Why Mortgage Companies Fail at Approving Loan Modifications For Foreclosure Victims
By [http://ezinearticles.com/?expert=Nick_Adama]Nick Adama
Homeowners who fall behind in their mortgage but recover from a hardship and are able to get back on track often attempt to work with their lender to qualify for a plan to make up the missed payments. But often, they are disappointed in how poorly the mortgage company responds to their requests for help, even when the borrowers have cash on hand to pay down the arrears.
But the bank never returns phone calls, no matter how many voice messages are left, yet collections calls may continue unabated. It would almost seem illegal for lenders to act this incompetent, but they do it every day and pass up legitimate chances to allow financially stable borrowers to get back on track and stop foreclosure before the house is auctioned off or an eviction date is set.
But of course, failing to work with homeowners who are behind on their mortgage is not illegal. A family was paying, then it stopped paying. The mortgage contract says that if the borrowers stop paying the loan on time every month, the bank can take the house into foreclosure and attempt to have it sold at a public auction to satisfy the debt. There is nothing illegal about enforcing a contract that both parties entered into voluntarily and with all the terms in writing.
So foreclosure and refusing to work with a homeowner is not illegal, per se. Regardless, though, it is almost always a bad idea on the part of the bank not to try and work with the borrowers, especially if they can get caught up again in a reasonable period of time. Banks lose money on foreclosures, and if a homeowner has actually recovered from a financial hardship, then there is no reason why the lender should not at least make an attempt to resolve the situation.
But with so many foreclosures going on right now, if the loan is with a big bank or servicing company, self-represented borrowers are often pushed onto the back burner while those represented by foreclosure help companies, government agencies, or attorneys can get through to the lenders more easily. In fact, it might be worth asking for some help from a reputable assistance provider in this situation and requesting a mortgage modification or other workout plan through the help of a professional.
Unless a borrower is able to sit on hold for multiple hours throughout the workday in order to make sure the bank gets faxes and for status updates, the mortgage modification may find itself on the bottom of the pile, while others are worked on more that are receiving calls every day from the interested parties. It can take days just for a lender to acknowledge that it has received a fax giving a third party authorization to speak with the lender about the loan, and even longer for it to acknowledge receiving a completed loan workout package and reviewing it.
Unfortunately for homeowners, banks are completely incompetent at helping people solve foreclosure in a timely manner unless they are forced to do by legal threats or given a deal that it would be certifiably insane to turn down. Servicing companies and financial firms that have securitized mortgages into bonds can actually make more money by letting a house go into foreclosure, so they have no incentive to make a loan work and decrease their own profits.
The ForeclosureFish website has been created to provide homeowners in danger of losing their houses with important foreclosure information and resources. The site describes various methods that may be used to save a home, such as stopping a sheriff sale, defending a foreclosure in court, refinancing, selling, and more. Visit the site if you are planning on stopping foreclosure on your home before the bank takes the property to a county auction, as well as how you can recover your credit record after: http://www.foreclosurefish.com/Article Source: http://EzineArticles.com/?expert=Nick_Adama http://EzineArticles.com/?Why-Mortgage-Companies-Fail-at-Approving-Loan-Modifications-For-Foreclosure-Victims&id=1769351
Friday 12 December 2008
Getting Qualified in Today's Mortgage Market
Getting Qualified in Today's Mortgage Market
By [http://ezinearticles.com/?expert=Lee_Keadle]Lee Keadle
Home mortgages have gotten a lot of attention in the news during the past few weeks. As home buyers keep hearing about how lenders are tightening the loans they give out, many people are wondering if they'll now be able to get the home they could have easily bought months ago. I've included in this article one of the most common questions we've gotten from home buyers in the past few weeks: is it harder to qualify now than it was 3 months ago before the mortgage crunch?
