Loan Modifications of 2009: In an effort to rescue the housing market, and those home buyers that found themselves in mortgages they could no longer afford... President Obama rolled out an ambitious plan.
Critics argue that there are too many restrictions to make the program a viable option for most situations. You can't modify your mortgage IF:
the property is not your primary residence
you have lost your job
you owe more than 5% above what your property is worth
you are already in default
you have not yet missed at least one payment
your lender does not want to participate in the program
your mortgage isn't already insured by Fannie Mae or Freddie Mac
the modified loan payment would come to more than 31% of your income
THINK YOU MAY QUALIFY? FREE CONSULTATION for LOAN MODIFICATIONS!!
Our team is in the business of helping homeowners find the solution BEST for THEM!! Sit down and talk about your specific situation, and we'll help you determine if you're eligible for a Loan Modification, or if your best option may be a short sale. We can help with BOTH successfully. You'll love our team... knowledgeable, friendly and the best in customer service you'll find anywhere!!
Can't refi or modify... and don't want to ruin your credit with a foreclosure? Consider turning it into a rental, or short sale it! Contact Christa to go through all possibilities and potential consequences... she'll give you your options so you can decide which is best for you.
DIFFERENCE BETWEEN LOAN MODIFICATION and LOAN REFINANCING...
Typically, owners can refinance fairly easily. There are many banks that offer different mortgage programs that suit the needs of the property owners... and it's really a matter of shopping around for the best deal right now. The higher your credit score, the better the interest rate you will be offered! Modifications don't rely on credit scores... so owners with low scores may want to first try to modify their loan.
Also, refinancing has charges attached - appraisal fees, closing costs, etc will be an out-of-pocket or rolled-in expense. Loan modifications are cheaper - they don't have the same attached fees.
Facts on the Modification Program so far:
Alan M. White of the Valparaiso Law School conducted a study on the results of the Loan Modification Program as of May, 2009. He noted that the data showed that "the Administration's plan to stimulate mortgage modifications does not seen to have had much effect yet, at least in this market segment" [i.e. subprimes].
In the month ending on May 26th, 2009... 464,983 foreclosures of subprime and Alt-A mortgages (out of a universe of 3.2 million studied). So 15% of all subprime mortgages were foreclosed in May! Only 19,041 -- a paltry 6% -- were modified during this period. And of those modified, only 11,200 involved any reduction in the monthly payments! Only 12% involved any write-off of interest, fees, or principal and 27% of the modifications actually increased the monthly payments due.
To read more on the program and process, see these articles below:
