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With today’s economic crisis we are seeing record highs of foreclosures on the market. If you are in this situation there is probably a million questions running through your head.

Probably the most important, and most frequently asked, is how it will affect your credit. Of course a foreclosure on your credit history will be detrimental.

Natalia Osorio Editor of the “Stop Foreclosure Loans” website — http://www.StopForeclosureLoans.org — pointed out;

“…There really is no disclosed number of points that will be docked from your credit score; however an unofficial number has been rumored to be around 260 points. A good credit score is 700 or higher. An average credit score is around 600. Therefore if you’re current credit score is at 650 you can roughly expect your score to drop to around 390. Even if you have an excellent score of 800 your score will be dropped to around 540 which are still considered to be a negative credit score…”

There are two main reasons that we as a country are currently in this housing crisis. The economic crisis was started by borrowers taking out bad loans, and lenders selling the bad loans to the consumers. Most of these loans included arms which is where the payments were low for the first few years. After the first few years the payments would skyrocket. Lenders would sell these loans to consumers by telling them that they would be able to sell their homes or refinance their homes when their payments increased. Other bad loans included variable interest rates. This again would give a good introductory interest rate, and then the interest rate would increase exponentially after the first few years making payments impossible for the home owners.

This started a domino effect which eventually leads us to record breaking unemployment rates. Because there were millions of these types of loans all at the same time it forced many home owners to go into foreclosure. This affected many industries including banking and real estate. It then got difficult for these consumers to afford or finance anything which then hurt other industries such as automotive and furniture.

“…If you are in this situation there are a few things you can do to stop foreclosure. There are many foreclosure assistance companies that can help you go through your bills, consolidate your debts, and negotiate with your mortgage lender to get your monthly payments down to something you can afford. You can also contact your mortgage company immediately and try to work out a loan modification. You should also research options such as short sales, a deed in lieu, or cash for keys…” N. Osorio added.

Further information about how to get professional assistance with a mortgage loan modification by http://www.StopForeclosureLoans.org

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

Article Source:http://www.articlesbase.com/mortgage-articles/how-does-a-foreclosure-affect-your-credit-1786824.html

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First determine which Assessor’s Office in your area has information on the property.

In my county we have two, one that serves the City of Cedar Rapids and then one for the County of Linn County, Iowa, where our city is. If the property is in town you would use the City Assessor, but if it is in the County, you would have to contact the County Assessor. The information that you get from that office, which we have online, as you may too, will give you a “Book and Page” for the recorded Documents on the property.

Natalia Osorio Editor of the “Loan Modification Foreclosure” website — http://www.LoanModificationForeclosures.com — pointed out;

“…The Assessor’s Office may have information on who is the present owner of the property because they provide that information to your County Treasurer’s Office so the Treasurer’s Office can collect the taxes on the property, sending out the tax statement to the most current owner at their present address…”

Once you have the property owner’s name and possibly also the “Book and Page” of the recorded documents, then you go to your County Recorder’s office and search out the ownership information at the Recorder’s Office. In my county, all of this information is also online so it is relatively easy to retrieve.

At our County Recorder’s Office website, we put in the name of the owner on the search line and it will give you a link to all of the recorded documents on the property in question.

The recorded documents will have the documents you will need to find in order to see who has the note on the property. There should be documentation showing the chain of ownership with regard to the foreclosure first. Those documents should tell you who holds the note on the property. The lender that has started the foreclosure is likely the entity who had the note on the property. You will be able to read what the mortgage says about how much the people paid for the house as well and may clue you in as to how much money the lender needs to sell the house for in order to break even.

“…Keep in mind that once you track down what is owed on the property this may not be a true picture of what the lender needs to sell the property for. Lenders pay $30,000 and upwards to take someone through the foreclosure process for legal fees so don’t be surprised if there is a huge discrepancy between what is owed and what the lender is trying to sell it for through their agent…” N. Osorio added.

Once you locate who has the note, you are welcome to call that lender and ask about the status of the property.

