To Sign-up, get information, or have us contact you: Please visit our website AmericasLoanModifications.com
Loan modification is a fast growing industry primarily because there is a great need for many home owners to modify the terms of their loan so they at least have a chance to stay in their residence.
Prior to the loan modification surge, borrowers who were unable to make their mortgage payments had only two choices: short sale or foreclosure. Obviously, either of these requires the person to vacate their home, which, in most cases, is the last choice the homeowner wants to take.
With a successful loan modification, interest rates, and in some cases principle owed, can be lowered and may be combined with a lengthened amortization, so monthly payments are in line with monthly income.
Most lenders now have active assistance for their borrowers so they can modify their loan without outside assistance. However, it is time consuming and often confusing, and many borrowers turn to firms such as ours for assistance in the process.
We are also hearing from a lot of mortgage brokers and realtors who want to try to help their clients stay in their homes. If we can’t modify the loan, we refer it back to the realtor for a short sale.
As with every industry, there are unfortunately those who want to make a quick buck at the expense of someone else.
Here in Colorado the director of the Division Of Real Estate found it necessary to issue a position statement regarding who can negotiate a loan modification. The statement requires anyone negotiating on behalf of the borrower be a licensed mortgage broker, unless they are an attorney licensed in Colorado and not engaged primarily in the loan modification business. The Director found this necessary because of complaints of borrowers being charged up front for a loan modification without refund if the loan modification was not accomplished.
I recently responded to a radio ad from a loan modification firm. I found that it was a law firm that charged a several thousand dollar retainer, for which there was no refund if the modification was not successful.
Homeowners have also been advised to quit making payments either to make their case for modification stronger or to have funds available to pay the loan modification firm.
I believe it takes a serious lack of integrity to take money from someone who is already struggling to make their house payments and then refuse to refund it when there are no results. Also, recommending that borrowers quit making their monthly payments, will no doubt result in a declining credit score. We have not found that being behind in payments is a prerequisite to a loan modification.
There are non-profits who offer loan modification services at no charge, and although many provide a good service, we have been informed of many cases where the modification doesn’t get done. This may be because the non-profit is under funded or under manned, but the process drags on and on.
Homeowners looking at the promise of an affordable monthly payment don’t need the additional frustration of waiting month after month for results and then face foreclosure after putting their faith in a loan modification company (non-profit or not). If the loan modification can’t be done, let the homeowner know quickly and refund any deposited fees so they can move on to short sale while there is still time.
With proper up front screening we can determine which cases will be successful with 90% plus accuracy, and within a few weeks the loan is either modified or rejected.
The Colorado Division Of Real Estate recently issued subpoenas to thirteen loan modification firms in Colorado and other states because of misleading solicitations and a no refund policy. Firms that operate with integrity appear to have no problem with their records being reviewed, and in some cases, have stated they look forward to the attempt by the Division to put some honesty in the business before it gets too far out of hand. Hopefully, agencies in other states will put some regulation in the industry
Unfortunately even with regulation some home owners will continue to lose money with no results and some honest firms will be harmed because home owners are afraid they will be cheated.
Thursday, January 15, 2009
Wednesday, October 22, 2008
Why are so many in trouble with their mortgage?
If you are having trouble making your mortgage payments, you are not alone. Millions of homeowners are in the same boat. Some because of job loss, divorce or medical problems, but many more because of the mortgage they were sold.
In the recent heyday of easy mortgages a lot of homeowners were sold products they really did not understand. They were sold a low monthly payment that was going to adjust to a much higher one or sold on a minimum payment that is actually adding to the amount owed on the property, known as a reverse amortization mortgage. This was based on the idea that the value of the house would continue to increase, so the homeowner could refinance a year or two down the road.
For example, on a $170,000 loan the minimum payment option may be $500 per month. The homeowner looks at this and feels this is a payment they can afford. What they didn’t understand is that the amount of money owned on the house actually increases by about $500 per month for each month the minimum payment is made. After a year the amount owed on the house is $176,000. After two years it is $182,000. This may be ok if the value of the house is increasing at 5 or 10% a year, but when it is decreasing or staying the same, the amount owed is more than the house is worth.
The lender puts a cap on the amount they will allow to be owed on the home and says you have to start making full payments which are $1125 per month. The payment just went up $725.
Other loans had a very low interest rate for a certain period of time, that adjust sharply upward after a year or two and the payment can increase by a few hundred to a couple thousand dollars.
Homeowners were sold on buying a house at a payment they could afford. The mortgage broker “forgot” to tell them that this wasn’t going to be the payment forever.
Still, others were sold on the no money down idea. Get an 80% first mortgage and a 20% second mortgage. Of course, the first mortgage is at a higher than normal interest rate and the second mortgage is at a VERY high interest rate. “Not to worry” you were told. “The value of the house will increase by 20% in the next couple of years and you can refinance at 80% loan to value and your total payment will go down. You just have to get past the first two years”. Well, the house DID NOT increase by 20%, and some other things happened in your life, so you can’t refinance and you can’t afford the payment. Loan modification could help take care of this problem.
Don’t feel ashamed if you didn’t understand what was going to happen. Most people take out very few mortgages in their lifetime. Some of the in trouble mortgages are so complicated the mortgage brokers could not explain them, and if they could, they avoided telling you about what COULD or WOULD happen.
Loan modification won’t work for everyone, but if you are behind in your payments and don’t look at a modification, or a short sale, foreclosure is the only option left.
In the recent heyday of easy mortgages a lot of homeowners were sold products they really did not understand. They were sold a low monthly payment that was going to adjust to a much higher one or sold on a minimum payment that is actually adding to the amount owed on the property, known as a reverse amortization mortgage. This was based on the idea that the value of the house would continue to increase, so the homeowner could refinance a year or two down the road.
For example, on a $170,000 loan the minimum payment option may be $500 per month. The homeowner looks at this and feels this is a payment they can afford. What they didn’t understand is that the amount of money owned on the house actually increases by about $500 per month for each month the minimum payment is made. After a year the amount owed on the house is $176,000. After two years it is $182,000. This may be ok if the value of the house is increasing at 5 or 10% a year, but when it is decreasing or staying the same, the amount owed is more than the house is worth.
The lender puts a cap on the amount they will allow to be owed on the home and says you have to start making full payments which are $1125 per month. The payment just went up $725.
Other loans had a very low interest rate for a certain period of time, that adjust sharply upward after a year or two and the payment can increase by a few hundred to a couple thousand dollars.
Homeowners were sold on buying a house at a payment they could afford. The mortgage broker “forgot” to tell them that this wasn’t going to be the payment forever.
Still, others were sold on the no money down idea. Get an 80% first mortgage and a 20% second mortgage. Of course, the first mortgage is at a higher than normal interest rate and the second mortgage is at a VERY high interest rate. “Not to worry” you were told. “The value of the house will increase by 20% in the next couple of years and you can refinance at 80% loan to value and your total payment will go down. You just have to get past the first two years”. Well, the house DID NOT increase by 20%, and some other things happened in your life, so you can’t refinance and you can’t afford the payment. Loan modification could help take care of this problem.
Don’t feel ashamed if you didn’t understand what was going to happen. Most people take out very few mortgages in their lifetime. Some of the in trouble mortgages are so complicated the mortgage brokers could not explain them, and if they could, they avoided telling you about what COULD or WOULD happen.
Loan modification won’t work for everyone, but if you are behind in your payments and don’t look at a modification, or a short sale, foreclosure is the only option left.
What is a Loan Modification?
It’s when a lender negotiates to change the terms of a mortgage. The result of the negotiation could be:
• A lower interest rate
• The amount owed on the loan could be lowered.
• Adjustable interest rates can be changed to low fixed rates
• Back payments owed can be added to the loan principle
• Late fees waived
• The term of the loan can be lengthened
• Second mortgages could be waived or re-negotiated
• A combination of the above
What does this mean to you?
If you are in a situation where you are unable to make your mortgage payments because your interest rate adjusted to a point where your payments are just too high for your budget, a loan modification could reduce your monthly payment by hundreds of dollars to something you can afford so you can stay in your home.
Why would a lender re-negotiate the terms of your loan?
