Upside Down Mortgage

Posts Tagged ‘Recession’

Loss Mitigation Application

Recent legislation at the state and federal level as well as some recent bank takeovers by the FDIC have made loan modification application rates soar. Unfortunately, most consumers on their own are having little to no success modifying their loan, unless it is just a forbearance agreement in which the lender allows the borrower to pay back any monies that are in arrears over time. This is hardly a loan modification and the late payments a have already adversely affected your credit and make it impossible for you to refinance.

Unfortunately, most companies that are not law firms can only get you a forbearance agreement, and they do nothing to protect your rights, so make sure you have loan modification attorney represent you with your lender to protect your legal rights. In fact recent legislation enacted in California Loan Modifications requires that a lender must give you a modification review prior to foreclosing on your property, and the consumer may only be represented by an Attorney for HUD approved Counselor, or they give up many of their rights in a foreclosure. Many of the "Attorney Based" or "Attorney Backed" companies actually are not law firms nor will you be represented by legal counsel and could give up many of your legal rights by using such a company. The banks will not modify willingly and only an attorney can protect your rights and apply the right kinds of pressure to a Lender's legal department to get you the result you are looking for. Even HopeNow, a free service that offers counseling to consumers is so mired in backlog, most consumers homes will be foreclosed on long before they get help.

"If you are looking to modify your loan, be prepared to have a truthful and honest about both the reasons for your financial hardship as well as your true financial picture" says Marc Bonanni, Attorney for http://www.consumerdebtadvocate.net. . "Be prepared to provide documentation as back-up. Properly preparing a case to take to your lender in the loan mitigation process is critical, and properly structuring the mitigation proposal off the information you provide is a key aspect of preventing foreclosure" says Marc.

It is also important to understand that you must meet strict financial guidelines to even be considered for mortgage mitigation. If your financial picture is so dire that you are still financially encumbered even with a 1% interest rate, it is unlikely that you will be able to save your home from foreclosure. If your lender feels they will take less of a loss if they foreclose now because there is uncertainty that you can meet your new modified loans structured payments, they would rather foreclose now to lessen their loss.

There are three key elements in any loan modification or loss mitigation process. Each is an area to negotiate depending on the borrower's unique circumstances. The first would be adjusting the interest rate of the first or second mortgage to a lower one that would be manageable by the consumer. The second would take into consideration any missed payments and penalties that are in the arrears, and structuring a repayment plan or putting those monies on the back of your loan. The third and most difficult is if your loan is now worth more than your property. Getting the lender to write down principal balance can happen in the right circumstances, especially if there are predatory lending issues involved in your case, but don't expect your lender to make you whole on your bad investment decision. Again, preparing the right argument is key and expect the negotiations to take 45-60 days at a minimum. It is an intense process and the Loss Mitigation departments at most lenders are understaffed to meet the monstrous demand of consumers who are vying for their attention from everything from late payments to foreclosures. Again, most attorneys can bypass the loss mitigation department and work directly with your lender's attorneys, so this is still your best bet for success in the loan modification process.

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 - What You Need to Know About the Loan Modifcation Process

LOSS MITIGATION EXPRESS-SALES PRESENTATION.WMV

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Predatory Lending Recession

Writing a hardship letter to your mortgage lender may be the only chance you have to save your home from foreclosure. You must have a valid hardship to qualify for any type of loss mitigation. A hardship letter is a detailed explanation of a hardship in your life that has caused you to fall behind in your financial obligation to your mortgage lender. In your letter, outline the specific details of your reason for default along with supporting documentation. Your hardship must be temporary and you must now be in a position to begin making payments on your mortgage.

Important information you will need to write a letter of hardship include:

• Date
• Loan Number
• Reason for Default – Hardship
• Supporting Documentation
• Detailed events
• Dates of Events
• Your proposed outcome – what you would like to happen
• Documents supporting end of hardship

Some valid reasons for hardship that will be accepted in a hardship letter include:

• Death of Borrower
• Death of spouse or family member
• Unemployment
• Decrease in working hours
• Elimination of overtime or second job
• Involuntary job relocation
• Increase of expenses due to short term unemployment
• Mandatory pay reduction
• Decline in earnings for self employment
• Failure of business
• Short term or permanent disability
• Increase in expenses due to illness
• Divorce
• Incarceration

Keep your letter detailed and to the point.

Top Reasons Homeowners Fall into Foreclosure:

1. Loss of Job/Economic Recession – Many times circumstances are beyond the homeowners control like a job layoff due to downsizing or business closing or a slowdown in the economy.
2. Predatory Lending – Some lenders will approve buyers for amounts that are greater than they can really afford with high interest rates or with adjustable rate mortgages.
3. Divorce – Typically, a spouse is awarded the house in the divorce and can’t afford the payments on one income. Divorce rates are high; therefore this has become a common reason for foreclosure.
4. Medical Illness – Unexpected medical illness can cause great financial hardship but are a necessity. Medical expenses can cause you to fall behind in your mortgage.
5. Buying a Home Before Sale of Existing Home – Impatient home buyers will sometimes buy a new home before they sell their existing property. Having to pay two mortgages can cause a financial hardship.

About the Author:

Samples and information about letters of hardship to prevent or avoid home foreclosures.

Source - How to Write a Hardship Letter to Avoid Home Foreclosure

Blacks & Latinos Are Still Victims of Predatory Lending Part II (VIDEO)

Mortgage Relief Program 2009

Stop and think for a second before going ahead and filing for bankruptcy. There are loads of consequences that will erupt in doing this. Any credit that you have left even if you have bad credit already because of your backlog of debt, it will get worse. You will be left to pick up all of the pieces and start all over again.

If you go through your finances and figure out where you need to help most, then compare them to the government grants that are now available from the Federal Government. It may be possible to apply to some of these instead. You will not have all of your debt removed like bankruptcy would, but you would still have some kind of credit left. It takes at least seven years to be able to regain credit after bankruptcy. If you are using grant money, it would take less than half the amount of time to get a good credit rating if you keep making payments on the debt that you are left with after the grants are used.

Some of the grants available to the public include those used for small-business, education, low-income or debt consolidation, as well as for mortgage repayment. These are just four of the areas that could help you. Applying for these can change your financial position dramatically and eliminate the need to file for bankruptcy. There is information regarding these all over the internet if you look for it. This can be a great opportunity for you so just give it a thought.

About the Author:

**Update**
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Source - Obama's New Debt Relief Program For 2009 Gives Away Free Grant Money To Pay Off Your Debt

Dr Ronald [Ron] Paul Congressional Minutes in the first quarter 2009