GOVERNMENT MORTGAGE SOLUTIONS (Choose):

> NEW!  Mortgage Bailout Help HERE

> Fannie Mae, Freddie Mac Government Bailout HERE

> FHA Foreclosure Prevention Act HERE

> Behind in your Mortgage Information HERE

> $7,500 First Time Home Buyer Tax Credit HERE

Press Release today from Fannie Mae -

WASHINGTON, DC — In order to support the streamlined modification program announced on November 11, 2008, Fannie Mae (NYSE:FNM) today issued a notice to its loan servicing organizations and retained foreclosure attorneys directing them to suspend foreclosure sales on occupied single-family properties as well as the completion of evictions from occupied single-family properties scheduled to occur from November 26, 2008 until January 9, 2009.

The temporary suspension of foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with mortgage servicers to implement the streamlined modification program scheduled to launch December 15. Foreclosure attorneys and loan servicers will be instructed to use the additional time to reach out to borrowers who have defaulted on their loans and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie Mae.

The streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure.

“The streamlined modification program by Fannie Mae, Freddie Mac, Hope Now and 27 mortgage servicers is an important step forward in addressing the systemic issues driving the increase in foreclosures,” said Fannie Mae President and Chief Executive Officer Herb Allison. “Until the streamlined modification program is fully implemented, we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes. We encourage other servicers of non-GSE mortgages to participate in the streamlined modification program to bolster our collective efforts to stem the foreclosure crisis.”

Fannie Mae will be working with foreclosure attorneys and servicers to reach out to the more than 10,000 borrowers the company estimates would be affected during this period. Borrowers who have Fannie Mae loans that are scheduled for foreclosure between November 26, 2008 and January 9, 2009, will be contacted directly by the attorney handling the foreclosure. If the home is occupied, Fannie Mae has instructed servicers and attorneys to suspend the foreclosure.

Allison also said Fannie Mae’s loan servicers are prepared to work with borrowers during this period, even if previous workout efforts have been unsuccessful. As part of the company’s “Second Look” initiative, Fannie Mae personnel have been reviewing seriously delinquent loans to determine if the borrower has been contacted and all workout options have been exhausted.

The streamlined modification program and temporary suspension of foreclosures are two of a series of steps Fannie Mae has taken to expand its foreclosure prevention efforts, which are designed to give loan servicers and foreclosure attorneys tools to find the best solution for a borrower in financial trouble. Fannie Mae and its many partners in the housing industry urge borrowers in financial difficulty to reach out to their loan servicers, regardless of whether they are facing imminent foreclosure. Solutions may be available that could make an existing mortgage more affordable.

“Fannie Mae is committed to working with FHFA to implement the streamlined modification program as quickly as possible to help prevent unnecessary foreclosures,” Allison said. “We must and will do more.”

 http://www.fanniemae.com/

In our continued efforts to bring to your attention the fact that you must be extremely careful when considering a loan modification company, here’s another great article that warns of the “red-flags” you should look out for when searching for help.

Here is a great article from CNN Money that you must read:

NEW YORK (CNNMoney.com) — If mortgage lending was the Wild West during the boom years, foreclosure-prevention counseling is the lucrative new frontier of the bust.

Nearly 1.6 million borrowers are in jeopardy of losing their homes this year, according to economist Mark Zandi of Moody’s Economy.com, and thousands of new foreclosure-rescue companies are rushing in to offer the troubled homeowners loan work-out assistance. For a price.

Usually homeowners seeking mortgage modifications call their lenders directly or work with non-profit community groups. But many borrowers are now turning to for-profit companies as their mailboxes are flooded with work-out offers.

Each day private firms go online or visit courthouses across the country to pore over foreclosure filings, which are public records. “By 10 or 11 o’clock, they’ve mailed out solicitations to anyone with a foreclosure filing that day, promising to save their homes,” says Jeff Hart, a prosecutor with the Ohio attorney general’s office.

Once a borrower contacts a foreclosure-prevention company, the counselor takes their financial information, analyzes how much the client can afford, and then contacts the lender and negotiates new mortgage terms.

Those modifications can involve reducing interest rates, lengthening the term of the loan or even lowering principal. In exchange, the consumer agrees to pay a fee, generally between a month’s mortgage payment and 1% of the mortgage’s principal.

