Repost: Information on Foreclosure

Written by Parnell on July 1, 2010

I've received several messages from people inquiring about how they may stop foreclosure and/or keep their home. I'm reposting two Blogs that have some helpful information. Please read them.

Have a splendid & prosperous life!

Parnell

Stop Foreclosure. You may use the Home Affordable Modification Program

I understand that it is becoming increasingly difficult for people to make their mortgage payment. I want to help you stay in your home by providing you with information about a program that I personally recommend to receive a more affordable mortgage payment. The Obama Administration has already paid the Banks to provide this service to you for FREE. Meaning there are no closing costs, legal fees, processing fees, etc. IF YOUR BANK TRIES TO MAKE YOU PAY A FEE FOR THIS PROGRAM, REMIND THEM THEY ARE DOUBLE-DIPPING A GOVERNMENT SPONSORED PROGRAM. Feel free to print this information and take it to your Bank’s Loan Officer. Don’t speak to the Bank’s Customer Representative when you go to your Bank. It is important that you speak with the LOAN OFFICER. The Loan Officer is the person who assists with mortgage modification. You are NOT asking to REFINANCE your home. Some Banks will try to push that on you to make a profit off your circumstances. You want to MODIFY your current loan with a FIXED RATE. This is a FREE service that Obama has funded to help people keep their homes.

 HOME AFFORDABLE MODIFICATION PROGRAM

You may be eligible for the Home Affordable Modification Program, an initiative sponsored by the federal government to help homeowners who are finding it difficult to make their mortgage payment. Under this program, your Bank will review your current financial situation to determine if it can help you modify your mortgage to give you a new, more affordable mortgage payment.

 There are no fees associated with this program. Furthermore, you should never pay a fee for a mortgage modification and you should beware of any person or organization that asks you to pay a fee for assistance in modifying your loan.

To be eligible for the Home Affordable Modification Program, homeowners need to meet certain criteria. See the questions below:

 >>> Is your home your primary residence?

 >>> Do you currently live in the home?

>>> Is the amount you owe on your first mortgage equal to or less than $729,750 for a single-family home, $934,200 for a 2 unit property, $1,129,250 for a 3 unit property or $1,403,400 for a 4 unit property?

>>> Are you having trouble paying your mortgage? (For example, have you had a significant increase in your mortgage payment OR reduction in your income OR other hardship that has impacted your income?)

>>> Did you obtain your current mortgage before January 1, 2009?

>>> Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) more than 31 % of your current gross income? To calculate this, divide your first mortgage payment by your gross income (your income before taxes).

If you answered "YES" to more than one of these questions, I encourage you to take the next step and apply for the Home Affordable Modification Program today. To do that, please ask your Bank to give you the Application which is 3 pages max (usually). I want you to know that completing the Application helps the Bank determine if you are eligible for the Home Affordable Modification Program. It in no way binds or obligates you to participate in the program.

 FREQUENT QUESTIONS

Q. What is the Home Affordable Modification Program?

The Home Affordable Modification Program, part of the Making Home Affordable Program announced by the federal government, is designed to help homeowners who are having difficulty making their payments by modifying loans to a level that is affordable for borrowers now and sustainable over the long term.

 Q. How does the Program Work?

Once your Bank receives all of your documents, it will validate your information and check your eligibility. You can expect to hear back from the Bank within 10 business days. If you qualify for the program, you will enter a three month Trial Period Plan where you will make a monthly trial period payment for three months. Making all of your payments during this trial period will demonstrate that you can afford the modified payments and that they work within your budget. You will receive a permanent modification if you successfully make all of your Trial Period Plan payments and you are notified in writing that your modification has been approved.

 Q. If I qualify, how will my mortgage be modified?

The modification may involve some or all of the following changes to your mortgage:

 > Adding past due amounts to the existing balance of your mortgage, as permitted

> Reducing the interest rate on your loan

> Extending the term of your loan

> Delaying your repayment of a portion of the mortgage principal until the end of the loan term

 Q. Will a foreclosure occur if I participate in the Home Affordable Modification Program?

As long as you comply with the terms of the Trial Period Plan, the Bank will not start foreclosure proceedings. If foreclosure proceedings have already started, the Bank will not conduct a foreclosure sale as long as you comply with the terms of the Trial Period Plan. If you do not comply with the terms of the Trial Period Plan and do not work with the Bank to find other foreclosure prevention alternatives for which you may qualify, your loan will be serviced according to its original terms, which could include foreclosure.

 If foreclosure proceedings started prior to you entering into the Home Affordable Modification Program Trial Period Plan, you will need to continue to respond to all notices while in the Trial Period. Not responding to any foreclosure notice could affect your legal rights.

 Q. If I get a Home Affordable Modification, can my modified loan terms ever revert to the original terms?

No. This is one of the advantages of the Home Affordable Modification Program. Once your loan is modified, the new terms stay in place for the remainder of your loan.

 Q. Will my credit score be affected by accepting a trial period plan or loan modification?

Staying current on your payments is the best way to maintain your credit score. However, if you need to enter into a modification, your credit score may be negatively impacted. Your loan will be reported as paying under a partial payment plan during the trial plan, and as modified after the final modification agreement. Credit scores are determined by the credit bureaus and not controlled directly by Banks.

Q. If my loan is permanently modified, will the Bank waive late charges?

Yes

 Q. Are there resources where I can find information about the Home Affordable Modification Program?

Call the Homeowner’s HOPE Hotline at 1.888.995.HOPE (4673). This Hotline can help with questions about the program and offers access to free HUD-certified counseling services in English and Spanish.

 Q. What should I beware of?

> Beware of any person or organization that asks you to PAY a fee in exchange for housing-counseling services or modification of a delinquent loan.

 > Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house.

> Do not sign over the deed to your property to any organization or individual unless you are working directly with your Bank Loan Officer to forgive your debt,

 > Never make your mortgage payments to anyone other than Bank/Lender without the Bank/Lender approval.

SECOND BLOG

Ask your Lender to add the missed payments onto the end of the mortgage term.  That way you could start over fresh. Plus side, you will not have to try to make up the late payments immediately and you get to stay in your home. Negative side, your monthly payments will remain the same and your loan term will be longer to include the past due amount. Most banks provide this service depending on the amount of delinquency, the reason for default and the current status of the loan.  There should be NO FEES associated with this work-out option.

ADDITIONAL INFORMATION

The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD's Federal Housing Administration (FHA). Call 1 (800) 225-5342 for more information.

The U.S. Department of Housing and Urban Development (HUD) has many programs in place to offer government help to stop foreclosures. The HUD web site offers many tips and suggestions for home owners that find themselves in financial difficulty and impending foreclosure. The most important step is to have open communication with your lender.

The federal government has incentive programs in place for the lender to help avoid foreclosure. There is significant assistance available for those who communicate with their lender early in the foreclosure process. HUD also has approved foreclosure counselors who will offer individualized help.

A recent collaboration of HUD/Federal Housing Administration, the Department of Veteran Affairs, the Department of Labor and mortgage lenders have provided valuable information regarding government help to stop foreclosures. If you're facing financial difficulties due to job loss, military service, or natural disasters, there are many programs providing government help to stop foreclosures. Contacting any one of these agencies is an important step in gathering information to help you keep your home.