Statistic Archives – Refinance – Mortgage Refinancing Rates And Information

Loan Modifications: 6 Ways Not To Become A Statistic

September 29th, 2009 No comments

Loan Modifications have been put forward as the great savior of the current credit crisis. Whether this is true or not is a matter of debate. I personally feel that dealing with a credit crisis by trying to fix mortgage issues is not going to deal with the big picture.

Nevertheless it is a fact that many are benefiting from the taxpayer subsidized loan modifications that are being grudgingly supplied by banks and other mortgage providers.

However many are not benefiting at all from this service, what is worse many have considerably worse off because they tried to get a loan modification and bumped into a scam artist or organization that duped him out of the little money he had left. Nobody wants to become a statistic, especially when it is the number of borrowers that are conned out of their homes by dishonest “loan modification consultants”.

What can you do? Here are 6 easy steps:

1) Know the beast. Understanding what your options are and who qualifies for aid is vital. Reading www.blownmortgage.com and other mortgage help articles will provide you with inside information about loan modifications and mortgages. Other websites that should be on your list are: WWW.hud.gov www.makinghomeaffordable.gov and www.financialstability.gov . In fact wherever you go for help make sure it is free. The best help out there on loan modifications is, believe it or not, is free.

2) Beware and be alert. If you are struggling with your mortgage you are a prime target for scams, recognize and avoid common scams.

3) Avoid fast loan modifications. Companies who want you to sign papers immediately or who claim they can save your home if you sign of the deeds of your house to them are scam artist. Nobody can save your home except you and your mortgage provider. Organizations and individuals can provide valuable information but they can’t guarantee anything because they don’t make the decisions.

4) Again, DO NOT sign the deed of your house to anybody unless you are working directly with the mortgage company to forgive your debt. In other words only sign off the deed of your house if you are selling it back to the bank.

5) Only make mortgage payments to your bank. A common scam is for a “consultant” or loan modification company to ask you to pay them so they can deal directly with your mortgagee and make the payments for you. As you probably guessed this payments stay in the pockets of the scam artists while you get deeper in debt.

6) Don’t pay anybody for advice on your loan modification or for counseling services on a delinquent loan. This is not to say they are all scam artists but even the kosher variety or not as good as the organizations that provide free counseling as a public service.

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Loan Modifications, Hope, Lies and Misinformation

September 17th, 2009 No comments

Many believe that the only way to get out of an economic crisis is to buy yourself out of it. To spend enough to jumpstart the economy again. Loan Modifications are one of the tools the Government are using to get homeowners out of the whole they dug for themselves before they bury the whole economy with them.
Such is the determination and commitment the government has to this project they have earmarked 75 billion dollars to stimulate loan modifications on qualifying mortgages. That is the Hope anyway. The Hope is that changing the mortgages, reducing monthly payments, extending tenures, providing bonuses to borrowers as well as lenders and dropping interest rates will buy America’s homeowners out of the credit crisis.
Sadly it could seem that Hope, empty hope is all there is to this program. One of the foundations of the program is the assumption that banks will make an effort to create loan modifications for homeowners that are at risk of losing their homes. This is done by providing incentives to banks and homeowners to agree to sustainable loan modification. However the problem is that banks only have to “put forth an effort” and provide basic statistics in order to receive the stimulus. They are obliged to provide statistics on how many homeowners they’ve contacted but in no way forced to approve any loan modifications or even stop foreclosures while a loan modification is arranged.
Even if a loan modification is approved there is no assurance that it will be beneficial or even worthwhile for the homeowners. The cost of getting the loan modification can be so expensive and the monthly payment reduction so low it is not worthwhile to go through. One borrower is reported to have spent nearly $10,000 for a loan modification that only reduced the monthly payment by $25. To add insult to injury this outrageous waste of money will probably end up being a statistic that is used to show how generous and helpful banks are being.
After all is said and done the loan modification program is progressing very slowly. The number of loan modifications is around 200,000 while 9 million home loans are at risk to foreclose by next year.
Because there is no requirement for banks to make a real effort on loan modifications that are not profitable for them, the question remains if it is reasonable for us to expect banks to invest in providing loan modifications that are going to cost them money, money they are not likely to see turn any profit.
A more creative approach is needed to find a real solution to the credit crisis. Loan modifications on their own do not seem to the answer. The Hope Mortgage Program is actually only geared for homeowners that can still deal with a mortgage at a reduced rate. Those worst off cannot expect any help from the government.

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Mortgage Modifications Drop But Mortgage Workouts Rise in HOPE

August 1st, 2009 No comments

HOPE produced mixed results in the month of June. On the whole thought it seems like June was a better month for the government foreclosure and debt management counseling service.

HOPE Now program provides counsel for home owners in risk of losing their homes by providing specific advice and debt management workouts to refinance mortgages and arrange loan modifications.

The statistics provided by HOPE NOW itself show a decrease of 5.1% in the overall mortgage modification activity, although, as HOPE itself explains this might be due to the way the statistic is calculated. Apparently for a person to qualify for a loan mod they must undergo a trial period of three months. These pre-loan modification trials do not qualify as loan modifications but are categorized as “trial modification” or “repayment plans” all of which seems to screw the figures a little.

The executive director of HOPE NOW Faith Schwartz is reported as saying: “I am proud of the continued progress made by HOPE NOW servicers and am confident that they are aggressively and proactively using HAMP, as well as other successful foreclosure prevention programs, to help as many homeowners as possible”.
The positive figures Schwartz is referring to are the 310,000 homeowners that completed home mortgage workouts during the month of June, which signifies a 25% increase from the month of May.

All of this occurs in a context where government is flexing its muscles to accelerate loan modifications nationwide providing more incentives for banks to accept (and fast) loan modifications and mortgage refinancing.

If you feel you are in danger of losing your home because you are struggling with your monthly payments contact HOPE NOW for a personalized analysis of your situation and practical help to negotiate and work out your loan modification. It is vital to take advantage of this and other mortgage modification counseling services earlier rather than later as it is much easier (and profitable) to negotiate with a lender before you become a delinquent borrower (i.e are behind in your payments) as you have a much stronger hand when settling and negotiating the outstanding debt.
You can get this free service by calling 888-995-HOPE (4673). Make sure you have your basic mortgage documentation close by as you will be asked some questions by the operators in order to assess your situation.

Beware of current scams that ask for payment for this service, HOPE NOW is a free government aid program that does not request any kind of payment.

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