“We attack the case from many different angles,” said Justin Pane, vice president of Amerimod Modification Agency, which Pane said has been doing foreclosure prevention modifications for about three years. “We may do a forensic document audit, for example,” he added, which involves examining original mortgage papers to see if anything illegal or unethical was signed during closing. If so, it can be used as leverage for a better deal from lenders.

There are other tricks of the trade, too. Pane said it’s often beneficial to apply for modifications near the end of fiscal quarters when lenders want non-performing loans placed back in the performing columns. The more loans they can transfer, the better their numbers look in SEC filings. As a result, lenders will often be more generous in their modification offers at that time.

Lifestyle counseling is another often-necessary service. “We tell people what they have to do,” said Donnie Shorts, owner of Mortgage Mitigation Services in Dallas. “Get rid of that cable. Sell that Escalade. If we can’t present a good case to the lender that these borrowers have changed, we’re dead in the water.”

But is it wise for troubled borrowers to pay stiff premiums for services they can get for free? Especially when paying for a modification can make one harder to obtain because borrowers have less cash to spend on reducing debt.

“Folks need to be really careful,” said Chris Kukla, a spokesman for the Center for Responsible Lending. “In many cases, these are no better than scams. You should look at all your low-price or free options before signing on with a for-profit company.”

One of the main criticisms of for-profit foreclosure counselors is that they are not regulated, with oversight laws varying state by state. As a result, some marginal characters are drawn to the industry, ones who use high-pressure sales tactics and play on fear.

Many firms demand hefty up-front fees, which they keep even if a loan is not successfully modified. Only a dozen states, including Minnesota, New Jersey, New York, Nevada, Massachusetts and Maryland, prohibit that tactic.

“Loan modification is a growth industry, with too few rules governing those selling loan mod services,” said Kurt Eggert, a law professor at the Chapman University School of Law.

And, in fact, many consumers who sign on with a for-profit counselor later ended up at a non-profit. “A lot of people come in [to our offices] who have paid money, a couple of thousand sometimes, for foreclosure prevention and nothing is done for them” said Jenelle Dame, a counselor for the East Side Organizing Project (ESOP) in Cleveland. “These companies are sending out postcards to people saying they can help. Some borrowers get like 50 a day.”

“The lenders still make the same calculations,” added Eggert. “Whether they’re better off modifying a mortgage or letting the loan go to foreclosure is not affected by who’s arranging the modification.”

Terry Souers, who handles many mortgage-modification cases for Genworth Financial, the private mortgage insurer, said his company will work with a for-profit if a client asks, but those requests are minimal. “We don’t recommend them,” he said. “We can do what they do for free.”

Borrowers can protect themselves several ways. Start by checking with the Better Business Bureau and state attorneys-general consumer-protection offices for complaints against the firms. Also ask any potential foreclosure-prevention counselor how many cases they’ve successfully completed and what kinds of loans are winning workouts.

“These companies don’t seem very transparent about their credentials. If you’re not getting answers you trust, look elsewhere,” said Marietta Rodriguez, director of homeowner programs for NeighborWorks, a community development group.

“Be leery of up front fees,” advised Don Lampe, a North Carolina attorney who has testified before Congress on mortgage issues. Many companies who charge them simply take the money and run. The fees should be contingent on a successful modification.

Finally, watch out for extravagant promises. “If they claim they can save your home before even speaking to you, they’re making it up,” said prosecutor Hart.

Before contracting with a for-profit company, at-risk borrowers should contact their lenders or the Homeowner’s Help Hotline (1-888-995-HOPE) run by the Homeowner’s Preservation Foundation. They might get a comprehensive, affordable mortgage modification that won’t cost them a dime.”

It is certainly true that there are free options available for home owners in trouble, however, many of these services are not always as successful as for profit services due to thier motivation.

At HelpUmodify.org we speak with frustrated home owners every single day that have reached thier wit’s end with trying to deal with lenders, servicers and counceling services.  The simple fact of the matter is that there is no motivation for these folks to work with you.  I know, it’s a crime, but it’s true!

Don’t get me wrong, i’m not telling you that those options do not work, i’m only saying that I’ve heard the same stories over and over again about lenders being rude and stand offish and free counceling services simply reading a pre-prepared “guideline” for you to use while approaching the lenders to ask for help.

If this path works for you and you are able to get results - that’s FANTASTIC!  I am going to assume though that you are not reading this because you have found a solution to your families challenges.

