Foreclosure help Fannie Mae to the rescue

Written by: George Haughton

Foreclosure help will come from unlikely source, Fannie Mae. In fact Fannie Mae now joins Freddie Mac in offering a deed for lease program. Therefore, those facing foreclosure have the option to rent their homes back for a period of time until they get their finances in order. This deed for lease allows the homeowner who failed to qualify for or cannot maintain a loan modification to transfer their deed or their interest in the home to Fannie Mae.

This process is really a deed in lieu of foreclosure,it does not show up on your credit report has a foreclosure. Foreclosure on your credit record prevents you from purchasing another house for at least three years with FHA and five years for conventional loans. Therefore, this program allows a homeowner to pay rent equal to the documented 31% of their monthly income pretax or gross income.

That is welcomed news for the close to one million homeowners who were served foreclosure notices last month. The estimate is that over 18.8 million houses stand empty in the third quarter, which has created a value and vandalism problem.

Therefore, we can say finally the lenders are really looking at the bigger picture. For example in Detroit that city has started to knock down empty blocks of houses and do not have any plans to replace these houses any time soon. Therefore, it makes total business sense to keep the homeowners in these homes and work it out.

This deed for lease does come with out some qualifying guidelines so you might want to look these up before you assume you qualify. For example it must be your primary home you live in. Fannie Mae or Freddie Mac don’t actually make loans to consumers so this foreclosure help is a quick measure to legally keeping homeowners in place, but again what are the guidelines and how long is this period.

Based on what I have read the guaranteed lease period is for one year and month to month after that. This action will ease the minds of many homeowners fighting foreclosure and help keep the neighborhood more stabilize. The truth a lot of these homes have become very hazardous and dangerous. In the state of California some communities speak about pools that are a breading ground for mosquitoes.

Freddie Mac unlike Fannie Mae rental lease is for a month to month.Therefore, what Fannie Mae has done is taken the big uncertainty out of the minds of the homeowners for at least a year. Some are now asking the question is a postponement of the inevitable?

Well the economy is said to be improving. However, some experts who follow the housing issue think the second wave of foreclosures is still in front of us. Therefore, creating an option like “deed for lease” might be an attempt to cushion the blow. This foreclosure help by deed for lease really is the answer for those facing foreclosures now and yet to come?

Fannie Mae Q and A for the deed for lease program
Fannie Mae Guidelines for the deed for lease program

Stay away from these mortgages

In the future of the financial world of mortgages they will require specific warning labels on them to help protect the innocent. For example, if you signed your mortgage papers and noticed that you are losing sleep at night, you might have “mortgageify”. A mortgageify is a solid “if” everything is OK with your credit, job, house, health in the next few months you get to refinance for lower mortgage rates. (egagtrom)

If you notice that your mortgage payments keep going up and not down. Then it is just your lender deciding what mortgage payment you should make, they have thirty years to make that decision. To follow the lenders mortgage plan please get a mortgage calculator. This condition is called “profitforusatyourcost”. The cure for this condition is currently in clinical trial.

If your house is worth less than when you purchased it , then you definitely caught the “appraisalcarenot”. The cause of this condition is based on the idea that the value of your house is determine by the appraiser with the cooperation of the seller, in some special case the lender has to signed off as well. Another idea behind such a condition is what those involved may say," mortgage loan is just paper money anyway so who cares", what’s real is the appraisal. Look out for people like this.

If your lender gave you a choice of mortgage payments to choose from and then decided they will keep changing them by giving you three new payments once a year to pick from , this conditions is known as “wemakethecallus”. The warning label on this kind of mortgage will be watch out for these words: WHY PAY THE MORTGAGE WHEN YOU CAN PAY THE INTEREST?

If you hear words like your credit score is fine, even if it is at 350, just remember this question, what can’t a higher mortgage rate cure? It is true your credit score might go higher in time but most likely your mortgage rate can go even higher yet and fast. There is no scientific prove of this of course but the last credit score this experiment was tried on the homeowner withdraw from the program because they lost their house.

If your lender mention about you becoming a straw buyer because it pays well,but he is not selling or financing a farm for you be very suspicious. THIS CONDITIONS is only curable with time spend in quarantine away from your love ones

When is a house a home? If and when your lender say so. Also a mortgage is not a mortgage until you can afford it. (egagtrom) If you don’t recognize this word it is mortgage spell backwards, that is what your mortgage note looks like if you try to read it. To avoid or stop future foreclosures read your mortgage note and disclosures ,get a second opinion or get some legal advice to understand what you are signing.

Fighting foreclosure means financial education.

egagtrom pronounced: e-gag-trom (cross words puzzle)

Foreclosure Listings Data Bank Lists Homes 20 to 40 Percent Below Market

Foreclosure Listings Data Bank Lists Homes 20 to 40 Percent Below Market

Fighting foreclosure with 31% of your income

Written by : George Haughton

Fighting foreclosure just became interesting for many home owners. I have taken one paragraph out of the president Obamba's speech to analyzes it some more for my understanding and to be able to write or blog about it. The flowing is the paragraph regarding how the government will work with the those in foreclosure:

"If lenders and home buyers work together, and the lender agrees to offer rates that the borrower can afford, we'll make up part of the gap between what the old payments were and what the new payments will be. And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

After reading the speech I got to wondering if this new payment was based on a new rate and current monthly income with a subsidy from the government for the difference? For example if the home owner makes $1000.00 per month then my monthly payments would be about $310 per month. However, what if my original monthly payment was $2000.00, which included my taxes and my income went from $2800.00 to the current $1000.00 will the government pay the difference? I really doubt this could actually be the case but that is how it sounds to some home owner fighting foreclosure. Other say this $310 is based not a traditional 30 mortgage but more like a 500 year mortgage. Fighting foreclosure just got easier.

