Mortgage Modification 101

The nature of the economy these days is having an impact on many people, including on their ability to continue to make their agreed-upon home mortgage payments. Many people are struggling to meet these payments, sadly. But there are a few programs they can take advantage of, including loan modification. What to know about this program can be important to those paying on a mortgage, in fact.

Unfortunately, many people assume, wrongly, that loan modification programs just aren’t available, either from their lender or because of their own particular circumstances. However, the federal government has entered the arena and begun a special program aimed at assisting those who want to stay in their homes do so. With a lower payment, though, many people are able to make their mortgage payments.

Understand, first of all, that these modifications are basically a way of asking the lender to completely change the terms of the loan. For the person holding the mortgage, it’s essential that the new terms are favorable enough to result in a lower monthly payment. Usually, this will mean that the lender is agreeing to write off a portion of the loan in order to lower the monthly payment.

It’s the case that most lenders wouldn’t normally be amenable to such an action but, with economic circumstances being the way they are, more are coming on board every day. They all understand that it’s better to get at least a little of a home loan than to get nothing at all if it goes into foreclosure, in other words. And, with the government now involved, lenders are a bit more at ease in doing so.

Many lenders have also set up their own private modification programs, which should come as welcome news. If a person holding a mortgage doesn’t qualify for the government version, he might be able to qualify for a private lender version. It might not have as generous a term setup as the government program, but it should still result in a lower payment nonetheless.

Every financial expert recommends that as soon as financial trouble is encountered the lender be contacted in order to get ahead of the problem. Lenders appreciate this simple step far more than most people realize. It could also net more favorable terms under a private modification program, though some lenders prefer that applicants miss at least one monthly payment before entering into a modification.

Another thing to understand is that all modification programs, even the government’s, require documentation of financial condition before any such program participation will be approved. Both government and private programs generally require some sort of hardship letter in which the reasons for why the modification is needed are laid out. Also; there needs to be enough income available to make payment.

Because the economy has caused many people to enter into financial hardship to one degree or another there are several home loan modification programs now in existence. Just remember that, to qualify for any of them, there will need to be enough income to show that payment ability exists. As well, contacting a lender well ahead of time may also help.

Looking for info on getting Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Mortgage Modification Tips

Has it been a long time since you studied inertia? Maybe never? Well, this high school physics principle can actually help you get a mortgage modification.

I coined this term to help my readers understand a basic tenant of mortgage modification reality. O.K., so it’s not a scientific breakthrough. It can still be important, right?

Your mortgage modification application file will tend to stay in motion until it is acted upon by another force. Then, once stopped, it will tend to stay that way! I know, this is heady stuff.

Here’s how it can help you to win a mortgage modification and improve your family’s budget. There is a force acting upon all modification applications that tends to stop them. It’s called overwhelmed. The banks are still overwhelmed with the sheer number of applications. All systems and processes are strained to the breaking point so it is logical for them to “stop, reject or send back for updates and corrections”, as many files per day as possible. This “rework” gets the file off their desks and onto someone else’s. AND, it becomes your problem, not the bank’s. You can’t let that happen to yours! Here’s what to do about it.

Your application has to be letter-perfect. Not only do you need to provide all the required info but you must also organize and present it in a way that is clear to an inexperienced and barely trained bank employee. You can hardly blame the banks…when was the last time YOU tried to hire/train 1000 people per month?Missing documents, unsigned 1040s, expired 4506-Ts and inadequate income documentation make it vulnerable to rework. Beyond that, even simple things like lousy copies, missing bank statement pages and illegible hardship statements can send your application to the rework heap.

8 Tips to get file inertia on your side:

1. Calculate and verify your income correctly. Notarize self-employed P&L, include annual award letters for SSI and EDD benefits, show calculations with explanations for monthly gross amounts and calculate recent 1099 income.

2. Show rental property correctly. This is especially important if you are applying for a HAMP modification on your primary residence.

3. Your front-end DTI (Debt-to-Income) must be right. This is the total monthly payment on the 1st mortgage (PITIA) divided by your gross household income. It must be greater than 31%.

4. Be sure your back-end DTI (total indebtedness as percent of gross household income) is no higher than 70%. Any higher and you will get bumped (or, at least reworked).

5. Check your credit report (get a free copy each year at www.annualcreditreport.com) to be sure all debt items are present and accounted for on your application.

6. At the end of your budget – after income taxes, debt payments and costs-of-livingyou should have about $0 left each month.