Take a look at our web site - www.helpUmodify.org We are a low cost, progress payment solution based on results.  There are never any up front fees and we are committed to consumer protection by educating you about your options.

We understand that these are challenging times and I hope that this information finds you and helps you to navigate this event in a way that works for you and your family.

This article I found in the LATimes online does a great job of bringing to the public the challenges we experience almost daily while working with struggling home owners trying to stave off foreclosure.

There are still some vital parts of the the “main street” bail out plan that are missing.  First and foremost is the inclusion of the term “preventable foreclosure” that is included in every modification and workout plan presented by the government.

One of the greatest challenges that home owners are having is the fact that the “creative” loan that is now causing all the problems was manipulated by the loan originator and in most cases included fraud.

Let’s hope that if these types of reports keep surfacing, that the lenders and servicers will finally come up with a solution to this debacle that actually helps home owners stay in their homes.

Here’s the LA Times story I am talking about:

The initial reaction suggests Hope for Homeowners could be just the latest in a series of government and industry efforts that have failed to stem the rising tide of foreclosures.

“None of them have worked very well, and we’re all pretty disappointed,” said fair-housing advocate John Taylor, president of the National Community Reinvestment Coalition.

The experience with Hope for Homeowners has implications for foreclosure-prevention proposals said to be under discussion by the Treasury Department and the White House, including the Bair plan, which would use $50 billion from the $700-billion financial bailout legislation to provide government backing for modified mortgages. A potential model for that plan is an effort the FDIC is undertaking at Pasadena’s failed IndyMac Bank that calls for cutting interest rates to as low as 2.5%, extending loan terms to 40 years and allowing borrowers to make payments on only a portion of what’s owed.

The Bush administration is also reportedly considering a proposal by the mortgage industry to split loan losses with the government, costing taxpayers about $50 billion.

Andrew Gray, a spokesman for Bair, said it “would be premature to read into or draw conclusions on the process at this time.” White House and Treasury officials didn’t respond to requests for comment.

For lenders who originated the troubled loans, and the investors in mortgage securities who now own most of them, a major downside to the Hope for Homeowners program is that they must accept a big loss on each loan refinanced through the program.

For a borrower to participate, the owner of the existing loan — usually investors in mortgage-backed securities — must agree to accept as repayment the proceeds of the borrower’s replacement loan, which isn’t to exceed 90% of the revised value of the home.

But sharp declines in home prices have left many recent home buyers owing much more than their properties are worth, meaning lenders would have to forsake a substantial portion of the amounts currently owed to them.

In addition, the program requires the borrower to pay an upfront FHA insurance premium of 3%. Because applicants probably won’t have the funds on hand to pay that fee, they would have to borrow it as part of the new loan — essentially capping the refinanced loan at 87% of the home’s value.

For example, if a borrower owes $360,000 on a house now appraised by FHA at $300,000, the borrower’s new loan would be for $270,000, but only $261,000 would go to the owner of the existing loan. The bottom line: a loss of $99,000, or 27.5%.

It’s not just owners of existing mortgages who find Hope for Homeowners unattractive.

Jeff Lazerson, a mortgage broker in Laguna Niguel, said he had yet to find a single lender he works with who would write a Hope for Homeowners loan.

The main reason, he said, is that FHA insurance isn’t valid if the borrower misses the first payment, and lenders believe that is a much bigger risk with Hope for Homeowners loans than with regular FHA mortgages.

“They think they’re going to get all the train-wreck mortgages that the other lenders want to dump,” said Lazerson, president of Mortgage Grader, an Internet-based loan shopping site.

Borrowers also see drawbacks in Hope for Homeowners. In addition to sharing any future appreciation in their home’s value, borrowers must pay an annual insurance premium of 1.5% of the loan balance, nearly three times the usual FHA fee. That premium, on top of the interest rate, would mean a borrower would pay as much as 8.5% annually.

Plus, any borrower whose income was overstated on the application for the original loan is barred from the Hope for Homeowners program, regardless of whether they knowingly participated. That eliminates a large number of housing boom-era loans that allowed borrowers to state their income without verification.”

The best course of still appears to be to continue to put the screws on lenders and servicers and force them come up with easier and more streamlined solutions to helping folks keep their homes.