This is what one reporter wrote quoting the president: "In prepared remarks today in Phoenix, the president said, “Let’s say you earn about $30,000 per year and you find a house that costs $232,500. 31 percent of your monthly income would be about $775, which puts you in a nice comfortable 443-year mortgage at an interest rate of 4.0%, which is fair for someone like you. You win, the banks win, and most importantly, the economy wins."

Again fighting foreclosure not only just got easier but if you can't stop foreclosure with this plan then you don't need to own a home right now.

How do I know if I qualify for this plan? Check the White House Web Site

Foreclosure real estate

Attorneys saw their bankruptcy business slow down after the bankruptcy laws were changed by the government in favor of the credit card companies and most creditors in general. In order words the laws were now stack against the borrower. Due the current home foreclosure crisis the government is now amending the bankruptcy laws to allow the trustee to get some principle reduction or restructuring for the homeowner.

After this brief slow period the attorneys experienced once again a boom in bankruptcy filing, but now the attorneys have added the filing of a possible loan modification. Loan modification could be needed because homeowners are dealing with mortgages that were created in good times with weird guidelines.

When these mortgages went bust in early part of the recession lenders counting on the increase of the equity to cover any lost sustain in a home foreclosure. However, when the housing bubble burst the opposite occurred, property values fell hard.

So with the table turn on the bank they found it difficult to recoup any loss. Real estate as always been a sure bet in the past and banks did not consider that they would take such a nose dive. Typically under normal economic environment homeowner could do a mortgage refinance when they got in trouble. However, these toxic loans push these homeowners to save their loans with loan modification. The lenders finally had to request for help from the government hoping to survive this wave of bad loans; they did not see this coming.

Bankruptcy was an option in the past for homeowners facing foreclosure. Therefore, filing chapter 13 not only stopped foreclosure but could help with debt consolidation. However, now we were dealing with a different types of loans that when went bad they were difficult for the homeowner to handle. For example the sub prime loans came with adjustable rates that would push payments out of the reach of the homeowner. Bankruptcy could not stop that. Most of these borrowers could not refinance into a prime rate mortgage because of their credit or income data.





Another type of loans that went bust was the option arm loan which was structured with an introductory rate as low as 2.9% with a potential increase of additional 6 percent over the life of the loan. Therefore if you started with a rate of 2.9 with an index of 4.5, your effective rate would be 7.40 but you were only require to pay each month the 2.9 interest only. These option arms created a negative amount each month because the borrower was not paying the fully indexed mortgage rate each month based on the 7.40. Therefore, under the prefect conditions these loans could work but with the Libor and Treasure index going up this created a run away mortgage.

Attorney’s across this country is now in demand working with homeowners fighting foreclosure using not only bankruptcy but loan modification. Filing bankruptcy has its limitation, because of loss of equity with homes values falling. Loan modification would not only create a fix rate but increase the numbers of years to pay off the loan. Hopefully the new bankruptcy laws will allow the bankruptcy trustee to obtain such restructuring.

Loan modification stop foreclosure

Written by : George Haughton

Loan modification is designed to stop home foreclosures when used by your lender. Despite this since 2006 Over 2 million homeowners lost their home . The question many continue ask why did so many home loan modification failed to stop foreclosures? Also why do lenders continue to reject request for modification?

The truth is there are more questions than answers to the current foreclosure crisis. In truth a Loan modification is just one solution. Another is forbearance, deed in lieu. short sale or simple refinance.

When it comes to loan modifications lenders continue to take a long time to modify. On the other hand homeowners may wait too long to apply to their lender for help.

Another reason why homeowners failed in these modification can be traced back to the lending restructuring a loan which not affordable. Others got rejected due to high ratios, bills,incomplete documents and no follow through.

However, since 2006 government, lenders, housing counselors have tried different home saving techniques hoping to make a difference, but still unable to stop home foreclosures. The latest product being tried is the streamline loan modification program .

Currently congress is debating many solutions,one of which is the streamline modification . With all these agencies working together fora solution by using the new streamline process.we hope the outcome will manifest itself quickly to prevent any more foreclosure .

Speaking of government, HUD website provides a complete step by step process for those applying for a loan modification . However,there are few problem doing it yourself. For example,understanding the foreclosure laws involve and the time it takes to get through to your lender. There is a "fire wall" between you and your lender .

Maxine Walters the congress woman tried to help a a couple get their loan modify so she tried to reach their lenders (Bank of America ,Indy mac and Countrywide) she was unable to reach the right person at the lenders that could help the homeowners. Due to her experience Maxine Walters is now working on incentives to help the servicers produce more result.

Therefore, applying for a mortgage loan modification, requires time . Attorneys on the other hand have a system in place to get it done. They, do things like mortgage audit, looking for loan violations with in your original package in turn use it to negotiate for a better rates and faster approvals. They also have the various telephone numbers to reach the various right lender contact. This is just few of the options they can use that give them a better approval rate.

HUD WEB SITE

Http://www.hud.gov/foreclosure/foreclosuretips.cfm