Upside Down Mortgage

Posts Tagged ‘foreclosures’

Indymac is my Lender. Loss mitigation reviewing my loan package. Should I call them or wait until they get back with me?

I haven't been late in my mortgage payments at all, but my mortgage value is 6k down from what we purchased it at 2 years ago. There are a couple of foreclosures on our street. My husband and I commute to the bay area. So with gas prices skyrocketing and twin daughters driving and going to college, I asked Indymac on June 26th to consider a loan resolution for us. I received a letter from Loss Mitigation dept dated July 7th that they are reviewing it and will get back to me within 30 days. Should I call them or wait for 30 days?

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Loan Modification Statistics 2009

In a move clearly targeting loan mod shops around the country, Sen. Charles Schumer said on June 2nd that he will amend a bill he introduced in early 2009 which initially focused on mortgage brokers doing loans and refi’s, to include loan modifications done by these brokers as well. Schumer’s bill, titled “The Borrowers Protection Act”, will now place restrictions on loan modification companies, mortgage brokers, and others who collect advance fees from struggling homeowners to modify their current mortgages.

New York Governor David A. Paterson also announced legislation that would ban advance fees paid to loan mod shops with the exception of attorney’s offices while Schumer’s amended bill will force loan mod shops to follow federal registration or licensing requirements and adhere to guidelines on truth in lending laws, fees, and marketing. The allowance for the continuing collection of advance fees by attorney’s offices should serve at least as an implied endorsement of their work in the loan modification industry.

Both bills seek to eliminate the shoddy and misleading marketing tactics often employed by loan mod shops that lure struggling homeowners into a loan modification process with guarantees of principle reductions, ultra-low interest rates, and other unsubstantiated claims.  These shops often spend the bulk of their time and effort on marketing and collecting fees but then spend little or no time on the loans they have been hired to modify. Both Schumer’s and Paterson’s bills are aimed at the shops that are taking advantage of homeowners by promising undeliverable results and then, simply, not delivering. The anger and vitriol on the issue comes from the fact that those homeowners not only lose the money that they paid in fees, they are often subject to foreclosure if they have fallen too far behind on their payments during the loan modification process. Another issue with the loan mod shops is that one out of every two homeowners that get their loans modified with them fall back into default within six months. Including homeowners that negotiate directly with their lenders, Fitch Ratings expects those default rates to approach 70% of all modified loans by the end of 2009

Schumer’s and Paterson’s bills, allowing for advance fees to attorney firms and disallowing them for all others, acknowledge the superior work done by the law firms in the area of loan modifications. While statistics are hard to come by, it is estimated that attorney driven loan modifications are two to three times more successful at keeping homeowners out of foreclosure than the loan mod shops and do it yourselfers. The reason for the huge performance gap is that attorney driven loan modifications result in greater concessions from the lenders, lowering mortgage obligations to a point where the payments fit into the homeowners’ budgets, allowing them to stay current on those payments. The loan mod shops and do it yourselfers, on the other hand, are much more likely to accept offers from their lenders  for modifications that are not sustainable for the short term, let alone the life of the mortgage.

"We always tell the client to always make a mortgage payment if you possibly can," said Kisha Wright, with the Long Island Housing Partnership.

About the Author:

Alex is a famous author who writes about Loan Modification. Loan Modification Help Center is a free resource for millions of people to find information regarding several topics related to loan modifications and resources to information.

Source - The Cream Rises in Loan Modifications

Vegas PBS Recession Rx June 8, 2009 Part 1

I have a problem and I need to see if someone can help me or at least has the answer or know where to get the information. This is my situation. In August, I moved out of my house. I moved to another state to be with my mom since she has health problems.

The problem to is that I am already in a payment program with the mortgage company for my house so that my mortgage won't get behind. I have no equity in the house because I had only been in it a year and I have no money to add for resale. I don't want the house to go into foreclosure because this will destroy my credit and I will not be able to borrow again (so people told me) so does anyone else know something that can be done? Please?