Mortgage Guide

Loan Modification Help Center asked:


The Wall Street Journal reported in July, 2009 that President Obama is now expanding the plan to help the number of borrowers who can refinance their homes.  The administration said that borrowers with mortgages worth up to 125 percent of their home’s value will now be eligible to refinance under its program, up from a 105 percent limit.

According to the new plan, borrowers must be current on their mortgages and have loans owned or backed by government controlled mortgage companies Fannie Mae or Freddie Mac.  One of the challenges with the government plan is that it does not help those who are in severe circumstances, either behind on payments or facing foreclosure.  The plan does expand the opportunities for those not facing foreclosure to get help, but if you are in the midst of a foreclosure proceeding or if you just received a foreclosure notice, you need some other form of assistance.

The government is hoping that by raising the percentage, many more Americans will be assisted in getting the help they need to stay in their homes.  Recent statistics state that almost 30 percent of American homeowners with mortgages owe more than their homes are worth (according to Economy.com).  The government’s initial plan seems to have fallen short of expectations as only 20,000 people were able to participate in the program, well short of the 4 million it was projected to help.  In fact, as late as April the government was denying there was any need to expand the program.

Interest rates have actually been rising of late, making things even more difficult for Americans.  Rates on 30 year fixed rate loans currently average 5.49 percent, up from a recent low of 4.84 percent in April.  Government agents hope that this plan will also lower the overall risk for Fannie Mae and Freddie Mac by allowing more people to stick with their mortgages and not default.

Loan modification attorneys are still working tirelessly, throughout California, to help people renegotiate the terms of their loans and get a better mortgage payment.  While the government is having a hard time with their refinancing program, California loan modification attorneys are spending morning, noon and night keeping people in their homes through California loan modifications.

A loan modification renegotiates the terms of your home loan, helping you get lower payments that you can actually pay.  Rather than see your home go through foreclosure and having to move, you can enjoy a new level of financial freedom as well as a renewed outlook on life.  With the unemployment rate in America continuing to rise and the financial future in doubt for many Americans, now may be the time to take advantage of a loan modification.  A loan modification attorney can work with you to get the best deal possible, and make sure that your interests are focused upon.  Lender driven loan modifications focus on the lender’s needs, and even some government programs focus on the government’s bottom line.  A loan modification attorney can represent you and you alone.



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yanni raz asked:


If you are at risk of losing your home and you want to avoid foreclosure there are many things you will need to do.  These things include talking to the lender about mortgage help, proving your financial situation, and more.

Mortgage help is available for most people who want to avoid foreclosure but they are experiencing some hard times.  If they are getting back on track or they already are back on track but behind on the payments the lender may provide assistance in the form of loss mitigation.

The most important thing you must consider if you are about to foreclose or you have missed a payment is to stay in touch with your lender.  Let them know that you intend to keep your home.  Let the lender know you intend to stop foreclosure now and you are willing to do everything you can.  If you do not keep in touch with the bank they will assume you want to foreclose and even expedite the process.  To slow the process or avoid foreclosure you must remain in touch with the bank throughout the entire process.

If you suffered through a layoff or some other extenuating circumstance which is what caused you to become behind on your payments you should talk to the lender about this.  If you can prove to the bank you are behind because of a setback like something like this they will provide mortgage help.  Some banks may offer a loan modification while others will allow you to begin making your payments as if you never missed one.  The back payments and fees will be added to the lifetime of the loan and extend the loan by a few payments.

Your financial situation will be considered when you want to stop foreclosure now and you have missed a payment or two.  When you are working with the bank to be considered for a form of loss mitigation they will want you to prove you can afford to pay your payments.  If you have gone through a divorce and now have only one income this may be the most difficult part.  Be sure you are prepared to show the bank you can afford your home mortgage payments to avoid foreclosure.

If you are seeking mortgage help to stop foreclosure you will need to work with your bank.  Be sure you keep them up to date on everything.  Pay whatever you can and be sure the bank is entirely aware of your situation.  This will help you stop foreclosure now and convince a bank why they should consider you for loss mitigation in the form of a loan modification or something else.



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The House Team Of Mortgage Intellingence asked:


Congratulations! You’ve decided you’d like to become a homeowner.

It’s a big responsibility, but one that comes with many rewards: both emotional and financial. But there’s some emotional and financial investment that comes first.

