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