I always encourage you to go as far as you can on your own.  Some servicers and lenders are cooperating with home owners and trying to help, where as others treat families like they have a communicable disease making it nearly impossible to find a solution without third party help.

I recommend that if you are running into road blocks with your lender or servicer and need to get a third party negotiator involved, take a look at www.helpUmodify.org

helpUmodify.org does not charge upfront fees and offers a very reasonable progress payment solution based on results as you navigate your way through the modification or workout process.

There’s a lot of buzz today about the FHA working with Fannie and Freddie to encourage work out solutions for troubled home owners and avoid foreclosures.  I found this AP article on Yahoo News - this story is one of many with different angles about how to feel about this move.

Read the story here:

“WASHINGTON (AP) — Once again, the government has offered another plan to help troubled homeowners. Once again, critics say it doesn’t go far enough.

The plan announced Tuesday by federal officials and mortgage giants Fannie Mae and Freddie Mac sounds sweeping in its approach: Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable.

But there’s a catch. The plan focuses on loans Fannie and Freddie own or guarantee. They are the dominant players in the U.S. mortgage market but represent only 20 percent of delinquent loans.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., said the plan “falls short of what is needed to achieve wide-scale modifications of distressed mortgages.”

With the government spending billions to aid distressed banks, “we must also devote some of that money to fixing the front-end problem: too many unaffordable home loans,” Bair said in a statement.

Democrats on Capitol Hill aren’t satisfied, either. “When the loan is chopped up into a million pieces and any investor can block a modification from happening, a program like this will only scratch the surface of the mortgage crisis,” said Sen. Charles Schumer, D-N.Y.

The economic crisis is still unnerving Wall Street. Stocks fell again as investors found few industries safe from the consumer spending slump. With Starbucks Corp. and luxury homebuilder Toll Brothers Inc. both posting disappointing quarterly results, the Dow Jones industrial average closed down nearly 180 points.

The financial crisis took on a new dimension on Capitol Hill. House Speaker Nancy Pelosi called for “emergency and limited financial assistance” for the battered auto industry and urged the outgoing Bush administration to join lawmakers in reaching a quick compromise during a postelection session of Congress.

The new mortgage assistance plan was announced by the Federal Housing Finance Agency, which seized control of Fannie and Freddie in September, and other government and industry officials.

Officials say they hope the new approach, which takes effect Dec. 15, will become a model for loan servicing companies that collect mortgage payments and distribute them to investors. These companies have been roundly criticized for being slow to respond to a surge in defaults.

James Lockhart, director of the housing finance agency, urged investors to “rapidly adopt this program as the industry standard.”

Still, government officials had no estimate of how many homeowners would be able to qualify. Fannie and Freddie own or guarantee nearly 31 million U.S. mortgages, or nearly six of every 10 outstanding. But they have far lower overall delinquency rates — under 2 percent.

To qualify, borrowers would have to be at least three months behind on their home loans and would have to owe 90 percent or more than the home is worth. Investors who do not occupy their homes would be excluded, as would borrowers who have filed for bankruptcy.

Qualified borrowers would get help in several ways: The interest rate would be reduced so that they would not pay more than 38 percent of their gross income on housing expenses. Another option is for loans to be extended to 40 years from 30, and for some of the principal to be deferred, interest-free.

Though lenders have beefed up their efforts to aid borrowers over the past year, their action hasn’t kept up with the worst housing recession in decades.

More than 4 million American homeowners, or 9 percent of borrowers with a mortgage, were either behind on their payments or in foreclosure at the end of June, according to the most recent data from the Mortgage Bankers Association.

Indeed, Tuesday’s announcement comes too late for Troy Courtney, a 44-year-old San Francisco police officer.

He moved out of his home in Mill Valley, Calif., earlier this month — taking his children, three dogs and one cat with him — after failing at several attempts to get a loan modification or a short sale. A short sale occurs when the lender agrees to receive less than the loan is worth.

Courtney worked overtime and tapped into his retirement account to try to catch up with two loans on his home. But in the end, he couldn’t persuade Countrywide Financial, which managed the loan for Wells Fargo, to modify the loan.

“I feel like I missed the boat,” he said of the new efforts to help more homeowners. “I’m just mad at the whole system.”

One reason the problem has been so tough to solve for borrowers such as Courtney is that the vast majority of troubled loans were packaged into complex investments that have proved extremely hard to unwind.