7. In order to be reviewed, seriously reviewed, you must be in default. Most require that you be more than 60 days late before they send your file to the collections department. That’s where you want it to be in order to get considered for a modification.

8. Put the whole application together as if you were there presenting it in person. Include a cover letter, a table of contents and notes to clarify anything that is not blatantly obvious (actually, even make notes expaining those things!).

Take these 8 tips seriously. They will get your application moving and keep it moving becasue of file inertia. There will be no way to slow it down! You can thank your high school physics teacher and me for the help!

Looking for street-smart tips on Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification This article, Mortgage Modification Tips has free reprint rights.

Mortgage Modification In 2010

In 2009 I spent a lot of time with clients trying to figure if they’d qualify for a mortgage modification. In 2010 it takes me about 5 minutes and is nearly 100% accurate. That’s because the banks, in their rush to streamline, have become so very standardized and predictable.

The Making Homes Affordable Program Guidelines have become the standards. All in-house programs are modeled after the MHA, although others are not nearly as rich and are even harder to get. But the guidelines have become universal.

Predictable – The sheer numbers of applications has forced the banks to routinize everything – including erroneous rejections – to a point where it is pretty obvious to us veteran loan mod freaks.

Homeowners will get a mod if 1) they have a typical hardship, 2) their loan qualifies (non-jumbo, closed before 1/1/09), their DTI and cash fflow ratios are correct, 3) they live in the home and are in default. Landlord need to have lowered exxpectations – but not totally without hope.

Now, just because you are qualified, don’t think your mortgage modification is guaranteed. In fact, that’s just the “table stakes” in this game! You have to know how to playand, that means getting an advantage over the thousands of competing qualified modification applications that are submitted each day. That’s right – thousands each day!

You should have the advantage of an insider, a street-smart advisor who has been at the game table for a long time. Someone who is unabashadly on your side – not a government entity and certainly not a bank employee or site. If you follow the advice of the government or bank sponsored entities you can only expect to get info tailored for the masses. That’s like going into a street-fight with training in only boxing. You are totally unprepared when the opponant kicks you in the ear! You’ll have to pay for such advice. But, you get what you pay for.

Looking for help withMortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification Check here for free reprint licence: Mortgage Modification In 2010.

Villains And Heroes In Housing Crisis

Millions of homeowners had high-paying jobs and lots of savings and lots of home equity when this economic mess started. Congratulations. And, a special “shout out” to those of you who still do.

Millions of other American homeowners had not achieved such a lofty place financially. Some of them are young and just getting started on wealth-building. Some are less fortunate, less well-connected. Some are in the midst of personal calamity like a divorce, death in the family or are really sick themselves. Some are committed to causes that distract them financially, you know, like church, the environment, animal care and protection, etc. And, some just have prioritieslike teaching or preaching or other fields…that just don’t pay very well.

Then there’s the millions of other American homeowners who foolishly believed that they could have it all – they participated in the scam that foolishly, greedily and sometimes fraudulently lenabled them to buy and occupy homes way above theri means. Their kids even went to schools in these better neighborhoods. Shocking, no? Unfortunately, no one is showing much sympaty to these folks.

Both heroes and villains abound in all three groups. My work in foreclosure-related consulting has put me across the dinner table and on phone lines with thousands of American homeowners in trouble. And, the vast majority of homeowners in all three groups are heroesAmericans just trying to extend our heritage of restlessness and hope for a better life for our families.

I bristle when I hear the industry tools pander to wealthy and smug viewers by blasting the vulnerable members of the financial lower class. Without a doubt I have met just as many villains across the $18K dinner table as I have across the $180 one. Palos Verdes villains are scarily-similar to Compton ones.

So, lighten-up on snootiness. Let’s clean-up the mess but be fair. The blame game should be blind to socio-economic class. Because the blame’s all around.

Need assistance with a foreclosure workout or want info about how to get a Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification This article, Villains And Heroes In Housing Crisis is released under a creative commons attribution licence.

Be Encouraged By Mortgage Modification Rejections

It’s just part and parcel of the mortgage modification process in 2010 – REJECTION! Lenders can’t deliver performance levels that satisfies anyone in spite of over two years of work and over eighteen months of financial incentives from the President’s Making Homes Affordable Modification Program (HAMP). Even well qualified applicants are getting rejected. Sometimes, more than once.

