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

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