Deutsche Bank estimates more than 80 percent of the $1.8 trillion in outstanding troubled loans have been packaged and sold in slices to investors worldwide. Most of those loans won’t likely be helped by the new plan.

The rest are “whole loans,” which are easier to modify because they have only one owner.

Still, after more than a year of slow and weak initiatives, there seems to be a serious effort among major retail banks to get at the heart of the credit crisis: falling U.S. home prices and record foreclosures.

Citigroup said Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments.

JPMorgan Chase & Co. last month expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 customers. The bank already has modified about $40 billion in mortgages, helping 250,000 customers since early 2007.

Starting Dec. 1, Bank of America Corp. plans to modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion legal settlement reached with 11 states in early October.”

Although all of this is moving in the right direction ultimately, I still feel that it’s not easy enough for clients to communicate with servicers and lenders. Home owners continue to be put through a horrible experience asking for help on their loans.

Third party loan modification companies can be a huge help if they are legitimate and do not charge up front fees for their services.

Start your search here - www.helpUmodify.org offers progress payments based on results.  It’s a great, low cost and effective solution to battling with uncoperative lenders and servicers.

I posted this story originally www.helpUmodify.net

I ran accross this story today on CNNMoney.com and this is great news as servicers are finally beginning to “get it”.  Until servicers follow the lead by JP Morgan, Citi, B of A we are going to continue to see displaced famailies and rising foreclosures.  This is an extremely positive  move that hopefully is just the beginning.

“NEW YORK (CNNMoney.com) — Citigroup says it will expand its foreclosure prevention efforts and try to keep 130,000 troubled borrowers with $20 billion in mortgages in their homes.

The news follows similar initiatives announced earlier this year by IndyMac Bank, which was seized by the Federal Deposit Insurance Corp. last summer, as well as Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) each of which heralded enhanced housing rescue efforts.

Banks are undoubtedly feeling pressured to be more aggressive in aiding home owners, given how many billions of taxpayer dollars have poured into the industry to stem the credit crisis.

The Citi (C, Fortune 500) effort, dubbed the Citi Homeownership Assistance Program, targets 500,000 Citi borrowers. CitiMortgages CEO Sanjiv Das said he expects that more than a quarter of these people, with mortgages worth about $20 billion, will take advantage of the program over the next six months.

“We’re reaching out to borrowers in areas of steeper-than-usual falling prices and higher-than-average unemployment,” said Das, including California, Michigan, Florida, Nevada, Ohio and Arizona. “These areas are where the concentration of at-risk mortgages are the highest.”

The new initiative differs from Citi’s existing mortgage mitigation efforts in that it’s a much more proactive plan, said Eric Eve, Senior Vice President, Global Community Relations for Citi.

The company will determine where the need for mortgage modification is greatest, based on economic conditions, and send out letters to its borrowers in these areas to tell them that help is available should they need it.

This new initiative is open only to borrowers who are still current on their loans but are at risk of defaulting - particularly those borrowers who owe more on their mortgages than their homes are currently worth. Additionally, their loans must be owned by the bank, rather than sold off to investors.

Citi already has a program in place to work with borrowers who are delinquent, reducing interest rates to as low as 1% for as long as two years for borrowers who are judged capable of keeping up with lower payments. The bank says that its ongoing mortgage mitigation efforts have produced about 370,000 work outs since the beginning of 2007.

For borrowers who have yet to default, Citi will now aim to reduce their monthly mortgage payment, including property taxes and insurance, to 40% or less of their income. To do that, it will freeze or reduce interest rates, extend the lifetime of the loan or even reduce the loan principal.

Das said the new plan will be implemented immediately and the workouts will be handled in a very fast, streamlined fashion to aid as many homeowners as quickly as possible.

Each of these new foreclosure prevention efforts, from Citi, IndyMac, Bank of America and JPMorgan, represent a significant step forward in resolving the housing crisis, according to Jared Bernstein, senior economist with the Economic Policy Institute. But, he adds, the problem remains overwhelming.

“These programs are helping but the help is marginal - in the hundreds of thousands of homeowners,” he said. “But help is needed by millions.”

Even after taking these new bank programs into account, Mark Zandi, chief economist for Moody’s Economy.com, estimates that 1.6 million Americans will lose their homes this year either in a foreclosure or distressed sale. Some 1.9 million are projected to lose their homes in 2009.

