Are you having trouble making your mortgage payment?  Pick up the phone and call your lender.  You are not alone and many people are in your same situation.

Because so many people in today’s world are having trouble making their mortgage payments on time, lenders are hiring people in their “loss mitigation” departments so there is a better chance than ever before that you can actually talk with someone.

When talking to your lender, here are a few of the ways that they could possibly help you if you are having trouble making your mortgage payments:

1. They could be willing to accept a partial monthly payment for a period of time and put the rest of the payment that you can’t afford to pay into the principal balance of the loan. Effectively, they will allow you to “tack on” money that you owe to the back of the loan. This might be a good solution if you are experiencing a temporary situation such as job loss or a short-term illness or family situation.

2. They could allow you to “skip” a payment (or two?) and have the missed payment added into the total loan amount. Again, this may be a solution if the financial problems that you are experiencing are temporary.

3. They could waive late payment fees that may have accumulated. This may be a solution if you have several late payments already and are just trying to get caught up. This is probably the simplest option of all of these listed.

4. They could set up a payment plan with you for an extended period of time (think 12-36 months) where they will add a fraction of your outstanding loan payments to your payment each month until you are caught up. For example, if you are currently $2,400 behind, you might be able to set up a payment plan where you pay $100 extra each month for 24 months.

5. They could offer you a completely new loan with a new amortization schedule. I see this happen the most when people use a loan modification company to help them negotiate with the lender. Usually, the loan modification company is getting people a 5.X% 30 year fixed rate (better than you could get refinancing in today’s market). The reason that the loan modification company is usually able to do better than just the consumer in negotiating this is because there are truth-in-lending (or similar) violations in the original loan and they use that to your advantage to pressure the loan servicing company into giving you a competitive fixed rate.

6. They could simply do a “principal reduction”. I see this happen most often in some combination with #5 and when done by a loan modification. Most of the time, it seems that consumers are just not aware or savvy enough (who would be?) to know all of the options that are available to them but a principal reduction is more common than you may think in today’s world.

These are only some of the things that are possible when working with your current lender if you are having problems making your payment.  I am sure there are more ways that a lender can be creative if they want to help you — and when it costs so much to actually foreclose on someone, believe it or not… lenders just want you to make your payments — they don’t actually want your house!

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!

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!

Freddie Mac (NYSE:FRE) announced today that 92 percent of prime borrowers who had a 1 year ARM chose a conforming fixed rate mortgage when they refinanced in the 4th quarter of 2007.

According to Amy Crews Cutts, deputy chief economist for Freddie Mac, the reason for the conforming 30 year fixed rate mortgage’s dominance was twofold — few adjustable rate mortgage choices available due to tighter lending standards and low interest rates on fixed rate mortgages.

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A surge in refinancing is taking place following the recent rate cut by the Fed.  According to Reuters, applications at mortgage banks have surged anywhere between 50 and 230% — all while mortgage rates have reached their lowest level in 4 years. Yesterday, Freddie mac said that mortgage rates had fallen for the fourth consecutive week to their lowest level in almost 4 years — with the 30-year fixed rate conventional loan averaging 5.48 percent.

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