Yes, a home purchase is going to be among the biggest and most important financial decision you’ll ever make. The good news is that you’re part of a very lucky generation of homebuyers. Lending rates are probably lower for you than they would have been for your grandparents.

We’ve become so accustomed to low lending rates that it’s hard to remember that homebuyers struggled with lending rates of almost 20% in the bad old days of the early 80’s! And today, a whole range of flexible mortgage options make the leap to home ownership financially painless.

What it takes is just some planning and commitment. But here’s a quick-start guide for aspiring home owners:

1. Educate yourself.

You can actually start off by talking to a mortgage broker  who are generally great at “plain talk”. They can help familiarize you with the legal and real estate lingo, because, face it, those industries seem to have a language all their own.

Or if you’re web-savvy, try looking up real estate or mortgage glossaries online, to help you move into a purchaser’s comfort zone. A good website for the beginner is the CMHC (Canada Mortgage and Housing Corporation). It covers the basics  and more. Visit their website here www.cmhc.ca

2. Be aware of the importance of a good credit rating.

Mortgage lenders will definitely check your credit profile and when they do, you want to be sure that everything looks great. Not sure what your credit rating even looks like& or if you even have one?

Go to www.equifax.ca, which can tell you everything you need to know about what a lender might find when they check out your profile.

The higher your credit score, the better financing you will receiveamount and interest. The basics: you need to prove you know how to pay money back. That means you should always pay your bills on time and preferably in full.

One or two credit cards, regularly used and paid up, can help you establish credit. A mortgage broker can offer more tips on building a good credit rating quickly.

3. The right mortgage can save you thousands of dollars.

Your bank will want your mortgage of course, because it’s good business for them. But the bank represents only one lender choice. An independent mortgage broker can have access to more than 60 lenders, including most of the banks.

Best of all, they don’t work for the lender; they work for you. You don’t pay anything extra for their services; the lender who gets your business pays them a commission, since that lender didn’t have to pay a staff person to stand at a wicket to get your business. Mortgage brokers are a wealth of information, and they’re usually very easy to talk to.

You want someone who will take the time to understand your situation, and who doesn’t think your questions are dumb. This is an important decision; you have a right to know what it’s all about.

4. Get pre-approved.

We can’t emphasize this enough. Find a mortgage broker that you trust. He or she will have the maximum number of options for you. Don’t have a downpayment?

That may not be a problem; there are excellent options now for homebuyers who haven’t saved up a downpayment. The important thing is to look at the mortgage before the house. Your Ontario mortgage broker can help determine the amount of mortgage money that you are qualified to borrow, and you’ll ensure the right budget for things like closing costs too.

A letter of pre-approval is an enormously handy document to have in your pocket before you start to view houses. And if you get in a bidding war on the home of your dreams, it’s good to know your limit, since it’s easy to be swept up in the excitement. Get pre-approved. Did we mention that?

5. Location and planning.

Armed with your pre-approval, you can be practical and reasonable about how much house you can afford. Stay within your means, and focus on making the best possible home selection  not just for the investment potential, but for the quality of life you want to enjoy. For both, location will be a key consideration.

Many real estate experts still agree that the best real estate values can be found by selecting the least expensive house in a good neighbourhood. You’ll enjoy and benefit from the value of the neighbourhood, without really paying too much extra for it.

A desirable and stable location is the place to invest your money. Can’t afford the house of your dreams yet? Take the long view. Your dream house is in your future, but most of us have to work our way up the real estate ladder.

Remind yourself that the decision to buy a house has its emotional rewards too. A house is not just a house. It will soon become your home. Happy homebuying!



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rachel asked:


We are going through a mortgage broker and 3 days ago filled all the paper work in to apply for our mortgage. How long does it take for a decision to be made. We are first time buyers and really anxious on the outcome!!!!!
Thanks guys for your answers. Im talking about the process of the bank deciding if your a suitable candidate to loan the mortgage to ?

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asked:


Seems to me that PMI is very costly for the home owner, especially me with a perfect credit rating and new funding source to maintain a mortgage if I lose my job (my job is very secure). Please any suggestions on how to get the PMI waived by the mortgage company.

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Christopher asked:


The recession was caused by people being unable to pay back their home mortgages because the mortgage rates were too high?

Banks were not getting their money back from home owners, causing a credit crunch, thus they were unable to lend money to big businesses.