It’s certainly doubtful that the banks’ housing relief programs will be as successful as they hope.

For example, IndyMac’s program was launched in late August, and slated to help as many as 40,000 borrowers. But in late October, FDIC chief Sheila Bair told a congressional committee that the bank had only completed 3,500 work outs.

So Bank of America’s claim that it will help 400,000 homeowners, and JPMorgan Chase’s goal of rescuing another 400,000 borrowers should probably be taken with a grain of salt.

Still, Bernstein welcomes every effort. “Let a thousand flowers bloom,” he said. “It’s like an experiment and, if we’re smart, we’ll see what plans work and what doesn’t.” Then, the best aspects of the various plans could be applied to as many at-risk mortgages as possible.

But the bottom line is that the bank programs won’t be nearly as effective as any massive foreclosure prevention effort that may yet be implemented by the U.S. government, according to Bernstein.

And there is a possibility that such a program may yet emerge. Congress already enacted its Hope for Homeowners initiative, which will allow borrowers to refinance their mortgages into loans backed by the Federal Housing Authority. Now there is talk of a new $50 billion plan that could bail out as many as 3 million homeowners.

“We can keep the number below a million [homes lost] next year with an effective government effort,” said Zandi. “It would be very doable but also very costly.”

The single best thing about the bank programs, according to Bernstein, is that they don’t cost the taxpayers anything.

“You have to be happy about that,” he said.”

Many home owners are still encountering resistance when trying to contact their lender for loan modification options.  You should always try to contact your lender yourself.  Lenders do not charge to modify your loan, however, they are not always the easiest to communicate with either.

Many lenders come off as abrasive to consumers.  This is because, I believe, the emotionally charged state of mind of most families when facing the prospect of losing thier home is not always a good place to negotiate from - and negotiation is exactly what is required with most lenders.

If you would like help contacting your lender, make sure you do your homework!  Do not ever pay upfront fees in exchange for promises of guaranteed results…..I recommend you look into www.helpUmodify.org for more information about modification services.

helpUmodify.org offers progress payments once the hardship and financial package has been received and processed and a work out option looks possible.

The Governor of California steps up and puts the screws on servicers to find modification solutions for distressed home owners.  This story appeared on Yahoo News the other day and I wanted to pass it along.

Schwarzenegger to seek 90-day stays on foreclosures

“SAN FRANCISCO (Reuters) – California Gov. Arnold Schwarzenegger will ask lawmakers to back legislation imposing 90-day stays on home foreclosures as part of an economic stimulus package, state officials said on Wednesday.

President-elect Barack Obama has also proposed a 90-day ban on foreclosures but Schwarzenegger’s plan differs in that it offers a “safe harbor” to mortgage lenders, said David Crane, an adviser to the governor.

Crane said that to avoid having a stay put on individual foreclosures, lenders could prove they have a robust modification program for troubled mortgages, which have left many local housing markets in California with some of the highest foreclosure rates in the nation.

Both state and federally regulated lenders operating in California would be affected by Schwarzenegger’s plan.

“We are keenly interested in just keeping people in their homes,” Crane said on a telephone conference call with reporters.

The 90-day period should give lenders — and borrowers who have defaulted on the mortgage on the home they live in — enough time to work out modifications that lower mortgage costs for owners and save the loan for lenders, added California Department of Corporations Director Preston DuFauchard.

DuFauchard said the goal is for lenders to act aggressively so they exempt themselves from state orders enforcing stays on foreclosure activity.

A second part of Schwarzenegger’s plan, to be unveiled to lawmakers on Thursday when he calls them into a special session, aims to prevent future housing bubbles. The special session will address his economic stimulus plans and the state’s growing budget shortfall.

Schwarzenegger wants lawmakers to allow California’s Department of Real Estate and Department of Corporations to enforce federal laws and regulations such as the Truth in Lending Act to discipline real estate licensees.

He also wants lending practices changed to protect borrowers by expanding fiduciary duties for mortgage brokers so a loan suits a borrower’s circumstances and by penalizing lenders who make false or misleading statements.

Additionally, licensing requirements for loan originators would be increased and standardized, California would contribute to a national database for the public to check disciplinary records of loan originators, and borrowers entering into risky mortgages would be pressed to ensure they understand loan terms.

