Cash is King – Upside Down Mortgage Solutions

December 19, 2008

Mortgage Loan Modification: FDIC, Fannie Mae and Freddie Mac Are Here to Help Homeowners.

Listen in on a Interview I did on Loan Modifications and the Fannie Mae and Freddie Mac Streamline Loan Modification Program

Need help with a mortgage loan modification of If you are behind on your mortgage payments

this column will provide you with some useful information.

There is a lot of talk these days from all lender, the FDIC and both Fannie Mae and Freddie Mac with regards to mortgage loan modification.  I think its great that these companies and institutions have stepped up to help homeowners but I have also found that many mortgage loan modifications can be potentially dangerous.  You can find out more information on that topic in this post on Mortgage Loan Modification Terms.

IMPORTANT TO NOTE: If you are current on your mortgage payments we can help there as well.  It requires additional footwork but can be done if we provide the bank with a very “good reason.”  I often find it easy to find the reason because it can be as simple and your debt to income ratio or being self employed or you have declining income.  All these things are ‘reasons’ we give to the bank as to why they need to help you with a note modification.

To have me review your scenario please email me at with Mortgage Loan Modification as the subject


Washington, DC – Seriously delinquent borrowers with mortgages owned by Freddie Mac or Fannie Mae can now take advantage of a new Streamlined Modification Program designed to make mortgage payments more affordable so more families can avoid foreclosure and stay in their homes.   The Streamlined Mod Program officially went into effect on December 15, three days after Freddie Mac sent detailed implementation instructions to its servicers.

Announced on November 11, 2008 with the Federal Housing Finance Agency (FHFA), Fannie Mae and the HOPE Now Alliance, the Streamlined Modification Program replaces several time-consuming steps in a traditional loan modification with a faster uniform process that uses standard eligibility requirements and documents.

“This initiative builds on Freddie Mac’s current loss mitigation efforts, which are on track to provide three out of five of our seriously delinquent borrowers with a workout this year,” said David M. Moffett, Freddie Mac’s Chief Executive Officer.  “Our alliance with FHFA, Fannie Mae, and the HOPE Now Alliance will help our industry bring relief to thousands of distressed homeowners.”

Under the Streamlined Modification Program, mortgage and escrow payments can be cut to 38 percent or less of an eligible borrower’s gross monthly income by one or more of the following steps as necessary: reducing mortgage rates, extending the mortgage term up to 40 years, or forbearing part of the principal. To be eligible, borrowers must own and occupy the property as a primary residence, have missed at least three mortgage payments and not filed for bankruptcy.

Borrowers should contact their servicers if they think they may qualify.  At the same time, servicers will be identifying eligible borrowers and reaching out to them through the mail.

If an affordable payment cannot be achieved through the Streamlined Modification Program, servicers will evaluate borrowers through the traditional modification process. Servicers will also continue reaching out to distressed borrowers as early as possible to determine their eligibility for a workout or other foreclosure alternative.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.


December 4, 2008

Adjustable Rate Mortgage and Stated Income Loan: How to Handle the Adjustable Part

Learn more about Refinancing an Upside Down Mortgage- Get Your Free Report Here

Let’s roll back the clocks a bit!

Say it’s 2003 and the Real Estate Market is hot as every.  People are buying up new properties moving up, down and sideways.

From a financing point of view, people were refinancing and buying new homes at an incredible pace and at the best interest rates in years. It was common

A simple loan called the Stated Income Loan was being used all over the place to help people either refinance or purchase those large homes.  Many of these loans were adjustable rate mortgages to help lower the interest rate and keep the payment low.

A Stated Income loan is simple to explain.  It allows a high asset holding and excellent credit buyer or borrower to simply put whatever income they wanted on their loan application in order to qualify.  Sounds interesting, no wonder why they call it the liars loan.

Now I want to point out that this loan WAS misused but the original intent of this loan was to be for those high-income earning or self-employed individuals who couldn’t show on their tax returns the required amount of income to qualify for their loan.  Most self-employed people have large amounts of write-offs on their tax returns leaving little to help them qualify for a new loan.  As long as there were assets lenders were willing to lend.

Now this sets up things in the current market.

We have seen property values dip and lending guidelines go from loose to beyond tight.

The Stated Income Loan is a thing of the past and has been eliminated almost entirely.  Even if there were options the interest rates on these types of loans would be extremely high and almost unaffordable.

The government has rolled out help for many homeowners but Self-Employed people are stuck in their loans for a variety of reasons but the biggest dilemma they have is that their loans are mostly adjustable and will increase when their fixed period ends.

This brings up a question, if lending guidelines have tightened some much and there are no longer loans available for people in this category what solutions do they have?

The answer isn’t overly complicated just not what you would expect.  The solution is in the hands of the existing lenders or those who currently hold the loan.  They will have to help these homeowners by way of a Loan Modification.

A Loan Modification will adjust the terms of the existing loan to make it affordable to homeowner.  There are rules that a typical a lender would look at to qualify these folk but this may be far easier than an actual refinance.  Worst case would be a 5 year freeze on the interest rate which doesn’t completely solve your problem but will put it on hold for quite a while.

Another area you could look into is finding your local short sale agent to help you figure out how to get out from under your mortgage.  This is far better than giving up and walking away.

To start the Loan Modification Process you simply need to email me at brent[at]

Read here about Short Refinancing

California Refinance

Steven Chu

December 2, 2008

Coping with an Upside Down Mortgage Part I

Learn more about Refinancing an Upside Down Mortgage- Get Your Free Report Here

Listen in on a Interview I did on Loan Modifications and the Fannie Mae and Freddie Mac Streamline Loan Modification Program

I recently teamed up with my Attorney friend Steven Beede and he and I have decided to produce a series of BLOG posts and CD’s  to help individuals and families Cope with their mortgage during this tough time.

You can expect to have this series available within two to three weeks with details coming out periodically along the way.
The series will include:

  • Information on the process and how it will impact you in the future
  • Credit impact for any decision you make
  • Legal implications moving forward
  • Who to contact when Refinancing an Upside Down Mortgage
  • Who to contact when you need to short sale your property
  • How to handle a second mortgage to avoid any future legal and financial issues
  • Modifying your mortgage properly


Learn more about Refinancing an Upside Down Mortgage- Get Your Free Report Here

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