Posts Tagged ‘loan modification’
Tuesday, January 5th, 2010
While keeping your home certainly trumps living on the street with a higher credit score, a loan modification can knock as much as 105 more points off your credit score than a foreclsoure.
According to a published article in the Detroit Free Press, a “loan modification to get a lower mortgage payment and stay in your home could impact your credit score. In some cases, consumers could see credit scores drop by 100 to 150 points.” If you have a home foreclosure, you could see your credit score drop by 45 to 100 points.
DHW asks: Do you think this credit scoring is fair?
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Tags: credit report, credit report score, credit score, foreclosure, loan modification, modification, mortgage, mortgage modification
Posted in credit report, credit report score, credit score, foreclosure, loan modification, modification, mortgage, mortgage modification | 1 Comment »
Wednesday, December 16th, 2009
Ohio AG Richard Cordray sued Barclays Capital Real Estate, Inc. for forcing at-risk homeowners to enter one-sided loan modifications. Cordray also accused Barclays of “inadequate, incompetent customer service.” “In Ohio, we have zero tolerance for any more excuses,” Cordray said.
DHW asks: Have you applied for a loan modification with Barclays? If so, How was your experience?
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Posted in loan modification | 1 Comment »
Sunday, December 13th, 2009
Of the 760,000 homeowners to apply for a loan modification under President Obama’s mortgage relief program since March, only 31,000 have received permanent loan modifications. Bank of America was the worst performer of all the big lenders, completing only 98 loan modifications out of the 160,000 applications filed by the end of November. Even the best performer, GMAC, was unimpressive. They completed just 7,100 loan modifications.
Overall, only 4% of enrolled borrowers successfully completed permanent loan modifications.
In recent weeks, critics of the president’s Home Affordable Modification Program (HAMP) have called for a more aggressive approach to loan modifications.
One overlooked resource
Generally, one of the requirements for successfully completing a loan modification under The Home Affordable Modification Program (HAMP) is using the services of a housing counselor. This service is free to the borrower and paid for by the government. The housing counselor will help you come up with a budget you can afford. The counselor is also your advocate. If you are having problems communicating with your lender, contact your counselor. To find a HUD-approved housing counselor, call 888-995-HOPE. They can refer you to a counselor in your area or arrange for an over-the-phone consultation. Remember, the HUD-approved housing counselor is free to borrowers and does not represent the interest of the lender.
If this approach fails, perhaps resort to the advice given on DHW a while back.
DHW asks: Have you applied for a loan modification under HAMP?
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Tags: bank of america, borrowers, HAMP, home affordable modification program, housing counselor, loan modification
Posted in HAMP, HUD, Housing, bank of america, housing counselor, loan modification | 1 Comment »
Friday, December 11th, 2009
Vice chairman of WL Ross & Co. and the former director of the Federal Housing Finance Agency, James B. Lockhart III, warned the US housing market may not be out of the woods just yet.
Lockhart predicts foreclosures will “spike” unless the the Obama administration gets more aggressive with loan modifications. The former director of the FHFA feels greater principal reductions are in order to keep families in their homes.
For more information on loan modifications, visit the Government’s official website.
DHW asks: Do you agree with Mr. Lockhart?
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Tags: foreclosures, Housing, loan modification
Posted in Housing, foreclosure, loan modification | No Comments »
Sunday, December 6th, 2009
The Wall Street Journal published an insightful op-ed piece by Edward Pinto. Mr Pinto sees two major shortfalls with the Treasury’s attempt to modify delinquent mortgages through the Home Affordable Modification Program (HAMP).
- “The first shortfall is that the program doesn’t provide a clear process to triage the over 7.5 million delinquent loans.”
- “It doesn’t take into account that the primary reason borrowers default is “negative equity.” When a house is worth less than what is owed on it, making monthly payments seems like a waste of money and many homeowners walk away.”
Mr. Pinto categorizes the three types of delinquent borrowers in his article:
- Borrowers with loans for vacation homes or investors. Pinto feels these loans should be identified immediately and, “when necessary, foreclosed on.” ‘Scammers’ also fall into this category.
- Borrowers who can’t or won’t pay their mortgage. Mr. Pinto feels these borrowers should be given incentives to vacate their homes, “either a small amount of cash or the ability to conduct a short sale.”
- Borrowers who have demonstrated an ability and willingness to pay their mortgage. Mr. Pinto writes that these borrowers can be best served “if we stop clogging the system with unqualified borrowers from groups one and two.”
(If you fall into category three, still call your lender for a loan modification using HAMP. With government pressure now on the industry to act quickly, you may find your lender to be more cooperative than in the past. If you fall into category two, contact your lender to request a short sale or deed-in-lieu of foreclosure.)
