Mortgage Modification

Stimulus, Stimulus, take advantage of your own "personal bailout." In these economically challenging times, we all could use a little assistance to help moderate the "sinking ship" feeling. Contact the firm and we can guide you through the mortgage modification process, to ultimately, upon qualification, secure more affordable terms on your mortagage. Don't wait till its too late call today for a consultation. Please read below for more information on what the "Making Home Affordable" stimulus includes.

Working with a third-party lawyer can greatly increase your chances of getting your loan modified. As loan modification requests pour in, lenders will be overloaded, and homeowners may be declined even for the most straightforward applications. A loan modification attorney can help you tailor your request to suit the requirements of your particular lender for a higher probability for success. They can also help you explore other options, such as bankruptcy and short sales, or better strategies for settling a loan modification with the best results.

• Mortgages for single-family properties that are worth more than $729,750 are excluded.
• Interest rates can be lowered to as low as 2 percent and then if necessary, the term of the loan can be extended to a maximum of 40 years.
• The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill). The home may not be investor-owned.
• The home may not be vacant or condemned.
• Borrowers must provide their most recent tax return and two pay stubs, as well as an "affidavit of financial hardship" to qualify.
• Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.
• Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
• Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1, 2009 or earlier.
• Eligibility is restricted to loans originated on or before Jan. 1, 2009.
• Incentives are provided to extinguish second liens on loans modified under the program.
• Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years.
• Separately, up to 5 million borrowers who have mortgages held by government controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010.

The Obama administration has enacted legislation to stabilize the many faltering mortgages. The $275 billion housing stimulus program titled "Making Home Affordable," includes $75 billion in foreclosure-relief targeted at the 1 in 5 US homeowners who owe more than their house is worth. The effort includes a mortgage-modification program intended for up to 4 million borrowers.

Each borrower will be screened based on highly exact terms: Loan amounts may not exceed $729,750 for a single-family home, with higher limits on multiple-unit homes; it must be verified that the home serves as the primary residence for its owner occupant; the home­owner must document that he or she has suffered financial hardship, limiting income – whether through loss of a job, initial deceit regarding income during the underwriting process, or failure of the lender to apply income documentation standards; and, most important, there must be an outstanding loan balance greater than the value of the home.

You don't have to be behind on your mortgage payments to qualify, and no minimum or maximum loan-to-home value ratio is set.

In addition, those who qualify will be required to participate in debt counseling. Such advice is necessary so homeowners don't build another negative mortgage record, as they may qualify only once for a loan modification through Dec. 31, 2012.

For those who do qualify, lenders and the US Treasury will jointly reduce payments to 31 percent of a borrower's income and offer a bonus of up to $5,000 in principal loan reduction – $1,000 a year for five years – for timely payments.

Don't fit those qualifications? Don't panic. Perhaps your remedy is the newly heralded refinance program expected to target another 5 million homeowners. This program is directed at homeowners with home loans from Fannie Mae or Freddie Mac. The two mortgage finance companies own or guarantee more than half of the nation's 52 million mortgages.

In order to qualify for more affordable, fixed-rate loans, homeowner's existing loans must be in good standing and their home's value must be no more than 5 percent below what they owe on it. Applications for this program must be filed no later than June 2010.

Another option, this time for first-time home buyers, is the $8,000 refundable tax-credit program for those who purchase a home in 2009. This measure was part of the economic stimulus package signed by President Obama last month.

*Mortgage help: a Goldilocks approach

http://www.csmonitor.com/2009/0309/p16s01-wmgn.html

*US Treasury

http://www.treas.gov/news/index1.html