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.

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.

Oct. 28, 2008

Dear C.A.R. Member:

Much has happened since passage of the Emergency Economic Stabilization Act earlier this month.

NAR has urged U.S. Treasury Secretary Paulson to take advantage of the extensive experience of local commercial and residential real estate professionals in the management and disposition of real property as the U.S. Treasury Dept. implements the Troubled Asset Relief Program (TARP) as part of the Emergency Economic Stabilization Act.

Congress has held a number of hearings over the past few weeks looking into multiple factors that contributed to the current financial situation. Last week, Congress heard testimony from Securities and Exchange Commission Chairman Christopher Cox, Federal Reserve Board Chairman Ben Bernanke, former Federal Reserve Board Chairman Alan Greenspan, former U.S. Treasury Secretary John Snow, and other leading players. The hearings are laying the groundwork to inform legislation expected to address regulatory reform of the finance and lending industries as well as safeguards to prevent a recurrence of the current financial crisis. It is our expectation that the legislation will be introduced early next year.

Additional hearings are covering the implementation of a second stimulus package. As the U.S. economy continues to struggle, politicians on both sides of the aisle are feeling pressure from their constituents, creating a strong incentive for Congress to pass meaningful legislation as the national elections near and the country heads into the holiday season. The Senate, House of Representatives and the White House have stated their willingness to work through a lame-duck session to pass a second economic stimulus package prior to the end of the year.

While many ideas have been circulated, few, if any, appear certain to be included in a second stimulus package, according to C.A.R. policy analysts. Some of the ideas under discussion include: An additional round of stimulus checks; extending the temporary loan limit of $729,750 for the Government Sponsored Enterprises (GSE) and Federal Housing Administration (FHA); infrastructure spending; financial aid for states; a temporary increase in block grants; and an extension of unemployment and welfare benefits.

One important factor determining what, if anything, will be done during a lame-duck session is the outcome of the upcoming presidential election. Should the Democrats take the White House and secure a filibuster-proof majority in the Senate, they may choose to wait till after Jan. 20 before proposing or enacting legislation. Should the Republican nominee take the White House, Democrats may feel the Bush administration will be more willing to compromise in order to pass last-minute initiatives prior to leaving office. C.A.R. and NAR will continue to strongly advocate for making permanent the $729,750 loan limit as part of any legislation that is forthcoming.

The Hope For Homeowners (H4H) initiative that was part of the July stimulus package began to be implemented Oct. 1.The H4H program allows troubled homeowners to keep their home, while enabling lenders to receive a Federal Housing Administration (FHA) guarantee on the loans.  Under terms of the voluntary program, lenders agree to refinance the existing mortgage at 90 percent of the current appraised value and assume the loss on the remaining balance; the new loan is an FHA guaranteed 30 year, fixed-rate, fully amortized, fully documented loan; and the homeowner must forego a portion of the home’s future appreciation to the FHA when it is sold.

The FHA has posted a list of lenders participating in the HOPE for Homeowners program. When contacting the lenders, the FHA is strongly encouraging consumers to also contact their servicing lender and any subordinate lien holders as their participation is vital in order to refinance into a H4H mortgage. The program is voluntary and servicing lenders may offer different solutions for avoiding foreclosure. The FHA plans to update the list weekly on Fridays. The list is available at http://portal.hud.gov/portal/page?_pageid=73,7605762&_dad=portal&_schema=PORTAL.

We now have the qualifying guidelines for the HOPENOW - The FHA HOPE for Homeowners Refinance program that includes your existing lender forgiving the outstanding balance of your current loan down to 90% of it’s current market value.

HOPE NOW - A Complete Guide to Reducing your loan balance with the FHA HOPE for Homeowners refinance program

We are conducting two comprehensive web classes that will give you all of the information you need to know about this program.  You can Register today by clicking on one of the links below:

Wed, Oct. 16th - 6:00pm to 7:00pm EST (East Coast) - REGISTER HERE

Wed, Oct. 16th - 6:00pm to 7:00pm PST (West Coast) - REGISTER HERE

Important “Need to Know” guide to HOPENOW

• Your current lender may forgive all penalties, fees and forgive the balance of your loan to 90% of it’s current value
• You can NOT intentionally miss payments on your Mortgage or other liabilities
• Home must be your Primary Residence and you can not own any other homes
• The Government is entitled to between 100% and 50% of all future equity in your home
• You MUST document all of your income with tax returns, W2’s or current pay stubs - No stated income
• Debt to Income limits are much more strict than conventional refinance loans
• If you are in a temporary “forbearance” program it may be easier to qualify with higher debt to income 

If you have questions about this program or would like to find out if you qualify NOW, you may visit us at www.helpUmodify.org or call 1-888-512-4372

It seems that there is so much talk about bailing out the lenders that growing numbers of foreclosures on thier books from unethical and sometimes criminal lending practices.

The big question I have had through all of this is how are we going to help those homeowners that are stuggling to keep their homes now?

Beginning October 1st, 2008 FHA’s HOPE for Homeowners program is in effect.  The biggest question about this program is whether or not the lenders would “volunteer” to write down, or forgive the principle balance of existing loans in order for folks to have the ability to afford their payments based on “current market value”.

My question was always this - Where’s the incentive for lenders to volunteer to participate?