But, I have come to think that rejection is a very good sign! A review of my files over the past 6 months shows that not one single mortgage modification was granted without a prior rejection. That’s right, every one of the modifications I have completed for clients in 2010 has been rejected before being accepted. Even the ones that began with the encouraging Trial Modification resulted in a rejection of the Permanent Mod before final acceptance. Some of the mortgage modifications I have successfully managed were rejected as many as three times before we achieved the modification. Whew!

It’s hard enough to meet the challenging application procedures and follow-up effectively to keep your application on-track. To have to also escalate your rejections to supervisors, managers, Directors , Vice Presidents and CEOs and to contact your local congressperson, the regulatory agencies, the trade associations and even the press in order to get it done? This is tough stuff!

But, hey, quit with the whining! That is the way it is – so cope! You will get rejected for one of about two dozen common reasons. Sometimes I think they are posted as a type of “cheat sheet” on the computer monitors of new Loss Mitigation Agents. Things like “Your loan investor does not participate in modification programs”, “Failed the NPV calculation”, “Income too high”, “Your income is too low”, “You have too many assets”, “Your 4506-T has expired”, “Your Ratios are wrong”, “You did not provide updated docs”, “We need a note from your mommy (O.K., I made this one up!)”, and etc., etc., etc.

These reasons may be valid but all too often, they are simply erroneous, resulting from lender mismanagement of the file. Othertimes, they are patently untrue statements that slow or end the application process if you do not object. So, rather than be discouraged and give-up when you get rejected, press on. At least you’re not being completely ignored! Promptly get clarity on the reasons for rejection. Go through several agents (by simply calling back at different times) and then escalate to a supervisor if you must to get a straight answer. Then supply the missing documents, sign the updated form, or correct the typo on your income. Do whatever it takes to get them back on track. Request reconsideration when you submit the correction. If you have submitted a good and accurate application upfront, you will – eventually – get the relief that the mortgage modification programs are intended to give.

Take heart. What is worse than rejection is the months of total disregard and that most of us get in the mortgage modification process. It’s not likely to change anytime soon. Mortgage modifications will continue to be a great way to throttle the foreclosure rate and they are a great way for homeowners to get some relief. It’s just taking a lot more perseverance and nerve than it should!

Need help with your ownMortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Loan Mod Problems – Escalate Em!

Sometimes waiting in line is smart. Like, for instance in the security line at the airport. However, if you are waiting in line for a loan modification, you’re nuts. In the line ahead of you are hundreds of thousands of frustrated homeowners just like you. Instead, you’ve got to get “Out-of-Line” and up to the front of the line. That’s right. Take cuts!

In the current Loan Modification Frenzy, the “line” is too long. Hundreds of thousands are in the queue ahead of you with more than 50,000 added per week. The banks can’t staff and train and manage and retain nearly enough workers and the systems and procedures are overwhelmed as well. Add to that the fact that the banks are only begrudgingly cooperating with the effort – and you have a formula for frustration and failure.

The front 4% of the line are getting good modifications. So, copy the winners, How do they do it? They get out-of-line and do extraordinary things. Previously I have described ways winners craft their applications and follow-up on the application to use what I call File Inertia. Let me now describe the way they escalate problems.

Because problems are an inevitable part of such a convoluted and broken process, effectively dealing with them is critical. I advise you to 1) Ask 5 Times, 2) Escalate Well and 3) Escalate Well Beyond.

1. Ask 5 Times The common problems are easy. For instance, if they misplaced your 4506-T Form, send them another one. If they request 3 months of bank statements instead of the usual 2send ‘em in. But, when you get information from the agent that is just wrong, and you can’t seem to get them to perceive it…That’s when you should Ask 5 Times. Call back and try another agent, 5 times. That’s right, it’s not worth it to try to prove your point and sometimes the agent is just not trained well enough to ever understand your question or concern. If you burn through 5 agents and can’t get the “right” answer, then ESCALATE.

Escalate up the chain of command, asking a supervisor to review the problem with you. Do so politely but confidently. I will say to the 5th agent, “Please connect me to a manager or supervisor on duty, will you? This issuue is just too important to me so I want to hear it from a supervisor”. Often the agent will oblige. But sometimes the agent will argue with you and sometimes the agent will ask their cubicle-mate to pose as a manager. Sometimes the manager will have to call you back (doesn’t usually work out. Surprised?). And sometimes a more experienced, well trained and person WILL actually take your call and add value and solve the problem.