The short answer to this question is that it's gotten more difficult for lenders to qualify borrowers who have limited down payments. A borrower now needs a clean credit and a few months' of reserves in the bank in order to get qualified. Borrowers also now have to make a minimum of a 3% down payment unless they are VA eligible.
In terms of qualifying, lenders are having to go back to old school methods of qualifying. All lenders (regardless of the company) will require a 2 year history of income, which is a larger time frame than what we were seeing even six months ago. And, lenders are having to be conservative in how they calculate a borrower's income.
For example, some borrowers who work overtime count that overpay as their regular income. Even if a borrower can show that he has a history of regular overtime pay (say 6 months or so), the lender may not be able to technically count that overtime income anymore in the regular income. So across the board, you'll find stricter guidelines for borrowers.
However, it's important to note that even with these stricter guidelines, the changes should not affect most buyers. These guidelines are really only affecting borrowers with a damaged credit history. It's gotten a lot harder for them to qualify in the past few months.
But, if you've a done good job of maintaining credit and have saved up some money, you should not have any more trouble qualifying now compared to several months ago. So, it completely depends on your current financial situation.
If you're considering buying a home in the next few months, it's a good idea to talk with a home loan consultant. Don't think that several months out is too early to meet with a consultant. One of the biggest problems we see with buyers is that look at homes (either in person or on the internet) and don't really know how much they can afford. There's no point in getting your hopes up for a home or a price range of homes that you love but can't afford. So, before you start visiting homes, it's a good idea to talk with a lender about down payments and monthly mortgage payments so you can have a definite price range in mind.
Let Lee Keadle be your Charleston real estate guide! He specializes in Mount Pleasant SC real estate but works in all 18 Charleston areas!
Article Source: http://EzineArticles.com/?expert=Lee_Keadle http://EzineArticles.com/?Getting-Qualified-in-Todays-Mortgage-Market&id=1772297
By [http://ezinearticles.com/?expert=Lee_Keadle]Lee Keadle
Home mortgages have gotten a lot of attention in the news during the past few weeks. As home buyers keep hearing about how lenders are tightening the loans they give out, many people are wondering if they'll now be able to get the home they could have easily bought months ago. I've included in this article one of the most common questions we've gotten from home buyers in the past few weeks: is it harder to qualify now than it was 3 months ago before the mortgage crunch?
The short answer to this question is that it's gotten more difficult for lenders to qualify borrowers who have limited down payments. A borrower now needs a clean credit and a few months' of reserves in the bank in order to get qualified. Borrowers also now have to make a minimum of a 3% down payment unless they are VA eligible.
In terms of qualifying, lenders are having to go back to old school methods of qualifying. All lenders (regardless of the company) will require a 2 year history of income, which is a larger time frame than what we were seeing even six months ago. And, lenders are having to be conservative in how they calculate a borrower's income.
For example, some borrowers who work overtime count that overpay as their regular income. Even if a borrower can show that he has a history of regular overtime pay (say 6 months or so), the lender may not be able to technically count that overtime income anymore in the regular income. So across the board, you'll find stricter guidelines for borrowers.
However, it's important to note that even with these stricter guidelines, the changes should not affect most buyers. These guidelines are really only affecting borrowers with a damaged credit history. It's gotten a lot harder for them to qualify in the past few months.
But, if you've a done good job of maintaining credit and have saved up some money, you should not have any more trouble qualifying now compared to several months ago. So, it completely depends on your current financial situation.
If you're considering buying a home in the next few months, it's a good idea to talk with a home loan consultant. Don't think that several months out is too early to meet with a consultant. One of the biggest problems we see with buyers is that look at homes (either in person or on the internet) and don't really know how much they can afford. There's no point in getting your hopes up for a home or a price range of homes that you love but can't afford. So, before you start visiting homes, it's a good idea to talk with a lender about down payments and monthly mortgage payments so you can have a definite price range in mind.
Let Lee Keadle be your Charleston real estate guide! He specializes in Mount Pleasant SC real estate but works in all 18 Charleston areas!
