economic climate, they aren't easy to come by. If you are one of the lucky few to get a modification, it may actually help you. If you are behind on your payments, the lender may roll your late fees and missed payments into your new balance, leaving you with a higher balance and higher payments than before the modification.

Debt settlement is also an option but it comes with hefty upfront fees and no guarantee of protection. Bankruptcy comes with the protection of federal law—stopping your creditor calls, wage garnishments, repossessions, and even foreclosure while it also helps you eliminate your debt. To find out if bankruptcy is right for you, start by looking up free information. Most bankruptcy attorneys will talk to you for free the first time—and talking to an experienced attorney may give you the right information to make sure you can really get the relief you need.

About the Author:

Missouri Bankruptcy attorney James Brown has been working to relieve the debt of average, hard-working American families for over 15 years. He has dedicated his career to educating consumers about their options for debt relief and has consequently released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." You can find more information by visiting his website at http://www.CastleLaw.net .

Article Source: ArticlesBase.com - Are You in Trouble with Your Debt?

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