Reality of Loan Modification

There is a big “buzz” in our economy that the banks are now touting as the “newest and best” way to solve the foreclosure dilemma. I am speaking of loan modification. Basically, you should be very alert and fully understand what is happening. In a loan modification, the bank simply takes your existing mortgage and re-writes it into a forty year loan. If, you have an existing thirty year loan, you agree to pay off your loan in forty years.

Sounds good. In fact in some regions of the country that is smart. But, let’s look at this horse from a couple of angles. First of all, ask the bank. Are you lowering the amount of money that we owe you? I will just bet that “if” you owed them $300,000 before the modification, you will still owe them $300,000 AFTER the modification. The only thing that changes is your payments are reduced. This possibly enables you to stay in your home.

Now, let’s put on the real hat. Let’s just say that when you bought your home, you paid $300,000 for it and you have that amount still owed. Now, before you even consider paying some company or slick operator a couple of grand to help you through this process, start asking some questions, such as:

What is the house worth today? Would I pay $300,000 for a house that is only worth $150,000? How about your neighbor that simply quit paying, is putting that money in his pocket and will be buying (possibly) a home just like yours for $150,000 because that is the value of the home. Getting interesting?

This frenzy to keep the homeowners in their homes is NOT the best deal. Sure, pride of ownership, etc still enters into the equation. Ask your bank; “Will you delete the late paying history off of my credit report, IF we enter into this loan modification”? What good does it do you to enter into this deal IF your credit sucks? You get stuck with paying (32%) interest rates on credit cards and before you know it, you are back in the same old rut again.

I am not saying” loan modification” is not the way to go. I am saying that today’s consumer does NOT have enough information about loan modification and thinks that this “slick talking” loan modification expert is going to save them.

Here are my suggestions:  1.) Make sure that you are happy with what is going to be reported on your credit report. 2.) Ask the lender, IF, the principal amount of the loan can reflect the value of the house on the day that you agree to a loan modification. (I doubt it, because they are still the greedy institutions that we know). 3.) Ask the loan modification expert to give you the forty year spread sheet so that you know how much you really are paying for this program. 4.) Ask the “guru” to give you a copy of the BPO which the real estate broker provides to determine the present day value of the house.

There is no way in these deals that the lender is giving you anything at all. Even, IF, they lower the interest rate, over a period of forty years it is still more profitable for them, then if the loan stayed in its present thirty year profile.

In closing, be very alert. Ask questions. Don’t sign “nuttin” until you fully, understand. Just remember your neighbor across the street that went into a foreclosure defense program. He is living in his home for almost a year now and has saved that money. Now, IF, the lender does find the note (I doubt it) he can take that money and put it down on a similar house for a lot less money.

Would you rather be in debt for $150,000 or $300,000 on the same home?

Regis Sauger
http://www.articlesbase.com/mortgage-articles/the-reality-of-loan-modifications-724825.html

http://realestatemarketingthisweek.com – Real Estate Marketing – Forget the doom and gloom, First Time Home Buyers can buy with FHA – With Michael J Barnes, Brett Fallon and Dan Havey of Real Estate Marketing This Week

Part 1 – Thanks to my very great friend Brett Fallon for taking the time to be here in studio today. Brett is one of America’s finest financial advisors. And of course the infamous Dan Havey. Now we all love Dan Havey because he was instrumental in getting me into the mortgage industry about 14 years ago. Most importantly, Dan was instrumental in helping us put together the loan modification hotline and he is the author of Real Estates Future.

So today we have a few things we want discussed in regard to the economy, what’s happened, were wrapping up the year. You may have heard about this in the media, of course the media’s job is to scare you. Well our job is to tell you the truth. So Brett you have some data and some information that you wanted to share

Some of the things you hear in the media, you cant escape, its pretty much doom and gloom, sky is falling, this is the next Great Depression. It’s over for all of us and we should all just pack up and go. That kind of stuff is pervasive out there and creates fear and a lot of anxiety amongst people who are either investors, people who are looking to buy a house, looking to refinance a mortgage.