Better yet, hire a Realtor and he or she will track down this information for you.

Further information about how to get professional assistance with a mortgage loan modification by http://www.LoanModificationForeclosures.com

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

Article Source:http://www.articlesbase.com/mortgage-articles/how-do-i-find-who-has-the-note-on-a-home-that-is-in-foreclosure-1783419.html

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The U.S. President has declared that performing loan modification on distressed mortgages is a key part of keeping families in their homes, and ending the rapid decline of property values.  Critics have said that, in 2008, some 53% of all restructured loans were once again in default by the end of that year, but others say that those loan modifications were poorly executed.

The Obama administration aims to help millions of families avoid foreclosure and stay in their homes through an aggressive loan restructuring program.  Here are the top 7 things homeowners should know about this plan.

1.    The focus of Obama’s loan modification plan is centered around monthly payments – not the long term price of the loan.  The focus is more about keeping families in their homes, and less about helping borrowers get good return on investment.
2.    The end goal of each loan modification is to get the monthly payment on each delinquent mortgage down to 31% of the borrower’s monthly income.  To that end, the government will pitch in up to 7% of family income, and the lender will take steps such as reducing interest rates and extending the loan’s term to 40 years.  
3.    The government will provide cash incentives to both the lender and the borrower, to encourage use of the loan modification program.  Lenders will receive $1,000 per loan modification, plus another $1,000 per loan per year for up to three years.  Borrowers also get a $1,000 discount off the loan’s principal each year for up to five years.  Both of these incentives require the new loan terms to be active for three months, and to be kept current.
4.    This loan modification plan is only for delinquent mortgages for owner-occupied homes which are the primary residence of the owner.  The loan must have an outstanding principal balance. Both occupancy, and financial hardship, must be verified.  Analysts have commented that such measures would have prevented the current crisis if enacted sooner.
5.    Each lender and loan servicer will test each loan using a formula to determine if a loan should be modified.  The formula compares the present rate of repayment, vs. the expected rate of repayment after restructuring.  If the borrower is able to make payments more faithfully on a delinquent mortgage under a modified loan, then this is worth more to the lender, and the loan should be modified.  In tandem with the cash incentives, this will help increase participation.
6.    The Obama administration intends to offer incentives to prevent or remove second liens, but further details on this have not yet been announced.
7.    Real estate speculators need not apply.  The entire focus of this initiative is to keep families in their homes – not to aid small real estate investors.  This is great news for the affected families struggling under a delinquent mortgage, but only time will tell how the real estate market as a whole will benefit from this program.

This loan modification program for delinquent mortgages is now “live” and in effect.  You may have trouble getting the process started with your lending institution, if you live in an area that was hit hard by the recent real estate crash.  Some experts are concerned that lenders don’t have the the capacity to process all the borrowers who will inquire about loan modification.

Krebs Financial of Miami, Florida is a full-service mortgage, credit repair and loss mitigation company with expertise in short sales, loan modifications, reinstatements and more.
www.krebsfinancial.com

Article Source:http://www.articlesbase.com/mortgage-articles/7-things-to-know-about-loan-modifications-1767496.html

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While many people may not be aware of it, loan modification foreclosure is one growing problem in the country. Thanks to the current economic crisis, many homes are on the brink of foreclosure and many people are on the verge of filing for bankruptcy. But what they fail to realize is that loan modification just might be their ticket out of these situations.

Normally, people will think that this mortgage modification program is another scheme which banks conjure up so that they can get more money from their customers who are already struggling. But in reality, this mortgage modification program is one way which can help both the client and the bank. It is in fact, a Win-Win situation.

While the person facing a foreclosure can be able to save his home, the bank also saves money for going through with a foreclosure. This is because they no longer have to hire another person to collect money from you or to spend money fixing the house and putting it up for sale. In addition, the banks are giving you another opportunity where you can pay your existing mortgage in a more reasonable and practical manner, thus it is eliminating a complete loss on the part of your lender.

