Saturday, January 24, 2009

The Mortgage Relief Initiative

The "Mortgage Relief" Initiative helps homeowners refinance high interest loans into more afforadable loans. Click here for details:

Loan Modification Frequently Asked Questions: HUD

This information has been posted on:

A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford

Question 1: In utilizing the Loan Modification option to bring an asset current, can the mortgagee include all fees and corporate advances?

Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified principal balance.

Question 2: May a mortgagee perform an interior inspection of the property if they have concerns about property condition?

Answer: Yes, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor's continued ability to support the modified mortgage payment.

Question 3: Can a mortgagee include late charges in the Loan Modification?
Answer: Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.

Question 4: When utilizing a Loan Modification option, can a mortgagee capitalize an escrow advance for Homeowner's Association fees?

Answer: HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

Question 5: Is there a new basis interest rate which mortgagees may assess when completing a Loan Modification?

Answer: Yes, Mortgagee Letter 2008-21 states that the new basis interest rate is 200 points above the monthly average yield on U.S. Treasury Securities, adjusted to a constant maturity of 10 years.

Question 6: Will HUD subordinate a Partial Claim, should a mortgagor subsequently default and qualify for a Loan Modification?

Answer: If a mortgagor subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.

Question 7: Are mortgagees required to perform an escrow analysis when completing a Loan Modification?

Answer: Yes, mortgagees are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.
Question 8: Is the mortgagor eligible for the upfront premium refund at payoff of a modified loan?

Answer: It depends upon when the closing date occurred. For assets closed:
After July 1, 1991 but before January 1, 2001, the 7-year unearned premium refund schedule shown in Mortgagee Letter 1994-1 remains in effect, On or after January 1, 2001 that are subsequently refinanced, the 5-year refund schedule shown in the attachment of Mortgagee Letter 2000-46 applies, or On or after December 8, 2004, refunds of upfront MIP are eliminated except, when the mortgagor refinances to another FHA insured mortgage. The refund schedule attached to Mortgagee Letter 2005-03 has been modified to a 3-year period.

Question 9: Can a mortgagee qualify an asset for the Loan Modification option when the mortgagor is unemployed, the spouse is employed, but the spouse name is not on the mortgage?

Answer: Based upon this scenario, the mortgagee should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new modified mortgage payment, but insufficient to pay back the arrearage. Once this process has been completed the mortgagee should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.

Wednesday, October 29, 2008

You Can Modify Your Own Mortgage

Any one can modify there own mortgage, it is free of change. There are simple steps to follow to get your loan modified.

First you have to call your bank (where your mortgage is held) and ask for the loan modification department. Tell them your situation and ask them for help.

The bank will make sure that you meet a certain criteria and send you loan modification documents. Make sure that you get these documents back to them ASAP.

The bank will determine weather you qualify for a loan modification and will want you to meet one of the following criteria:

1) Owing more than the house is worth and you can't refinance
2) Lost your job and can no longer afford your payments
3) Have an ‘Option ARM’ from a lender like Countrywide or Washington Mutual
4) Have missed two or more payments

Depending on your situation you can expect one of the following from a loan modification:

1) The bank ‘writes-down’ the balance of your loan to a percentage of the home’s current value. If the values in your market have tumbled, the lender may forgive a portion of your loan balance.
2) The bank may offer lower interest rates, especially to people who are stuck in Adjustable rate mortgages with high rates.

Things you will need:

1. Hardship Letter (Job loss, reduction in income, Adjustable Rate Mortgage).
2. Bank statements
3. Pay Stubs
4. Monthly Expense Statement; (utilities, food, clothing, medical, gas, credit card, taxes, mortgage, etc...

You may need up to 2 hours on the phone.

Remember, you have the right to contact your lender and ask about a loan modification. You don’t have to pay for a third party company to negotiate your modification for you.

Monday, July 28, 2008

Short Sale

A short sale is when a lender allows you to sell your property for less than what is actually owed on your mortgage.

Example. Say you owe $120,000 on your home. You call the bank and ask them for help and ask them if you can sell your home for less that what you owe on your home. A buyer offers you $100,000 for your home, the bank accepts the offer and you sell your home for $100,000. The bank may forgive the $20,000 that you owe them or may come after you for the remaining $20,000.

New Help for Homeowners, Congress Passes Bill for Mortgage Relief

Congress passes a bill to provide mortgage relief to prevent foreclosures. The bill focuses on helping help to struggling homeowners and stabilize a troubled housing market. This program will help debt strapped homeowners get more affordable mortgages .

The federal government wants to prevent foreclosures and will be offering FHA insured loans to homeowners to refinance their debt if certain conditions are met.
  1. Banks would have to agree to take a large loss on existing loans in exchange for avoiding often costly foreclosure.
  2. Home owners would have to prove that they will be able to afford these new mortgages.
There are too many factors at hand. Banks may decide not to participate and foreclose on homes if it leaves them in a positive position. Forgiven debt be considered income and taxable by the IRS. More details will be have to be given to determine who this will actually help.

Thursday, July 24, 2008

New Site Helps Prevent Forclosure

If you have some equity left in your home and just want out. Buy My House Before the Bank Takes It has been designed to help home owners sell their homes and avoid foreclosure. To view deals on real estate, go to

First listing has been posted on, lets see how the market responds to this listing.