The answer to this question can be found throughout the 106 page “Emergency Economic Stabilization Act of 2008″ draft that was defeated yesterday.

Here’s what it says:

Section 2 - PURPOSES, Paragraph 2, line B - Preserves homeownership and promotes jobs and economic growth

I don’t hear this in the news as much as I would like to - Preserving homeownership is more important than bailing out big banks!

Section 109 - FORECLOSURE MITIGATION EFFORTS, Paragraph (a) - Residential Mortgage Loan Servicing Standards. - to the extent that the Secretary axquires mortgages, mortgage backed securities, and other assets secured by residential real estate, including multifamily housing, the Sectretary shall implement a plan that seeks to maximize assistance for homeowners and use the authority of the Secretary to encourage the servicers of the underlying mortgages, considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.  In addition, the Secretary may use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable forclosures.

Now this is more like it.  The Secretary will encourage the servicers to take advantage of the HOPE for Homeowners Program.  That’s a topic for a whole other series of posts, but I believe that principle reduction is going to be the most important part of preserving home ownership moving forward.

Section 109. FORECLOSURE MITIGATION EFFORTS, Paragraph (c) - Consent to Reasonable Loan Modification Request. - Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.

Again, the Secretary (of the Treasury) is pushing servicers to consider all reasonable loan modification requests.  This is another very positive inclusion that should help a lot of families that are struggling right now.

If you are one of the millions of families that are struggling to keep up with your home payments, you may be interested in taking a look at www.helpumodify.org

This is one of the only “no upfront fee” loan modification services out there.  The total fees, if they are able to successfully negotiate a ‘work out’ for you is under $1,000.  This is a far cry from the many scams out there that ask for thousands of dollars up front with no guarantees!

For more information about loan modification options, visit www.helpumodify.org or call 1-888-271-9767

> Loan Modification Help, CLICK HERE <

The fear of unaffordable mortgage payments is a very common reality for many, many homeowners.  Knowing which way to turn can be as confusing as the loan documents that put you in this situation in the first place.  One option that has received a lot of attention is the FHA Housing recovery bill of 2008.

Title IV of HR 3221is where you will find the information you have been looking for if you want to consider this program as an option to refinance your home.  This program claims to serve approximately 400,000 home owners.

What hasn’t been getting a lot of press is what the requirements are for qualifying for this program.  Following is an excerpt from this Legislative Notice issued June 18th, 2008 by the Senate Republican Policy Committee.

HOPE for Homeowners Program - The bill establishes a new program entitled the HOPE for Homeowners Program. The program will be overseen by a Board made up of the Secretary of HUD, the Secretary of the Treasury, the Chairman of the Federal Reserve Board, and the
Chairman of the Federal Deposit Insurance Corporation (FDIC). The Board will have the authority to develop standards within the framework of the legislation.

Eligible Borrowers - Only owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must
certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt to income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers’ income with the IRS.

New Loan Amount - The FHA refinancing program will let borrowers who have defaulted on their existing mortgages to refinance into FHA-guaranteed loans. Lenders must write down the principal balance of the loan to no more than 90 percent of the current value (and in some
circumstances less), and put the borrower in a 30-year fixed rate mortgage. Loans up to $550,000 are eligible. FHA is not allowed to charge insurance premiums sufficient to cover the risk of these borrowers, so it will result in a cost to the government, which will be paid for at first by funds from the Housing Trust Fund.

Equity & Appreciation Sharing -In order to avoid a windfall to the borrower created by the new 90 percent loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the
borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s
access to the newly created equity will be phased-in over 5 years.

Existing Subordinate Liens - Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.

Qualified Safe Harbor - The legislation provides loan servicers with an incentive to participate in the program by offering a safe harbor against legal liability.

Program Size - The program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners.

Program Sunset - The program will begin October 1, 2008 and sunset on September 30, 2011.

The biggest challenges many folks will find with this program are the strict guidelines for qualifying.   It is important that you completely understand this program when assessing your options.

In the borrower qualification guidelines issued by the Department of Housing and Urban Development on July 24, 2008 you will find even more restrictions….Here are some of the highlights:

• Borrower must certify that they have not intentionally defaulted on the eligible morgage or on any other debt (false statement = fine and/or 5 years in prison)
• Current lender must voluntarily forgive balance of existing loan to 90% of current market value.
• No pre-payment penalties can exist
• No subordinate financing (2nd mortgages) can exist.  Subordinate lien holders must forgive liability.
• Requires borrowers to share equity and any future appreciation in the value of the property with the Federal Government.

Since this program does not begin until October 1st, 2008 there are still some detail about how it will work that have not been released.  It does seem that this program is a viable option for those that do not plan to ever move or refinance (due to having to pay the Federal Government 50% of all future equity) and can qualify for an FHA loan using full income tax returns, pay stubs and asset documentation.

Loan modification is another option for folks that are looking for temporary to permanent payment relief and even buy some time to figure out what is best for you and your family.  This can also be a confusing process due to an increase in loan modification Scams that are beginning to rear their ugly heads in these difficult times.

It seems that as quickly as sub-prime lenders where going out of business, new loan modification companies are opening up to prey on the folks that they took advantage of the first time!

For an honest assessment of your options please do some research on this site - HelpUmodify.org or call us today at 1-866-667-6724 and ask for Nancy, Diane or John.