Article Source: http://EzineArticles.com/?expert=Lee_Keadle http://EzineArticles.com/?Getting-Qualified-in-Todays-Mortgage-Market&id=1772297
Tuesday 9 December 2008
Mortgage Protection Insurance
The majority of homeowners never stop to consider what would happen if they suddenly didn’t have the ability to make their mortgage payment. Yet everyday people find themselves facing sudden illnesses, a death in the family or a natural disaster that prevents them from having the necessary funds to pay their mortgage. With mortgage protection insurance all homeowners can have the extra protection they need.
Many of those who buy a house and finance a mortgage are young and very healthy. They really don’t foresee anything happening that could interfere with their ability to hold a job and make money. However, illness and accidents to happen and unless you have mortgage protection insurance in place, you are likely still responsible for making your full mortgage payment even if physically that’s not possible.
A common problem that people find themselves facing is being hurt in a car accident. Auto accidents can be very serious and depending on the job you do, you might not be able to go to work for several weeks or months. Although you are likely to realize a monetary settlement from the accident if you weren’t at fault that can take years. In the meantime you have a mortgage to pay and no job to do that. If you have mortgage protection insurance that includes accident coverage, your mortgage payments will be made until you can return to work.
Illness is much the same. Cancer, heart disease and strokes strike people of all ages, all the time. Serious illnesses typically prevent a person from working in any capacity. Without a regular salary coming in, they can face the reality of losing their home to foreclosure. With mortgage protection insurance, they can apply for coverage once they can no longer work. Typically a doctor is assigned to the case and his or her findings will help determine how long coverage will be extended for. For a family already facing the hardship of a life-threatening illness, having to worry about losing their home shouldn’t be a concern at all.
Most companies that offer funding for homes will have these types of policies available. The representative that you work with during the loan process will usually initially ask you about whether you are interested in mortgage protection insurance. Many homeowners turn it down because they are concerned with saving the few dollars a month it would cost. It’s certainly a personal decision but it’s incredibly important to weigh the benefits of having mortgage protection insurance against what could possibly occur if you didn’t. Think about the long term effects of a serious illness or accident and just what your family may risk losing if you don’t have the mortgage protection insurance in place.
Many of those who buy a house and finance a mortgage are young and very healthy. They really don’t foresee anything happening that could interfere with their ability to hold a job and make money. However, illness and accidents to happen and unless you have mortgage protection insurance in place, you are likely still responsible for making your full mortgage payment even if physically that’s not possible.
A common problem that people find themselves facing is being hurt in a car accident. Auto accidents can be very serious and depending on the job you do, you might not be able to go to work for several weeks or months. Although you are likely to realize a monetary settlement from the accident if you weren’t at fault that can take years. In the meantime you have a mortgage to pay and no job to do that. If you have mortgage protection insurance that includes accident coverage, your mortgage payments will be made until you can return to work.
Illness is much the same. Cancer, heart disease and strokes strike people of all ages, all the time. Serious illnesses typically prevent a person from working in any capacity. Without a regular salary coming in, they can face the reality of losing their home to foreclosure. With mortgage protection insurance, they can apply for coverage once they can no longer work. Typically a doctor is assigned to the case and his or her findings will help determine how long coverage will be extended for. For a family already facing the hardship of a life-threatening illness, having to worry about losing their home shouldn’t be a concern at all.
Most companies that offer funding for homes will have these types of policies available. The representative that you work with during the loan process will usually initially ask you about whether you are interested in mortgage protection insurance. Many homeowners turn it down because they are concerned with saving the few dollars a month it would cost. It’s certainly a personal decision but it’s incredibly important to weigh the benefits of having mortgage protection insurance against what could possibly occur if you didn’t. Think about the long term effects of a serious illness or accident and just what your family may risk losing if you don’t have the mortgage protection insurance in place.
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