Upside Down Mortgage

Archive for September, 2009

Mortgage Relief Advocates

You bought what you thought would be a great long term investment, and maybe you put very little money down hoping values would continue to climb. Then the housing bubble popped and your home value took a huge downturn, especially in California housing markets, Florida Housing markets, and Nevada Housing markets. If this is your situation, you are like many Americans making mortgage payments on a house that is worth less than you owe. The temptation to walk away from your mortgage and have the bank foreclose on the property may be strong. You may not have considered however the long term implications of a foreclosure.

The housing market downturn is similar to cycles in any other investment vehicle in which there are both up and down cycles. Although the values may be declining now, once the credit market shake-up has run its course, values will likely start climbing once again. This will happen once there is more liquidity in the financial marketplace and banks are focused on loaning money for mortgages once again. You must ask yourself if you are walking away from your mortgage because you cannot afford it, or because you just don't like the fact you are upside down in terms of valuation.

Defaulting on your mortgage and allowing the bank to foreclose on the property has many short and long term ramifications you may not have considered. The first of which is you will unlikely be able to get a new home mortgage, refinance, or any other type of home mortgage for a minimum of five years. A foreclosure on your record is an automatic disqualification to any potential lender in giving you a new mortgage loan, and is actually federally mandated under recent laws passed by the senate in an effort to get home owners to work with their lenders. Next, consider what missing 6-8 mortgage payments and the subsequent foreclosure will do to your credit score. If for example you have perfect 700+ FICO scores now, you will come out the other end with high 400's to low 500's FICO scores and the foreclosure could impact your credit for as much as 10 years. Additionally, Landlords may be unlikely to rent to you as you will now have a proven history of not paying for your housing costs. You will likely need to come up with $4000 - $8000 dollars to move into a new rental unit, calculating first and last month's rent plus security deposits. There are also moving costs to consider, the increased amount you will pay in taxes by not having the mortgage deduction, and the fact you will receive a 1099 and may have to pay taxes on the amount of money your lender needs to write down on the property. There are no free rides here and the average first year cost to a consumer who gets foreclosed on is over $26,000.

One option you may consider is using an Attorney to negotiate with your lender to acquire a Loan Modification or Principal Write-down to get some mortgage payment relief. Attorneys can negotiate with your lender on your behalf to lower your interest rate or even reduce principal balance in some cases if your are experiencing financial hardship. In speaking with California Real Estate Attorney Marc Bonanni of Consumer Debt Advocate ( http://www.consumerdebtadvocate.net ), a law firm specializing in just such Home Loan Modifications and Loss Mitigation in all 50 states, Marc told me that " We have been very successful in working with lenders to get them to modify the term of existing loans, lowering interest rate and monthly payments to one the borrower can afford, and even getting lenders to forgive past due balances or principal balance with forbearance agreements to avoid the foreclosure process. It all is predicated on the true financial hardship we can prove to the lender and if there were any Truth in Lending violations or Predatory Lending violations on the original loan. Mortgage fraud has been rampant, specially with sub-prime borrowers and our success rate has been excellent in the loan modification process".

In researching loan modification companies, this writer has also found that there are a lot of predators out there and many debt settlement companies and mortgage companies have gotten into the loan modification business. Unfortunately, these companies are collecting fees but have very little leverage with the lender and will soon be regulated out of existence due to their predatory practices. Only use an attorney or HUD approved foreclosure counselor for assistance in this process, and beware of companies who state they are "Attorney based", Attorney backed", "Foreclosure Consultants", or "Attorney Assisted" as these are not actually law firms and cannot guarantee your legal rights in the process as you are not actually retaining an attorney. Due your diligence is this area before hiring anyone to help you negotiate with your lender.

Before you decide to walk away from your property and allow it to be foreclosed on, we feel it is important to consider all of the short and long term credit and financial implications of doing so. It is also important to act quickly before saving your home is too late, as once the lender sends you a Notice of Default, you may have incurred thousands of dollars in legal fees that will make the negotiation process that much more difficult to achieve.

About the Author:

Bill Baskin is a nationally recognized expert on Mortgage, Credit, Automotive, and Debt topics, having been a quoted source on a variety of newspaper, radio, and television pieces. He currently writes for

http://www.consumerdebtadvocate.net
on consumer education pieces.

Source - Many Consider Foreclosure as Home Values Drop

Taxes on Short Sale, Loan Modification & Mortgage Foreclosure 4 Nov08 Interest Rate & Payment

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Mortgage Fraud Detection And Prevention

If you are applying for a credit card, mortgage, car or personal loan, you should be familiar with the information included in your credit report. You are issued a number, known as a FICO score, which is calculated based on your previous payment history, number of debts with a balance, recent credit inquiries, and balance to available credit ratio.

Many consumers are aware that they can obtain a credit report, for a fee, from the three major credit reporting agencies. These include TransUnion, Experian and Equifax and they provide your credit report to loan officers, credit card companies, financial institutions and anyone whom you give permission to obtain a copy of your credit file. While many consumers know that credit reports can be obtained for a fee, many do not know that everyone is entitled to a free copy of their credit report from each of the 3 credit bureaus each year. Once every 12 months, you can visit http://www.AnnualCreditReport.com and gain instant online access to your free credit report.

When looking at a copy of your credit report, you will be able to view payment histories as submitted by each of your creditors, current and previous addresses along with any information included on public record. This may include civil judgments, bankruptcy or foreclosures, etc. If any of the information contained in your credit file is incorrect, you have the right to dispute that information directly with the credit bureau. At the time a dispute is submitted, the credit reporting agency will investigate and correct any errors that are made.

Additionally, if you are turned down for credit at any time, the creditor must provide you with a written reason for the decline. At that time, you may request a free copy of your credit report from the agency that provided the information to the creditor. By sending a copy of the denial letter to the credit reporting agency, they are then required to provide you with a copy of their entire file relating to you and your credit history.

It is recommended that consumers check their credit file every 6 months to ensure that information is accurate and to prevent or detect identity theft. If you notice an invalid address or credit line that you never applied for, this is an indication of possible identity theft and should be dealt with immediately by calling the credit bureau and having a fraud alert placed on your file. An informed consumer is a happy one.

About the Author:

Daphne is a Writer, Business Owner, Motivator and Self-Starter and full-time Mom. She enjoys writing articles about small businesses and family and tries to motivate other women with the same desires. She can be reached at 1-877-TOY-DIVA http://www.daphnespassion.com

Source - How To Get A Free Credit Report

Pimpin' For Acorn 3

Bankruptcy Judges Modify Mortgages

Question: Obama or McCain. Your money on fighting foreclosure?

McCain:
· Give homeowners the chance to have their loan modified, provided they meet certain criteria.

· Offer of financial assistance to borrowers contingent upon lending reform.

· Provide more funding for community development groups so they can expand their home rescue efforts.

Obama:
· Allow troubled homeowners to refinance to a loan insured by the Federal Housing Administration.

· Allow subprime borrowers to challenge foreclosure proceedings if they've been subjected to abusive lending practices.

· Create a 10% tax credit for homeowners who do not itemize their taxes.

· Create a $10 billion fund to help victims of predatory loans.

· Create a separate $10 billion fund to help state and local governments maintain critical infrastructure.

· Authorize bankruptcy judges to reduce mortgage principal.

Answer: HE IS ANOTHER BUSH. OBAMA !!!!!!!!!!!!!!!!!!!!!!!!!

The "Cramdown" Mortgage Bill