Last week, I touched briefly on Loan Modifications and it looks like they have hit the main-stream news!  Today, there was a feature article in the New York Times about loan modifications and it highlighted one of the companies that I have been working with for a few weeks now — LoanSafe.

Some highlights in the story about LoanSafe and quotes from it’s CEO Moe Bedard include:

• LoanSafe charges a flat fee to analyze loans and according to Moe, they have found problems in at least 80 percent of the 300 or so mortgages they have examined.
• Among the problems found were notary problems, Truth-in-Lending-Act (TILA) violations and Real Estate Settlement Procedures Act (RESPA) violations.
• One common violation occurs when the interest rates or fees change between the time a borrower initially receives a cost estimate on the mortgage and when the borrower actually closes the loan.

According to Moe:

“When presented with these findings, most lenders and servicers quickly agree to a loan modification and many of the deals that my firm has arranged have an initial interest rates in the 3 percent range.”

Could you afford your mortgage payment if you had your lender modify it to a 5.5% fixed rate?

If so, let me know and I can put you in touch with the best in the business.

This week I talked to more than one person who wants to refinance their loan because they are in an adjustable rate that is going to adjust or has adjusted recently — but they owe more than their house is worth.  According to today’s Arizona Republic, the ARM Resets are peaking in July.

Are you in this boat?

If you are currently in an FHA loan, you may be able to do a no-appraisal FHA Streamline and it won’t matter that you owe more than your house is worth.  That is good news for the small number of people who are currently in an FHA loan!  For the rest of the people who are currently NOT in an FHA loan, there is still hope — recently, lenders have become more and more willing to work with people to do a “loan workout” or a “loan modification”.

This is a new area for lenders — previous to a few months ago, lenders generally were only interested in “getting their money back”, but with the record number of people who are facing serious difficulty paying their mortgage, lenders are becoming more and more willing to be flexible so that you can stay in your home and that the lender doesn’t incur the costs of foreclosure.

Loan modifications can take a number of different roads — from extending the initial interest rate for another X years (5 seems to be common), to reducing the amount that you owe (called a principal reduction), to getting you into a completely new fixed-rate loan, to… well, there are any number of possibilities.

The key part to beginning the loan modification process is to PICK UP THE PHONE AND CALL YOUR LENDER.  Some lenders are easier to work with than others — so if you run into a lender who is not willing to work with you, there are still people who can help you.

This week, Justin was in Corona, California meeting with a couple of different organizations who have attorneys on staff and whose mission is to help homeowners who are facing serious trouble regarding their mortgage.  They have helped hundreds of people and will help thousands more over the next few months.  They are the best in the industry and take pride in working with lenders to get people into affordable mortgage programs by going through the loan modification process.

Have you tried to refinance but been told that you can’t because you owe more than your house is worth?

Contact me and I will be happy to put you in touch with the right people who can work with your lender on your behalf to help you get out from under your current toxic mortgage!

Back in February, I reported that HUD had begun mailing 280,000 mailers to homeowners urging them to look at the FHA Secure Mortgage program and commented:

“In a press release, HUD officials HUD officials said the first round of 280,000 letters was sent this week with another 570,000 letters to be sent through September 2008.”

Yesterday it was announced that HUD was now going to drop part 2 of their mail campaign for the FHA Secure Mortgage program — by mailing out 670,000 more mailers.  If you are having trouble paying your mortgage, chances are you might be getting a letter from HUD with the following content:

Dear Homeowner,

Do you need help with your mortgage?

Your area is experiencing a disturbing home foreclosure rate that has accelerated in recent months. News reports cite the damaging effects of “sub prime loans” as a major factor in the unsettled market. By focusing on education and safe mortgage alternatives, though, the Federal Housing Administration (FHA) of the United States Department of Housing and Urban Development (HUD) is working diligently to address this unacceptable foreclosure trend.

Over the past few months, FHA has worked with mortgage loan servicers to identify solutions for the crisis facing current homeowners. Your current mortgage does not have to be FHA insured for you to benefit from our help. If you are facing financial difficulties due to a recent or imminent mortgage reset, or other housing-related difficulty, I urge you to contact us at 1 (800) CALL-FHA or to visit www.fha.gov. There you will have the opportunity to learn about foreclosure prevention, legal rights, and credit counseling, among other topics.

Many homeowners may also be able to take advantage of our recently announced FHASecure program. This new program allows eligible homeowners to refinance into a secure, fixed-rate FHA loan even if they are in default.