Because of this, more and more tactics are being used to prevent foreclosure since it is a more viable solution for both parties. But what does modifying one’s current loan really do? When your mortgage is going to be modified, it means that your lender will bring down your interest rate, your principal balance or even your monthly mortgage payments into a more reasonable amount. By doing so, foreclosure is a last option for families who have encountered the unavoidable financial dilemma that has been brought about by the breakdown of the US economy.

In a way, the loan modification program is a change being brought about to your current and existing mortgage so that you have a better chance of paying it off rather than ending up with a foreclosed property or filing for bankruptcy. There are many ways which this loan modification program can be made into effect. They can be used to refinance your existing loan, allow you to skip out on some payments, reduce your loan’s total amount, reduce the charged interest rate or even to extend the loan’s term period.

If you want to save your home, you can get in touch with your lender and ask about the loan modification foreclosure program which you can avail. This way, you can spare yourself the hassle and turn it into a Win-Win situation for you and your lender.

For detailed facts and essential tips about how you can be approved for a home loan modification, visit this simple, easy to understand loan modification guide and resource: http://HomeLoanModifications101.com

Article Source:http://www.articlesbase.com/mortgage-articles/loan-modification-foreclosure-is-a-winwin-situation-1681927.html

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Loan modification: Role of a hardship letter

Loan modification is something a lot of you may be looking forward to. But the fact is that not all individuals can get modification for a loan. The creditors need to be really convinced that you are having trouble paying up the debt and only then maybe they would agree to some kind of loan modification.

Scenario: “I own a house and a mortgage on it. I have paid my monthly payments on time and have not yet defaulted on payments. But my problem here is that the price of the house is going down and I also am finding it difficult to keep up with the payment because of the high interest my lender is charging. I would like to apply for a loan modification. I need help with what I need to do if I want to get loan modification?

– John”

Solution: Whether or not a mortgage loan modification will be possible entirely depends on your lender and the way in which you can place your situation in front of him. So, when you approach your lender for modification, you must have it well planned as to what you are going to say to him in order to convince him. Remember that your lender will try to get as much money out of you as possible. Anything that you say may be used against you. So, you have to be very careful about what you say.

Items you would need to keep handy when seeking loan modification:

• A hardship letter mentioning why you would like to go for a loan modification.
• Documents for income and expenditure.
• All correspondence that you have with the lender.
• Your last pay stubs. They would like to see if you are really in a hardship and can’t pay.
• Bank statements for 3 – 6 months.
• All mortgage paper work.

What is a hardship letter?

A hardship letter is formal information given to the lender to explain why you are no longer able to make the payments on your home loan and your current financial condition. This letter is widely used in order to avoid foreclosure and work out a solution to paying some portion of your mortgage instead of not paying at all.

Your hardship letter must include:

• Your (homeowner) name, address and account number
• Specific dates of hardship (if any in particular)
• The kind of hardship you are gong through and the reason for the hardship
• Information regarding your income, expenditure and also mention if there will be any expected positive change in your condition.
• Information of any lump sum amount that you may have at present to compensate for any default.
• The time and the ways in which you will be available for the lender.

While writing your hardship letter you must also attach copies of your income proof, documents related to expenditure and other financial statements that highlight your assets, liabilities as well as tax returns, current pay etc. You may refer a sample hardship letter available on the internet when you are writing one.

Once you have all the information ready you may contact your lender and try to negotiate the loan. You may either do it yourself or get a loan modification company to do it for you. But it is suggested that before you can invest the money on the modification company, you must give it a try yourself.

Author: She is the Community Mentor of MortgageFit and has been contributing her suggestions to the Community since 2005. Not just that, she has also made notable contributions through the various articles written on different subjects related to the mortgage industry. Few of her popular articles would include names like ‘Mortgage that you can afford’, ‘Mobile Home Loan with Bad Credit’, and How much mortgage can I borrow?’

Article Source:http://www.articlesbase.com/mortgage-articles/loan-modification-role-of-a-hardship-letter-1674201.html

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