Schwarzenegger will also urge the U.S. government to use a portion of the $700 billion Troubled Assets Relief Program to buy and modify troubled home loans or to guarantee modified home loans, and call for requiring mortgage originators to retain more of their securitized loans on their books so they share risk from the products with investors”

It’s promising to see the Government putting a little more pressure on the lenders to get them to streamline the modification process.  There is currently too much confusion in the back rooms of loss mitigation departments and the “company line” seems to treat distressed homeowners like a nuisance instead of cherished customers.

When looking for modification help, do your homework.  Do not pay anyone a fee upfront upon the promise that everything will be “ok”.  I hear too many stories every day about homeowners that have been left on their own after paying large fees up front for modification help.

I encourage you to check into www.helpUmodify.org - Do not make it the only service option that you explore but do include it in your research on this subject.

I originally posted this on www.helpUmodify.net on November 4th, 2008.

I ran into this article today on the MarketWatch website and had to pass it along to you.  The California Department of Corporations has released the results of a Mortgage Servicers Survey desiged to get more detailed information about resolved loan workouts and modifications.

Following is a telling excerpt from the story that indicates what was discovered:

The third quarter results show that both the total number of loan workouts initiated and the number of loan workouts closed have increased. Especially important is that the total number of loan modifications — the type of workout most beneficial to consumers — rose significantly to 14,060 in September, the highest monthly count since reporting began. Also important is that modifications as a share of total workouts passed 50% for the first time in September.

As it is encouraging to see that the number of modifications is on the rise, I found several telling signs that there is still much to do in regards to complying with the FHA HOPE for Home Owners, foreclosure prevention program.

From January to June of 2008 there was an average of just over 50,000 workouts initiated a month.  From July to September, that number jumped to just over 77,000.

What I found to be very useful was the breakdown of what options were most prominent as loan modification options.  Here are a few that stood out:

• Short sale as the result of a modification initiation went from 5.69% in January to 13.41% in September
• Workouts, which include freezing or reducing interest rates, extension of terms and reduction in principal balance made up 36% of results in January and rose to over 50% in September .
• Interest rate reductions at or below the initial/start rate made up 20% of those workouts
• Principle reductions (similar to HOPE for Homeowners) made up only .28% in September

This is very valuable information as it shows some interesting trends.  Click here for the complete report from the DOC.  If you have any questions about loan modifications or loan workouts, I highly recommend you visit www.helpUmodify.org to research your options.

Be sure to take advantage of the free loan analyzer option available and if a modification or workout is the best option for you, www.helpUmodify.org operates as a “not for profit” business with a reasonable progressive payment schedule to cover the cost of labor and operations during the negotiation process.  You can get details on the site.

As reported in the Wall Street Journal yesterday, JP Morgan announces that they intend to proactively help modify $70 Billion in mortgages and expect that this will help nearly 400,000 families….Here’s the story

J.P. Morgan Chase & Co. launched an ambitious plan Friday to modify the terms of $70 billion in mortgages for borrowers who are behind on their payments or soon could be.

The move by the New York bank will cover as many as 400,000 borrowers. They’ll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms.

The changes will particularly focus on a type of loan structured in such a way that the borrower’s outstanding balance sometimes grows month after month. J.P. Morgan inherited $54 billion of such loans with its takeover of the beleaguered thrift Washington Mutual Inc. in September.

The plan comes amid intense national focus on a root cause of global financial turmoil: rising home foreclosures, and what the role of banks and government should be in helping struggling homeowners. The banking industry is under much political pressure address the foreclosure problem.

Rival Bank of America Corp. has two loan-modification pools in place, one hashed out with state attorneys general. At the government level, after other programs failed to halt the rise in foreclosures, the Federal Deposit Insurance Corp. recently floated a plan that could help three million troubled borrowers; it is being considered by the White House. The FDIC also is assisting strapped borrowers who had mortgages with IndyMac Bancorp, which the FDIC seized this summer. (Please see related article.)

Such moves would tackle one of the last elements of the global financial upheaval as yet untouched by a major federal program. The mortgage crunch that began in the middle of last year spawned the financial crisis. Big financial players had invested trillions of dollars in securities backed by risky mortgages, which starting in mid-2007 became difficult to value. Banks hobbled by these bad investments reined in lending, spawning the wider credit crunch as a result.

