Upside Down Mortgage

Archive for September, 2009

Mortgage Modification September 2009

Many homeowners are able to solve their financial problems by accessing President's Making Home Affordable (MAH) plan. The MHA plan officially became law on March 4, 2009 and now millions of homeowners across America who were facing foreclosure have a way to save their homes. The plan also creates a lot of questions about the difference between loan modification and FHA refinancing.

You should know that a MHA plan is only accessible for homeowners who have mortgages backed by Freddie Mac or Frannie Mae. There are other plans that work with other types of loans, but they are not as easy to access, apply for or get as the MHA home loan modification plan. The government is trying to find a way to have the MHA cover more loans.

If your hard times are due to the economic recession in the United States, you are in good company. A lot of people are having trouble paying their mortgages and there are two things they can do in reaction to this. They can modify their loan using the MHA plan or they can check out FHA refinancing. What one you choose is dependant on who insures your mortgage loan. If you do not know who this is, call your lender and ask.

If you have a FHA loan, you can access the HOPE for Homeowners program. This program allow homeowners who do not qualify for more traditional methods of refinancing, a way to get it. In the past, homeowners have had to have 20% equity to qualify for refinancing, but recently, in a falling market, people have actually lost equity. This is not the fault of the homeowner and HOPE for Homeowners acknowledges this. In order to obtain this type of refinancing, homeowners must participate in equity sharing if they want to avoid foreclosure.

Equity is how much of your mortgage loan you have paid off. HOPE for Homeowners requires those who refinance under this plan to split their equity with them when the house is sold. If you sell your house within the first twelve months of refinancing the FHA gets all of the equity. If you sell it after five years they get half. This plan can be accessed until September 20, 2011 through the FHA.

If Frannie Mae or Freddie Mac insures your loan, the MHA will handle your loan modification. If you are paying 31% or more of your gross monthly income on your mortgage, you are able to apply for a loan modification to get your mortgage payments reduced to something you can afford. There is a set procedure for a loan modification. They begin by reducing interest rates until they hit 2%. When a lender approves a loan modification, they get an incentive payment from the government as a reward. Borrowers are also given an incentive if they pay their modified payments on time. They also get to keep their house.

Both a loan modification and FHA financing can help you avoid foreclosure and allow you to stay in your house. This article has outlined how to decide between the two options.
About the Author:

For essential tips and facts about how to get approved for a Loan Modification, Visit our simple, no nonsense loan modification guide and resource: http://MortgageModificationLoan.net/

Source - Comparing Loan Modification and FHA Refinancing

snsquotes's webcam recorded Video - September 07, 2009, 09:59 AM

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Loan Modification Loan To Value

Question: How can I lower my mortgage if I make enough money to pay for it?

My loan to income ratio prevents me from doing a modification and my house is below its value so I can't refinance to lower my monthly payment. Is there anything I can do other than walking away from my loan to make my situation better?

I am seeking to either lower my monthly payment by a loan modification so I can rent my property.

Thanks for your answers in advance.

Answer: You are in a difficult situation but one option is to extend the term of your loan Usually a loan is for 25 years but some will increase this to 40 years this will reduce your outgoings.You need to talk to your mortgage supplier a longer mortgage will benefit them because they earn more in interest it will benefit you because of lower monthly payments and in the long term the value of your property should exceed the amount of loan.Also try and get a repayment mortgage where some of the capitol is paid off when you make a payment over time this will reduce your mortgage payments.Of course this relies on interest rates remaining stable as any increase in base rates means an increase in mortgage costs. Walking away is the last thing you want to do .But meeting and talking to your lender is the best way forward

Net Present Value and Loan Modifications

Subprime Mortgages And Race

Question: Could Al Queda have convinced race hustlers and dems in the 90's to force companies to make subprime mortgages?

In order to create the financial crisis we have now?

Possible.
I guess I should have said "community organizers" instead of race hustlers. Either way, they threatened banks with charges of racism if they didn't write loans to people who CLEARLY shouldn't have had them.

And now here we are.
It's well documented Boss.

Answer: It started way back, but Clinton had his hands all over it.

Anything is possible.

Boss- do research, ACORN, Barney Franks, Chris Dodd, Maxine Waters, Clinton de-regulated the banking industry further in order to get those loans out there. The neighborhoods the banks were in complained that the banks needed to give loans in those neighborhood, (sometimes the poorest) The government insisted with Fannie Mae and Freddie Mac

Look into Non-income verification loans---they are now illegal in Ct. You didnt need to provide any paystubs, no tax records

Hearing on Subprime Mortgages: Clay on Race