Escalate Well Beyond the Loss Mitigation Department. Perhaps departmental rules or guidelines have to be altered in your case. Often the individual departments do not have the authority to make exceptions. You should seek assistance and support from other departments, or from bank executives, regulatory agencies, politicians, trade associations or, maybe even the press. Don’t think that your problem is too small for any of them to care about. The secret to winning their support is to ask for it in a way that indicates you 1) have used all the correct channels already, 2) understand their role and have appropriate expectations for what they can do to help, 3) know specifically what you want them to do and 4) that you are the type of person who will not stop escalating if they fail to respond.

Escalations Well Beyond are effective. I’m amazed at the results. It seems that such interventions are always successful and the trick is in convincing the person to get involved.

This housing crisis has hit so many of us that, generally speaking most people are sympathetic and willing to lend a had if they can. So, getting the assistance you need is really about having the nerve and the street-smarts to ask for it well.

Rockwood, dubbed the “Loan Mod Mercenary”, has helped thousands get great loan mods despite the odds. ? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification This and other unique content ” articles are available with free reprint rights.

Are You Facing Foreclosure? Janian and Associates Will Help You

The recession has caused high unemployment rates, hard working people striving to maintain the “American Dream” are presently faced with the potentiality of forfeiting their home. According to estimates, 1 out of every 200 homes will be foreclosed on. With each passing day a person some where is trying to figure out how to save their home. When it comes to foreclosure, one of the most devastating oversight that people make is declining to openly talk with their lender about their circumstance. Sadly, homeowners sometimes wait too late to make an effort to negotiate a deal to save their home. The best thing to do is to educate yourself on the options available.

Fortunately, there are several different ways to actually keep foreclosure from taking place. Here is a fact, lenders are not in the business of possessing anyone’s home. It is important to recognize and understand that lenders don’t like to see homes to go into foreclosure. Lenders are in the business of lending money and hence would choose to have mortgage loans paid. As such, many lenders are will gladly work with homeowners to come up with a repayment plan to keep people in their homes if and when possible.

If you are facing foreclosure you may be able to:

1. Lower Your Monthly Mortgage Payments
2. Get Your Loan Modified
3. Short Sale Your House
4. Defer Your Mortgage Payment

The above mentioned are just a few options that may be applicable, confirm with your lender and/or seek legal guidance from a loan modification attorney to try to work something out to prevent foreclosure. Some people believe that it will cost them nothing to just walk away from their home and let it go into foreclosure. The fact is foreclosure will involve money and will adversely affect your credit. Count the cost. Avoid Foreclosure.

To learn more information about loan modification services contact Janian and Associates for a free consultation.

Do You Need Help Saving Your Home from Foreclosure: Go to Your Lender

If your home is on the verge of foreclosure, you will do anything possible to save it. But the question is how to do it. One answer… ask your lender for help.

For most home owners, contacting the lender at the first sign of financial problems seems to be not so good of an idea. Most are embarrassed to discuss money issues to others or they simply don’t see the need to inform their lender right away of their present financial standing. But the truth is, asking for your lender’s help will save you a lot of trouble and it could help you save your home. As bad as you think you situation is,trust me, your lender has many more clients in a worse spot then you are. Your Lender is always willing to talk to you about a way to help.

Most people have the perception that lenders, think only of themselves and don’t care about the borrowers. This leads to the common notion that lenders show no mercy to homeowners who have defaulted on payments and will foreclose at the first opportunity. The truth is lenders like owners will do everything they can to avoid home foreclosures. So again, the best way to save your home is to work with your lender to solve the problem.

Lenders usually send a Notice of Default, also known as a NOD, if you miss payments for 3 consecutive months. DO NOT wait until you get the Notice to take action. Call your lender as soon as possible. Inform them why you have defaulted on a payment and ask for an alternative payment schedule or temporary lower rates until your finances have returned to normal.

Talk to your lender, inform them the cause of your delay, and ask for payment alternatives. Don’t wait too long before you make a move to save your home. Act fast. Understand the gravity of the situation and do something. It is your obligation to pay your mortgage but when worst comes to worst, your lender will help you keep your home.

Doc Schmyz has done real estate deals all over the US and Canada. His free website shares Real estate investing information for all over the US. Find real estate information by state

Going Into Foreclosure, Which Is The Best Way To Avoid It?