People dont realize there are certain tools that exist that we will talk about during the course of the show today. They should understand that some of the things that we discussed prior to today’s broadcasts were interest rates. Interest rates are at historic lows. Money is cheaper right now than it has ever been. We know the Fed recently reduced the Fed Funds Rate and that is the rate that banks are lending money to one another at.

Right now that rate is zero. Historically, that’s never happened in the United States before. The Fed’s idea is to help to unfreeze this credit market and we keep hearing all this talk about how credit markets are still frozen, that the global recession is deepening, there is evidence to the contrary of that. Some of the moves that the FED is making are working. We’re starting to see, and you and I were talking recently about some clients that were helping in terms of refinancing existing mortgages. Well, if the credit markets are frozen how come we got those loans complete?

Well, that’s a good point, and you got a call I think it was last Monday or maybe the Monday before, someone called you and asked if there was any money to refinance. What can I do? Well the reality of it is there is plenty of money out there for refinances, in some cases there’s issues with property values. That’s why there are different options for those types of people

Well from a buyer’s perspective, todays property valuation is a good thing, if I’m a buyer. Thats a good point too. People are interested in buying and the huge opportunity today. This is an unprecedented opportunity in my opinion, both in terms of the dollar and the real estate market. And for those who understand those dynamics and are willing to entertain the deal, they will be handsomely rewarded. There is no doubt about it.

And as we spoke on the last show, home prices in November for Maricopa County show that the median home price is down as low as $160,000 already. And it reminds me a lot about when I got into the industry, way back in 1989 and the type of financing we had then was FHA and Fannie Mae. And were back to that again now. We’ve got sanity back into the market and home prices have come down. But right now, it’s a perfect time, especially for first-time homebuyers or a move up buyer who can buy under the Fannie Mae limit of $417,000. If you can get into that range, and as we spoke before that 78% of the homes in Maricopa County that sold last month sold for under $250,000. I think that right now is the time just to get out there and find a house to move your family and children into with an FHA loan.

Michael, you don’t have to have exactly perfect credit do you? You can have a couple of dings if need be, right? You’re exactly right, each case has its own merits, every FHA loan is underwritten individually. There are many cases where collections are okay, there needs to be a explanation. You dont have to have the 720 plus credit scores like you do for Fannie Mae and Freddie Mac to get the best rates… http://realestatemarketingthisweek.com/forget-the-doom-and-gloom-first-time-home-buyers-can-buy-with-fha/

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Mortgage Refinance Information Prior to scouting out mortgage refinance loans, any potential borrowers should first review their current mortgage note. The first thing that you need to look for is a prepayment clause. Most home loans include some form of prepayment penalties for paying your home loans off early. Homeowners that have a first and second mortgage could also end up being slapped with steep prepayment penalties; which would go a long way towards negating the savings that would be obtained through refinancing. Many mortgage refinance financial lenders tend to prey upon the idea of utilizing the equity that has been built up in your home in order to pay off your credit cards. Others will actually just combine this with some sort of a cash-out pitch. While this at first may seem tempting, it is not actually the best idea. Even though the home refinance loan rates may end up being lower, and you very well may end up with some extra money each month, over the long run you are going to be paying more in terms of interest charges because you are paying the refinance home back over such a long period of time (most people get a mortgage refinance with a 30 year term). Besides that, even after you are able to free up that additional money each month using a mortgage refinance, it does not really provide you with much good unless you are going to put it into some sort of savings account. Otherwise you are still going to be just living from paycheck to paycheck. Also, if you end up getting another outstanding credit card balance, you will find yourself utilizing your house as collateral against the home refinance, and that rarely ends in a good way. A home mortgage refinance can actually turn out to be a good idea, though. The key for this is to use some smarts when you go about the mortgage refinance process so that you are in fact doing it to actually save some money. This way you will be able to keep more of your own hard earned finances, and less of it ends up going towards the interest. The main rule of thumb when getting a home refinance loan is to do it only when the going rate is at least half a point lower than the interest rate you currently have. This way the fees and costs that end up being associated with the paperwork and redoing the home refinance loan is worth the cost. Also, make absolutely certain that you are getting yourself a fixed rate. If your current loan happens to have a fixed rate and is even more than whole point higher than a new variable rate for example, it can mean really bad news when the interest rates end up going up.Should I Refinance my Mortgage? Instead of just getting a home refinance on a 30 year loan, you should be trying to get yourself a 15 year mortgage instead. This is a simply amazing way for you to save some thousands of dollars in interest. The monthly payments on your mortgage refinance may increase by $50-$150, but in the long run you are going to be saving a ton of money. That is quite a bit of money that you can utilize in retirement as another example, instead of allowing it to go to the bank for some extra years. Plus, most financial lenders will offer lower rates for home refinance loans that have a shorter time period attached to them.