If you are unable to make your mortgage payments because of a hardship, the normal option the lender has is to foreclose on your house. Lenders do not want to be in the real estate business! They are in the loan business. It is expensive for them to process a foreclosure. After they take over the house, they have to maintain it and sell it. When it is vacant it is the target of vandals, the property quickly falls in to dis-repair and is a blight on the neighborhood. The price they can sell it for quickly drops, and they no doubt will have to sell it for much less than what you owe them on the house.
A foreclosure is the most expensive option the lender has. A loan modification is by far the least expensive option!
If you can modify the terms of your loan, you can:
• Keep your home
• Avoid foreclosure
• Avoid bankruptcy
• Bring your mortgage current
• A lower interest rate
• The amount owed on the loan could be lowered.
• Adjustable interest rates can be changed to low fixed rates
• Back payments owed can be added to the loan principle
• Late fees waived
• The term of the loan can be lengthened
• Second mortgages could be waived or re-negotiated
• A combination of the above
What does this mean to you?
If you are in a situation where you are unable to make your mortgage payments because your interest rate adjusted to a point where your payments are just too high for your budget, a loan modification could reduce your monthly payment by hundreds of dollars to something you can afford so you can stay in your home.
Why would a lender re-negotiate the terms of your loan?
If you are unable to make your mortgage payments because of a hardship, the normal option the lender has is to foreclose on your house. Lenders do not want to be in the real estate business! They are in the loan business. It is expensive for them to process a foreclosure. After they take over the house, they have to maintain it and sell it. When it is vacant it is the target of vandals, the property quickly falls in to dis-repair and is a blight on the neighborhood. The price they can sell it for quickly drops, and they no doubt will have to sell it for much less than what you owe them on the house.
A foreclosure is the most expensive option the lender has. A loan modification is by far the least expensive option!
If you can modify the terms of your loan, you can:
• Keep your home
• Avoid foreclosure
• Avoid bankruptcy
• Bring your mortgage current
Tuesday, October 14, 2008
About Us - America's Loan Modifications
Many people are not aware of the options available to them with regard to mortgage loans and do not know how to deal with their lender. At America's Loan Modifications we are specialized in dealing with these issues, and we can help you.
My name is Bob, and I've been in the real estate business for many years. I created this blog in order to help some of the thousands of American's out there who are in dire straits.
More help is available via my web site:
AmericasLoanModifications.com
We specialize in working with banks to re-negotiate home loans. We can lower your interest rate, clear up late payment issues, and protect you against foreclosure.
Here is some more information on loan modification:
A Loan Modification is "a permanent change in one or more of the terms of a mortgagor's loan, which allows the loan to be reinstated, and results in a payment the mortgagor can afford." In other words, your interest rate can be lowered, your remaining balance re-amortized and/or the current term of your loan extended, in order to reduce your monthly payment.
There are costs and fees associated with a modification that you will be responsible for, and for which you will have to make an immediate payment.
In order to qualify for a Loan Modification, all property taxes must be current, or you must be participating in an approved payment plan with your taxing authority. If you have any additional liens or mortgages with other lenders – they must agree to be subordinate to the first mortgage.
An excellent article on this subject, written by a gentleman named Moe, can be found Here.
My name is Bob, and I've been in the real estate business for many years. I created this blog in order to help some of the thousands of American's out there who are in dire straits.
More help is available via my web site:
AmericasLoanModifications.com
We specialize in working with banks to re-negotiate home loans. We can lower your interest rate, clear up late payment issues, and protect you against foreclosure.
Here is some more information on loan modification:
A Loan Modification is "a permanent change in one or more of the terms of a mortgagor's loan, which allows the loan to be reinstated, and results in a payment the mortgagor can afford." In other words, your interest rate can be lowered, your remaining balance re-amortized and/or the current term of your loan extended, in order to reduce your monthly payment.
There are costs and fees associated with a modification that you will be responsible for, and for which you will have to make an immediate payment.
In order to qualify for a Loan Modification, all property taxes must be current, or you must be participating in an approved payment plan with your taxing authority. If you have any additional liens or mortgages with other lenders – they must agree to be subordinate to the first mortgage.
An excellent article on this subject, written by a gentleman named Moe, can be found Here.
Wednesday, October 1, 2008
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