Big businesses then had to cut back on expenses and began to lay people off the the thousands.

So what caused the mortgage rates to go up so high that started this financial mess in the first place?

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Florida Mortgage asked:


 

 FHA CREDIT Qualifying

 ANALYZING THE FHA Mortgage applicants  Credit History

 Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA loans were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

Easier Credit Qualifying Guidelines such as:

  No minimum FICO score or credit score requirements. FHA will allow a home purchase 1 year after a Bankruptcy. FHA will allow a home purchase2 years after a Foreclosure.

To take advantage of the FHA program in Florida, Visit

www.FHAmortgageFHAloan.com

Past credit performance serves as the most useful guide in determining a borrower’s attitude toward credit obligations and predicting a borrower’s future actions. A borrower who has made

payments on previous and current obligations in a timely manner represents

reduced risk. Conversely, if the credit history, despite adequate income to support obligations, reflects continuous slow payments, judgments, and delinquent accounts, strong compensating factors will be necessary to approve the loan.

 

When analyzing a borrower’s credit history, examine the overall pattern of credit behavior, rather than isolated occurrences of unsatisfactory or slow payments. A period of financial difficulty in the past does not necessarily make the risk unacceptable if the borrower has maintained a good payment record for a considerable time period since the difficulty. When delinquent accounts are

revealed, the lender must document their analysis as to whether the late payments were based on a disregard for financial obligations, an inability to manage debt, or factors beyond the control of the borrower, including delayed mail delivery or disputes with creditors.

 

While minor derogatory information occurring two or more years in the past does not require explanation, major indications of derogatory credit–including

judgments, collections, and any other recent credit problems–require sufficient

written explanation from the borrower. The borrower’s explanation must make

sense and be consistent with other credit information in the file. Neither the lack of credit history nor the borrower’s decision not to use credit may

be used as a basis for rejecting the loan application. We also recognize that some prospective borrowers may not have an established credit history. For those borrowers, and for those who do not use traditional credit, the lender must develop a credit history from utility payment records, rental payments, automobile insurance payments, or other means of direct access from the credit provider. The lender must document that the providers of non-traditional credit do, in fact, exist and verify the credit information. Documents confirming the existence of a nontraditional credit provider may include a public record from the state, county, or city records, or other means providing a similar level of objective confirmation. To verify the credit information, lenders must use a published address or telephone number for that creditor. As an alternative, the lender may elect to use a non-traditional mortgage credit report developed by a credit-reporting agency, provided that the credit reporting agency has verified the existence of the credit providers and the lender verifies that the non-traditional credit was extended to the applicant. The lender must verify the credit using a published address or telephone number to make that

verification.

 

The basic hierarchy of credit evaluation is the manner of payments made on

previous housing expenses, including utilities, followed by the payment history of installment debts, and then revolving accounts. Generally, an individual with no late housing or installment debt payments should be considered as having an acceptable credit history, unless there is major derogatory credit on his or her revolving accounts.

 

When reviewing the borrower’s credit and credit report, the lender must pay

particular attention to the following:

 

A. Previous Rental or Mortgage Payment History. The payment history

of the borrower’s housing obligations holds significant importance in

evaluating credit. The lender must determine the borrower’s payment

history of housing obligations through either the credit report, verification

of rent directly from the landlord (with no identity-of-interest with the

borrower) or verification of mortgage directly from the mortgage servicer,

or through canceled checks covering the most recent 12-month period.

 

B. Recent and/or Undisclosed Debts. The lender must ascertain the

purpose of any recent debts, as the indebtedness may have been incurred

to obtain part of the required cash investment on the property being

purchased. Similarly, the borrower must provide a satisfactory

explanation for any significant debt that is shown on the credit report but

not listed on the loan application. The borrower must explain in writing

all inquiries shown on the credit report in the last 90 days.

 

C. Collections and Judgments. Court-ordered judgments must be paid off

before the mortgage loan is eligible for FHA insurance endorsement. (An

exception may be made if the borrower has agreed with the creditor to

make regular and timely payments on the judgment and documentation is

provided that the payments have been made in accordance with the

agreement.) FHA does not require that collection accounts be paid off as a

condition of mortgage approval. Collections and judgments indicate a

borrower’s regard for credit obligations and must be considered in the

analysis of creditworthiness with the lender documenting its reasons for

approving a mortgage where the borrower has collection accounts or

judgments. The borrower must explain in writing all collections and

judgments.