The U.S. government has tackled problems in the banking system and credit markets, but thus far hasn’t succeeding in stanching the bleeding of failing homeowners. Economists and government officials agree that the economy and financial markets can’t fully revive until there’s a halt to the decline in housing prices, a phenomenon that is worsened by foreclosures.

“It doesn’t make sense for us to wait” to tackle the problem, said a J.P. Morgan executive, Charles Scharf. “We’ve heard loud and clear and are listening to what some of the thought leaders around the country are saying.” Mr. Scharf runs the retail division, which includes mortgages and branch banking, at J.P. Morgan, the largest U.S. bank in stock-market value.

The move also suggests that banks are realizing they can improve the value of their loan portfolios through mass modifications rather than foreclosures, which tend to produce larger losses. Until now, mortgage holders have been reluctant to renegotiate loans or have been doing so one-by-one, a time-consuming process. The bundling of loans into securities that are then sold to investors further complicates matters.

The announcement by J.P. Morgan steps up pressure on other mortgage companies to respond with relief programs for stressed borrowers, said Stuart Feldstein, president and co-founder of SMR Research Corp., a Hackettstown N.J., firm that specializes in consumer lending. “The precedent has clearly been set and we can expect to see more of these,” he said.

Nationwide, 7.3 million American homeowners are expected to default on their mortgages between 2008 and 2010, about triple the usual rate, according to Moody’s Economy.com, a research firm. Some 4.3 million of those are expected to lose their homes.

J.P. Morgan’s exposure to the problems increased sharply when it acquired the assets of the Seattle-based Washington Mutual. WaMu, which was seized by regulators, had a large exposure to the difficult housing market of California. In taking it over, J.P. Morgan acquired $16 billion of subprime mortgages.

The mortgages affected by J.P. Morgan’s program represent 4.7% of the home loans it owns or that are serviced by one of the bank’s units, EMC Mortgage Corp. While the program to give these mortgages easier terms is likely to cost J.P. Morgan billions of dollars in interest payments and loan fees, it is also likely to save the bank from the costly and lengthy process of foreclosing homes and selling them. The plan expands upon programs already in place at the bank to help strapped homeowners.

The bank’s Mr. Scharf declined to estimate the plan’s financial impact on the bank. “Our goal in doing this was to come up with something that we think will lead the industry in helping as much as possible on this issue,” he said.

J.P. Morgan’s push is especially aimed at so-called option adjustable-rate mortgages, or options ARMs. These allow borrowers to make a minimum payment that may not even cover the interest due — resulting in a higher loan balance.

Under the plan, option ARMs that are accumulating interest will be replaced with fixed-rate loans that are more stable for borrowers and seen as far less likely to default. J.P. Morgan said it wouldn’t begin the foreclosure process on borrowers during the next 90 days, as it opens loan-counseling centers and takes other steps to launch the program.

J.P. Morgan unveiled the plan days after receiving $25 billion in federal capital from the Treasury’s program to shore up financial institutions and get credit flowing. Mr. Scharf declined to comment on whether the bank would use any of those funds for the mortgage overhaul. “The stronger you are, the more willing you are to spend money and do a whole series of things,” he said, noting that the government cash “certainly makes decisions easier.”

Of the two loan-modification pools at rival Bank of America, one targets 265,000 borrowers with all types of mortgages. The other was hashed out with 14 state attorneys generals and involves 400,000 subprime and option-ARM customers serviced by the big lender Countrywide Financial Corp., which Bank of America purchased July 1.

Another big rival bank, Wachovia Corp., acquired roughly $120 billion of option ARMs as part of its 2006 purchase of Golden West Financial Corp. Wachovia initiated a loan-refinancing program before agreeing to its pending takeover by Wells Fargo & Co. That effort targets the option-ARM portfolio.

J.P. Morgan’s plan drew cautious optimism from Iowa Attorney General Thomas Miller, who recently called on mortgage lenders to launch broad loan-modification programs.

John Taylor, chief executive of the National Community Reinvestment Coalition, called it “a gutsy move on their part,” adding : “They are bending over backward to try to reach out to these people.” The coalition represents 600 community groups and has urged the government and industry to help homeowners.

Republican presidential candidate John McCain has gone further than any program in place, proposing a to have the government buy $300 billion in troubled mortgages outright.

This news story from FOX NEWS explains plans currently in the works as the FDIC is pushing loan servicers to cooperate with home owners and prevent foreclosures.