Additionally, a new partnership between mortgage companies and non-profit housing counselors called HOPE NOW is available to you. Their mission is simple: reach out to homeowners who may be having difficulty paying their mortgages. For more information or to see if your mortgage company is a member of this caring coalition please go to www.hopenow.com.

Again, please contact us at 1 (800) CALL-FHA (800-225-5342) or go to www.fha.gov. As part of the federal government, the Federal Housing Administration wants to help you protect and preserve the American dream - your home.

Sincerely,

Brian D. Montgomery
Assistant Secretary for Housing
Federal Housing Commissioner

According to the press release, the FHA Secure Mortgage program “allows borrowers who are current and delinquent on their loans to refinance with the FHA, is saving tens of thousands of families on average $400 a month compared to their exotic subprime loans.”

So if you are having problems paying your mortgage and are currently in a subprime loan, take the time to speak to a mortgage professional and find out if the FHA Secure Mortgage program is right for you.

I am happy to announce that we have officially launched Arizona Mortgage Team — a new blog aimed at covering all-things related to the Arizona mortgage market.  Take a minute and stop by!

If you have reached the point where you recognize that you can’t make your mortgage payments going forward, it is time to act. The best time to act is as soon as you realize that you are not going to be able to make your payments… Don’t delay!

If you aren’t interested in keeping your home – skip the rest of this post and learn about – “Jingle Mail!”

If you want to keep your house, here are five simple steps to follow that could end up saving your house.

1. Do Something.
2. Start With Your Current Lender.
3. See If You Can Qualify For a “Regular” Refinancing Option
4. Talk To A Housing Counselor
5. Sell Your Home

Step 1 – Do Something.
So… you are currently late on your mortgage. The future of making your mortgage payment as it now stands seems like an impossible mountain to climb.

You may be 30 days late.

You may be 60 days late.

You may be 90 days late.

You may have been 30 days late for 3 months running.

For this step in the process, it doesn’t really matter how many lates you have had in the past 12 months or how many days late each of those lates were… if you are in the situation where you are currently late on your payment…

DO SOMETHING!

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According to an article by the AP, there are several plans circulating the House, Senate and White House that call for expanding the FHA programs to help struggling homeowners with an option to save their house.

While nothing has passed yet, the bills are gaining a lot of attention because many homeowners have no current option to refinance their home due to the fact that it is “under water” — meaning they owe more than their home is worth.

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Who is FHA Secure helping…?

I wanted to give some “success” stories to allow you to gauge where you may fall in the very wide spectrum of borrowers that take advantage of the FHA programs. There are several benefits to government insured loans that many continue to find a mystery and thus fail to take advantage of them.

My borrowers are a young married couple that just recently closed on a FHA refinance. When I received their call I could hear the stress in Randy’s voice and as he recited his situation I could tell he had it well rehearsed due to telling it to numerous loan officers. He told me that he purchased their first home two years ago at an interest rate of 9% and that in a month it was getting ready to adjust. He speculated that the reason he was given such a high interest rate initially was because his and his wife’s credit scores were very low due to all the medical collections they had. His son was born with a severe illness and required many surgeries, as well as repeated doctor visits and rehab appointments. They described that as the bills continued to pile up it just became over whelming and seemed like there was no way out. The result was credit scores lower than what they were when they purchased the home (below 580 FICO).

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Yesterday, the Bush administration announced an expansion of the FHA Secure mortgage program that is aimed at helping more homeowners who are struggling with their mortgages.

According to the Bush administration, the FHA Secure mortgage expansion program is designed to help about 100,000 homeowners with expanded FHA refinancing options, including many who owe more than their houses are worth, reduce their monthly payments. The expansion will involve getting lenders to write down the value of the loans during an FHA refinance, and in return, shift the the risk of default to the government.

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According to the Wall Street Journal, the Bush administration is going to announce an expansion of the FHA Secure Mortgage program that is aimed at helping more homeowners who are struggling with their mortgages.

According to the Bush administration, the FHA Secure Expansion program will be announced Wednesday and is designed to help about 100,000 homeowners, including many who owe more than their houses are worth, reduce their monthly payments. The expansion will involve getting lenders to write down the value of the loans, and in return, shift the the risk of default to the government.

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Recently it was announced that the FHA Secure mortgage program has helped over 100,000 homeowners since it was announced. There has been much said about how FHA Secure may not be helping as many people as it was intended for, but if this recent announcement is any indication, the FHA Secure mortgage program is seemingly very active as an FHA refinancing option for people who can qualify.

From the HUD Press Release:

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