| As foreclosure rates continue to dominate the media | | | | The program will make your monthly mortgage |
| and the minds of many Americans, everyone wants to | | | | payment to be 31% of your gross income less taxes |
| know who qualifies and what their options are for a | | | | and insurance. This is your debt to income ratio (DTI). |
| loan modification. We all want a lower balance, we all | | | | They will take you down to the floor interest rate of |
| want a low interest rate, and we all want the ability to | | | | 2%, the maximum 40 year amortization schedule. This |
| keep our home and family's secure. Basically, it comes | | | | rate stays fixed for five years, after which it adjusts |
| down to your financial analysis, your mortgage | | | | up to one percent each year after until it reaches the |
| statement, and your hardship. The next step is the | | | | market cap on the day you sign the new loan terms. |
| most difficult: getting in touch with your lender. | | | | So, this person with these figures has a DTI of 37% |
| Homeowners are against the wall. Many are as much | | | | (You may be between 31-38% to qualify) They did it! |
| as twelve months behind in their payments and seeing | | | | New potential payment at a 2% for 30 years is |
| little movement towards a resolution. The banks are | | | | $1304...thats five hundred dollar savings (27% savings). |
| inundated with requests, documents, faxes, and lastly | | | | To get you down to that 31% DTI, they may draw |
| thousands of irate borrowers. Both parties want a | | | | your amortization to a maximum 40 years, reduce |
| remedy. But where do they meet. They banks say , | | | | principal, put you at 2% interest rate, or any |
| "We have not received your package", or "send it in | | | | combination of the three.This is why the banks do not |
| and we will get back to you in a few weeks". Weeks | | | | want to modify your loan under the HAMP guidelines. |
| go by, you are late another month, and the end of the | | | | Do you see now? Under this plan, you must have a |
| tunnel seems to continue to move further from your | | | | hardship, you do not have to be late, you must live in |
| reach. This is the method many lenders are taking. | | | | the property, and the first mortgage balance must be |
| They do not want to re-negotiate your terms. You | | | | under 729K. So, do you qualify? Go to the government |
| signed a promissory note dictating payments. Why | | | | website for making home affordable to learn more |
| should they give you a discount and lose thousands of | | | | and see if you lender took the TARP money. |
| dollars because you cannot afford your home any | | | | For those of us who have a non TARP accepting |
| longer? Would you? Probably not, unless you are the | | | | lender, you can still get a traditional. There is capability |
| king of altruism, the bearer of generosity. But lets face | | | | for your lender to modify under the HAMP guidelines. |
| it, the banks are not, and honestly speaking, most of us | | | | The attorney cannot force them, but there is still |
| fall out of this category no matter how many times | | | | availibility. the traditional modification will not be as |
| we go to church or give the local homeless man a | | | | strong, but there is still relief. Your case will be |
| few coins. | | | | contingent on your budget, hardship, and your |
| This brings me to my next point. Who do I trust? | | | | mortgage statement. The banks want to make sure if |
| Everyone is a skeptic. We have heard the stories, we | | | | they modify your loan you will be able to make your |
| have seen the frightfully terrified borrower jumping at | | | | payments and not default again. This is why many |
| the first chance, the first guaranteed rate from or | | | | borrowers are denied modification requests. They do |
| whatever company you find online. FYI, no company | | | | not understand how the banks look at their portfolio; so |
| can guarantee a rate, unless they work for your | | | | many times, the homowner must seek legal |
| lender, which is no one. Just think about it: A | | | | representation. |
| modification is a negotiation between the two parties, | | | | What to do next: use a free service, try with your |
| you and them- bottom line! There is no guarantee | | | | lender, or seek an attorney? You need to figure this |
| except for the services rendered. So when you are | | | | out on your own. Is the investment worth it? In the |
| frantically looking for relief, step back, take a breath, | | | | case above, I would say absolutely. The money for |
| maybe even an adult beverage, and do your research! | | | | the 2000-3000 modification will be recouped in six |
| This next move you make is pivotal. Ask yourself: | | | | months, not to mention the savings over the life of the |
| "what do I want from this", "what am I willing to pay, if | | | | loan. It comes down to cost to benefit. You can try |
| any, to have this done", and lastly talk to as many | | | | with your lender- submit your package and hope for |
| people as you can. Its your responsibility, its your home, | | | | the best. Honestly, why would you gamble a great |
| your family. | | | | opportunity like this because you are cheap and |
| The only real way to determine a firms ability to | | | | wanted to continue to buy cigarettes and strawberry |
| produce and insure they are legitimate is working with | | | | shortcake Ben n' Jerrys ice cream? Think of the |
| attorneys. They have a license to accept advance | | | | future, figure your budget, and weigh your options. If |
| fees. Get their license number, look them up in the | | | | you seek legal representation, you want an |
| state they practice in. If they are legitimate, they will be | | | | experienced real estate attorney, 100% money back |
| listed. They will not forfeit their license to practice law | | | | guarantee, and a forensic loan audit to look over loan |
| for your tiny amount of money. Only attorneys and | | | | documents for any predatory lending violations. You |
| approved DRE organizations have this ability. So if | | | | may be entitled to more than you think if the audit |
| John Williams Booth is calling you saying a fixed 4.278 | | | | comes back positive. Can you say 20K principal |
| and it will cost you only $2000, ask him about the | | | | reduction? Maybe you should start practicing in the |
| process, ask him his companies history, ask about his | | | | mirror. |
| attorneys. If they cannot give you a legitimate answer | | | | Anyhow, there is a vast amount of knowledge on the |
| to any of these basic questions, I would save your | | | | internet. Talk to everyone you know, see what they |
| money for someone else. Once you find a company | | | | are doing, see why they went this way or the other. |
| that sounds good, check them out online. Do your | | | | You still have time. However, many lenders are |
| homework. Contrary to Alice Cooper: school is not out | | | | GIVING the TARP money back, leaving thousands of |
| for summer. | | | | Americans high and dry, excluded from the HAMP. |
| Here is a scenario: 200k balance, Wells Fargo, 6.7% | | | | Ultimately, you want to make the best move. If this |
| interest rate (1290 payment+ 350 taxes+80 ins.+ 120 | | | | means having to wait on hold for one month with your |
| HOA= $1855), late 3 months, lost job( $1300 in | | | | lender to get a response or pay an attorney's fee of |
| unemployment), spouse still employed ($2000)... You | | | | $3000, make sure this is your best move. If you do not |
| may be eligible for the HAMP- the best modification on | | | | know how to change your brakes, are you going to |
| the market. WARNING: your lender may be fishing for | | | | gamble with your life and others? Easy question. |
| your information to disqualify you from this program... | | | | If you would like further advice you can take a look at |
| you only have one shot at this program. This is why. | | | | my profile.Take care and best of luck. |