In October 2008, along with Peter Wallison, Edward Pinto wrote in the Wall Street Journal that government agencies bore a responsibility to “clean up the mess they had made by lowering underwriting standards to satisfy Congress’s desire to increase home ownership.” They suggested “that the loan principal could be reduced by an average of 20% to give owners equity—and with it an incentive to pay their mortgages.” They also suggested that mortgages “be modified to a 5% fixed rate loan with a 20-year term.”
DHW highly recommends that you read this article (this includes you too, Treasury).
DHW asks: Have you applied for a loan modification or short sale? If so, how was your experience?
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Tags: edward pinto, HAMP, home affordable modification program, Housing, loan modification, short sale, treasury, wall street journal
Posted in HAMP, Housing, home affordable modification program, loan modification, making home affordable, short sale | No Comments »
Tuesday, December 1st, 2009
Finally, relief for those seeking a loan modification, short sale or deed-in-lieu of foreclosure. Lets hope these will be the game changers we’ve been waiting for.
- Update for those seeking a loan modification using Making Home Affordable (a.k.a. HAMP)
- New guidelines for streamlining short sales and deed-in-lieu of foreclosures (HAFA)
This information is also available under “Modification Center”
DHW asks: Do you think these programs will be game changers?
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Tags: deed in lieu of foreclosure, HAFA, HAMP, loan modification, short sale
Posted in HAFA, HAMP, deed in lieu of foreclosure, loan modification, short sale | 1 Comment »
Saturday, November 7th, 2009
DesperateHouseWise.com added a new page to its site. Modification Center offers helpful information for homeowners seeking a loan modification or refinance. Find information about Making Home Affordable and local foreclosure prevention events. You can even find a free, HUD-approved housing counselor.
DHW also added Housing Tax Credits. This page provides in-depth information regarding the recent extension and additions to the housing tax credits.
DHW asks: Have you applied for a loan modification? How was your experience?
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Tags: $6500, $8000, $8000 tax credit, 6500 tax credit, 6500 tax credit extension, 8000 tax credit extension, and Business Assistance Act of 2009, bill h.r. 3548, buyer, buyers, counslor, fannie mae, first time buyers, first time homebuyers, foreclosure, foreclosure prevention, guidelines, h.r. 3548, home, home buyers, home owner, home owners, home seller, homebuyers, homeowner, homeowners, Homeownership, house, Housing, housing counselor, housing news, housing report, housing tax credits, lender, loan, loan modification, loan modification letter, modification center, mortgage, Obama, President, president barack obama, President Obama, Real Estate, real estate news, refinance, seller, tax credit, tax credit extension, Worker, worker home ownership and business assistance act of 2009, worker homeownership and business assistance act of 2009
Posted in Housing Article, foreclosure prevention, housing counselor, housing tax credit, housing tax credits, loan modification, loan modification center, making home affordable, refinance | No Comments »
Sunday, October 25th, 2009
Communication is the key to any strong relationship. The relationship you have with your lender is no exception. It’s important you respond when your lender reaches out to you. Likewise, your lender should be responsive when you have questions or concerns. But what do you do when your lender won’t return your calls or emails? It may be time to step back and look at how you communicate.
No doubt your lender gets tons of calls and emails a day. Don’t underestimate the impact a personal note can make. Remember the now infamous meltdown of Countrywide’s former CEO, Angelo Mozilo? After receiving impersonal email after impersonal email, Mozilo got mad as hell and wasn’t going to take it anymore. “This is unbelievable,” Mozilo wrote. “Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting.” Mozilo’s frustration was understandable. Imagine if just one of his customers had taken the time to write him a nice, personal note. Below is a sample letter that may help solicit a quicker response from your lender. Of course, personalize your letter so as not to disgust the reader. I also suggest including a small, personal token of your appreciation.
Dear Sir or Madame (insert name of lender’s CEO here):
I hope this letter finds you doing well. So much has happened since we bought our home on Bonnet Drive. Our little girl, Suzie, starts kindergarten this year and Bobby Jr. now has his driver’s license. They grow so quickly, don’t they?
I’m writing you this letter because I have attempted several times to reach your company by phone and email regarding a loan modification. No one has returned my inquiries. We are in financial distress and need to reduce our house payments to avoid foreclosure. I know you and your company get so many calls that it must be difficult to keep all the names straight. To help you remember our home, I included a doorknob with this letter. If you’re still a little foggy about the details, don’t worry. I will continue to send you more artifacts from our home until it becomes clear. Surely my garbage disposer and toilet brush will help you remember.
I look forward to catching up with you.
All the best,
John or Jane Doe
Loan # 11111111111
DHW asks: Have you attempted a loan modification? Were you successful?
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Posted in Angelo Mozilo, Countrywide, Editorial, bank of america, communication, loan modification, loan modification center, refinance | 1 Comment »