 

D. Previous Mortgage Foreclosure. A borrower whose previous principal

residence or other real property was foreclosed or has given a deed-in-lieu

of foreclosure within the previous three years is generally not eligible for a

new FHA-insured mortgage. However, if the foreclosure was the result of

documented extenuating circumstances that were beyond the control of the

borrower and the borrower has re-established good credit since the

foreclosure, the lender may grant an exception to the three-year

requirement. Extenuating circumstances include serious illness or death of

a wage earner, but do not include the inability to sell the house because of

a job transfer or relocation to another area.

 

E. Bankruptcy. A Chapter 7 bankruptcy (liquidation) does not disqualify a

borrower from obtaining an FHA-insured mortgage if at least two years

have elapsed since the date of the discharge of the bankruptcy.

Additionally, the borrower must have re-established good credit or chosen

not to incur new credit obligations. The borrower also must have

demonstrated a documented ability to responsibly manage his or her

financial affairs. An elapsed period of less than two years, but not less

than 12 months, may be acceptable if the borrower can show that the

bankruptcy was caused by extenuating circumstances beyond his or her

control and has since exhibited a documented ability to manage his or her

financial affairs in a responsible manner. Additionally, the lender must

document that the borrower’s current situation indicates that the events

that led to the bankruptcy are not likely to recur.

 

A Chapter 13 bankruptcy does not disqualify a borrower from obtaining

an FHA-insured mortgage provided the lender documents that one year of

the payout period under the bankruptcy has elapsed and the borrower’s

payment performance has been satisfactory (i.e., all required payments

made on time). In addition, the borrower must receive permission from

the court to enter into the mortgage transaction.

 

F. Consumer Credit Counseling Payment Plans. Participation in a

consumer credit counseling payment program does not disqualify a

borrower from obtaining an FHA-insured mortgage provided the lender

documents that one year of the pay-out period has elapsed under the plan

and the borrower’s payment performance has been satisfactory (i.e., all

required payments made on time). In addition, the borrower must receive

written permission from the counseling agency to enter into the mortgage

transaction.

 



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Loan Modification Help Center asked:


The new housing plan announced by President Obama last week has two main parts.  First, there is a $75 billion loan modification plan and, second, there is a program that helps borrowers who are not in danger of defaulting refinance their mortgage.  

These are some of the key questions to ask to determine if you can benefit from the plan:

Do I have to fall behind on my loan payments to be eligible for a loan modification?

No.  Borrowers must simply demonstrate that they are in danger of falling behind on their mortgage and that they don’t have sufficient income to make future mortgage payments.  Borrowers with ballooning mortgage payments or interest rates that are resetting may benefit from the new plan.

What are the loan modification requirements?

To be eligible for modification under the plan, the loan must be a first mortgage on the borrower’s primary residence.  Borrowers must currently be paying more than 31% of their monthly gross income toward mortgage payments. Jumbo loans that exceed Fannie or Freddie loan limits are not eligible. Ultimately, your eligibility will be determined by your mortgage lender.

What if I am “under water” and my mortgage is more than the value of my property?

As long as the amount owed on a first mortgage does not exceed 105% of the home’s current value, borrowers with limited equity can refinance into a 30-year or 15-year fixed-rate mortgage.  This refinance option is open to only to borrowers with conforming loans that are owned or guaranteed by Fannie Mae or Freddie Mac.  Borrowers must show that they are current on mortgage payments and that they will be able to meet the new mortgage payments.

How do I know if my mortgage is owned or guaranteed by Fannie or Freddie?

The White House will release full eligibility details on March 4, when the program begins, and it is recommended that borrowers contact their lender at that time to see if their mortgage is owned or guaranteed by Fannie or Freddie.



Does my lender HAVE to participate in the program?

No. Participation by lenders is voluntary, but the government provides subsidies to encourage lenders to modify loans. For example, mortgage servicers receive $1,000 for each loan modification and can also get another $1,000 annually for three years if the borrower stays current on the loan.

To learn more about loan modification options, visit www.loanmodificationhelpcenter.org



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Andrew K asked:


I am filling out both H&R blocks and Turbo Tax’s online taxes and I noticed that the return amount didnt go up with either one when I add the amount of mortgage interest I paid this year. Why is that? Also, why is HR blocks return higher with the same exact information?

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