There are many methods to avoiding foreclosure and some are better than others. Of the five which is best for you? Loan modification is the first choice of many, but there is one problem, most do not qualify due to loss of job and too much consumer debt. If foreclosure is looming at your doorstep you have options, but you will need a strong desire and an obvious commitment to see it through. Maybe you are not aware of this fact; banks are in worse shape than you and they really do not want your house back. Gain awareness of the process of saving your house from foreclosure, be committed and enlist the help of others and you just might weather the storm. Consider your options, here are five of them.

Begin with a refinancing strategy. The fact is lenders are willing to work with you if you have the qualifications. Are you willing to make your payment and do you have the means, this is what the lender will be looking at. If you are behind on everything including your unsecured debt you probably not stand much of a chance. A refinancing plan can cause payments to be higher in some cases but your terms may improve and the opportunity to start fresh is what some are looking for. This path requires the most serious commitment.

Enlist the support of your family and friends. Sometimes bringing in the family is a viable alternative especially on a short term solution. Let’s face it, we don’t like admitting to family that we have fallen behind, but usually they are the most willing to help. Don’t let pride get in your way of asking for help. Here is the best advice when doing business with family, be sure to treat it like you are dealing with the bank and make sure you do all the proper contracts just in case things go sour.

Try bankruptcy to stop a foreclosure in progress, but this can become an expensive alternative. The amount of payments which need to be made to satisfy the creditors and bankruptcy costs make this an option for those who have a large amount of disposable income. Let’s face it if disposable income is available your family wouldn’t be in this situation.

Sell your property for break even or even a little loss to avoid the foreclosure. The reality is most people cannot sell their home because they are upside down meaning they owe more than the home is worth. But if you can get out of the foreclosure by doing a quick sale the loss of equity in the long run is a lot less painful than a foreclosure. Look for a new home and start over as there are many bargains to be had in this market.

Work with a credit counseling service or loan modification service to prevent the foreclosure. As stated earlier, the banks do not want your home as they will lose more money by not working with you. But if they see that you have gone the lengths to hire a service to help you with your workout the may take you more seriously. The loan modification services know all the tricks and rights to getting the banks to do what they legally have to do.

The key to avoiding foreclosure is to know your options and take action until you win. Giving up and giving in to the bank simply is not an option. You have right and you have five ways to avoid foreclosure now it is time to take the action.

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How To Stop Foreclosure – What You Should Do To Change Your Situation

To stop foreclosure can become an exercise that is an eye opener for you and your family. It will force you to look at your spending habits a bit closer and will give you an opportunity to live in a calm and relaxed manner in the future.

In todays economic down turns it will be wise of you to start looking at your expenses in a serious way which will help you to keep your home, your car and your other big assets. If you have your creditors knocking on your door already, chances are that you are stressed and frustrated with your life and just cant see an outcome. It is of the utmost importance that you calm yourself down and start working on your situation in a relaxed atmosphere. Here are just a few rudimentary steps for you to follow:

Take a pen and paper and start making a list of all your major expenses you have each month. This would be your bond repayments, your car and your utilities and credit card repayments. Add them up.

Now make another list of all insurance premiums you have and all the taxes you pay. Be as thorough as possible. Add this total to your first sum.

Now you can tackle the hard part. Your next list will be on the small expenditures you have like grocery bills, pocket money, cable TV, candy, gas, phone bills, internet connections and things that are deemed luxury items which you think you need, but just want in the long run.

Add this total to your sums above. Total the three sums up and look at what your monthly expenditure actually is. Do you see an amount that just blows your mind? Are you overspending or are you spending more than what you are earning? If you answer yes, then you are in for a rough ride sooner or later, if you don’t take action now.

To keep the wolves from your door, start cutting down on your third list. Be really brutal and draw a line through anything you can do without. Do this as many times as possible until you are totally satisfied with the outcome. You should now be in a better position and will see what your actual monthly expenditure should be. Do the second and first list as well.

Always keep every single receipt you get when purchasing items. Even if it is a hamburger. Jot the amount down in your expenditure book and look at it on a daily basis. You are disciplining yourself and your family if you can carry on doing this every month.

Start thinking about ways and means where you could save to create a surplus on your monthly income. This is the best place to be in your life. If you can generate a surplus you could invest that money which will in turn work for you and stop foreclosure happening to you.

To avoid your foreclosure, you can acquire some information in these url’s provided that can help you Stop Foreclosure before it’s to late. In this resource box, there will be websites that can help you find out how to Stop Foreclosure fast.

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