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ytimg.com/vi/z1Zbp8Q2vYA/0.jpg” align=”left”/>Adir Shiffman, CEO, HelpMeChoose.com.au explains why doing a comparison improves your chances of getting an approval and a better rate. (FNN 17/6/2009)

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http://www.tennessee-mortgage-lending.com/ Getting your Tennessee Mortgage Financing loan today is more difficult than it was a few years ago. That’s why at Tennessee mortgage lending we are doing our part to make the process easier with these on-line features.

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See our Customer Testimonials page to see what our satisfied customers have to say about us at http://www.tennessee-mortgage-lending.com/testimonials/ or just click on the testimonials button.

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Give us a call for more details on the programs we offer. Whether you are buying a home in Tennessee, Alabama, Kentucky, Arkansas, or Mississippi, Tennessee mortgage lending is your one-stop mortgage lending Web super-store.

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Check us out on their site at: http://certified.verified-safe.com/tennessee-mortgage-lending.com then remember to give us a call for your $500.00 off closing fee or You FREE Mortgage Evaluation and Credit report. You can count on Tennessee mortgage lending for all of your Tennessee Mortgage Financing needs.

We will always provide you with safe, secure, accurate, fast, and most importantly respectful mortgage services. It will be our pleasure to serve you, give us a CALL Dennis Wyatt 615-504-6052 or click to start your mortgage application online today.

Troy Williams is an internet marketing expert and President and CEO of Verified-Safe, LLC. in Lebanon, Tennessee. During the past 19 years Troy has received training at seminars and workshops on fraud and scam detection and prevention, ethical business marketing and the State of Tennessee required annual continuing professional education to maintain his licensure as a private investigator.

President John Gormley of SBI Seminars of Dothan, Alabama has awarded certificates of completion of the many certified training courses attended by Mr. Williams.

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The #1 New York Times bestseller by Kathryn Stockett comes to vivid life through the powerful performances of a phenomenal ensemble cast. Led by Emma Stone, Viola Davis, Octavia Spencer and Bryce Dallas Howard, The Help is an inspirational, courageous and empowering story about very different, extraordinary women in the 1960s South who build an unlikely friendship around a secret writing project – one that breaks society’s rules and puts them all at risk. Filled with poignancy, humor and hope, The Help is a timeless, universal and triumphant story about the ability to create change.

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Among all other loans available in the loan market today, the secured personal loans perhaps are the best. There are adequate reasons too to describe why these loans are the best. So, if you are in search of a good and reliable loan it is better you approach it and enjoy all the top class facilities that are being associated with it.

Among all other facilities offered by these loans the topmost one is that the rate of interest in it is very low. You will find it quite lower and no problem will arise for you while paying it off each month. Hence, the loan periods too will not be burdensome. After this you will find that the offered amount too is quite large in it. This amount will enable you to manage many financial issues and no economic stress will disturb you anymore. Thirdly, you will get a very long repayment term to easily pay the loan off. So, with all these facilities you will get the opportunity to borrow £5,000 to £75,000 for 5 to 25 years.

The most important ground that every borrower has to meet is that providing collateral is must. The collateral would have to be anything that is valuable. For example, car, home or stocks and bonds will be good to be kept as security. So, it is must for the borrower to be a homeowner in order to withdraw these loans.

The bad credit holders will be quite helped by these loans as they will enjoy low interest rates in it. In comparison to all other loans the rate of interest in it will be quite favorable for them because they are mostly been charged higher interest rates by others.

You can draw the secured personal loans for bigger financial purposes like buying a car, arranging wedding, supporting child’s education, medical treatments or for planning holiday tour.

Renita Vaughan