Cash is King – Upside Down Mortgage Solutions

September 17, 2010

Underwater Mortgage Help – FHA Short Refinance Program

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// Homeowners who have seen their home’s value drop over the past months may have options in dealing with their underwater mortgage through a new FHA short refinance program. Homeowners who might qualify for this program could see a principal reduction on their underwater mortgage and have the opportunity to refinance for an FHA home loan, which could bring a more affordable mortgage interest rate and lower monthly mortgage payment.

Many homeowners who own more on their home than their home is actually worth are obviously in a very difficult financial situation, especially in cases where a homeowner’s monthly mortgage obligation has become problematic due to the loss in property value. Interest rates on home loans are quite low at the present time but underwater homeowners have been unable to refinance for a more affordable mortgage rate and possible mortgage payment since they have negative equity in their home.

Yet, it’s hoped that this new Federal Housing Administration program will bring more options to homeowners in an underwater mortgage situation so that they may make their home loan payment more affordable and avoid foreclosure. However, there have been some concerns over whether this program will be successful due to the fact that mortgage servicers will be required to offer a principal reduction before homeowners may qualify.

Mortgage servicers have been reluctant to offer principal reductions in some cases and since another qualification of this program is that a homeowner must be current on their home loan payments, it’s believed that mortgage servicers may not offer principal reductions in cases where homeowners can still meet their mortgage payment requirements. However, homeowners who may be struggling to stay current on their home loan payments may find assistance through this short refinance opportunity as long as their mortgage servicer will work with them to provide more affordable mortgage payment options.

July 1, 2010

Underwater Mortgage – Strategic Mortgage Defaults

It’s amazing to me that people are so shocked when someone says they are no longer going to make payments on their home that has a underwater mortgage.  Look at what they are saying, they simply see that their payments are going towards a dead asset or in this case their mortgage.  They just don’t see the point as they are the glass half empty type of people.  You know these folks everything is a negative thing ahead of the potential positive outcome.

It becomes an ethical question at this point, make your house payments or stop paying and walk away.

If you have been here before I have addressed the common response of walking away from your home as something that should never happen.  I truly believe that you need to fight to find solutions before resorting to the easiest course of action.  It’s just easy to walk away and it’s HARD to stay in and fight with your bank or lender to make things work “The Right Way”

“The Right Way” is fighting for a desired outcome and not taking the path well traveled.

1. Attempt a loan modification –  This is difficult to accomplish and will often require duplicate work on your end just to have them look at your paperwork.

2. Attempt a Short Sale – this is selling your home for less than the loan amount.  It is very common these day and there are some very good Short Sales Agents out there so just go find one you like and make it work.

3. Try a Short Refinance – This is not easy but it is possible to refinance your home for less than you owe.  You need to demonstrate a hardship and if done correctly you can get your balance reduced and you remain in your home.

4.  Sell and rent back – this is more complicated but can be done if you absolutely want to stay in the home you currently own.  You also might get lucky and be able to buy the house back for less shortly after you short sell it to the investor.

Many times people don’t work through all their options because it is just TOO HARD!  There is a whole lot of emotional stress when it comes to dealing with your mortgage.  I guess anytime you deal with finances it seems to be difficult.  Just know you have options and that figuring out those options is not that difficult.

SHORT REFINANCING HELP

January 8, 2009

Citigroup and Bankrutcy Judges Join Forces to Save Homeowners from Foreclosure

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

News came out today that may help many homeowners who are facing problems with their mortgage.  Letting your house go because the home is upside down and you need help start with my free report and if that only wets the appetite then move on to my free video series on Refinancing an Upside Down Mortgage

You can also find help from my friend who is the Sacramento Short Sale Agent I recommend

Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to let bankruptcy judges alter loans in an effort to prevent homes from going into foreclosure. Other lenders are expected to follow suit.

Known as “cramdown,” the rewrite would let bankruptcy court judges erase some mortgage debt to help bankrupt homeowners better handle their payments, subject to strict conditions.

The legal reform would help “millions of families save their homes,” said senators Richard Durbin of Illinois, Charles Schumer of New York and Christopher Dodd of Connecticut.

Michigan Democratic Rep. John Conyers has introduced the mortgage bankruptcy measure in the House of Representatives.

Under the terms of the reform as agreed, only mortgages entered into prior to the date of enactment of the bill would be eligible for the treatment, the senators said.

Homeowners would have to certify that they have tried to contact their lender before filing for bankruptcy, they said.

Only major violations of the “Truth in Lending Act” would invalidate creditor claims on bankruptcy, they said.

Schumer said his office has contacted top bankers nationwide and some said they would be supportive.

Officials at other top banks — including Wells Fargo (WFC.N), Bank of America (BAC.N), SunTrust (STI.N) and JPMorgan Chase & Co (JPM.N) — were contacted by Reuters but had no comment.

This latest adjustment to Bankruptcy law will help homeowners avoid any possible foreclosure and allow for someone other than the bank to make adjustments to the toxic mortgages that have plagued homeowners facing foreclosure.

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

August 28, 2008

Loan Modification: Do the Terms Favor You or The Lender?

Listen in on a Interview I did on Loan Modifications and the

Fannie Mae and Freddie Mac Streamline Loan Modification Program

THIS ARTICLE IS GOOD BUT READ

HOW TO REFINANCE AN UPSIDE DOWN MORTGAGE

So I just reviewed a readers Loan Modification Agreement from his lender and it was interesting to see that yet again he was only getting what he asked for and nothing more.

To fully understand what made this unique let me set some groundwork:

1.    The Homeowner was more than 120 days behind on his mortgage payment
2.    The home was more than $170K upside down
3.    He was in a fixed rate loan currently but had a personal set back that caused him to be late on his payment
4.    The bank agreed to a modified forbearance and loan modification and the client was unsure about the agreement and contacted me

Now if you were a bank and were out to make money, with absolute disregard for the individual who is struggling, what kind of terms would you think the bank would put together on their Loan Modification?

The OBVIOUS answer is terms that FAVORED THE BANK!

That is exactly what the bank did with this Loan Modification Agreement!

So the Loan Modification agreed to lump all missed payments onto the back of the loan and increase the payments $100 of the existing note payments.  They kept the interest rate the same and the term they extended the length of the missed payments.

Now to do this, the bank never agreed to discontinue reporting mortgage late payments to the Homeowner’s credit report.  Ironically the loan would have continued to report late month in and month out until all the missed payments were paid in full.   At a $100 per month clip that would have taken the client in excess of 6 years, so that would have been 6 straight years of missing payments OUCH!

They also threw in a clause that took away the bankruptcy protection a homeowner has by stating the loan could NOT be included in bankruptcy at any future point.   Now 30 years is a long time and a whole lot can happen in that time and to not have that protection moving forward could potentially be detrimental to the homeowner because at some point he may need that protection and not be able to have it because the loan modification would have prevented it.

I can only imagine how many other people out there have signed these kind of loan modifications.  They have either been taken advantage of or they got what they were looking for I guess it depends on how you look at things. People keep their home under the banks loan modification terms, win – win?

As always I am here to help so please let me know what I can do to help.  Tell me your story and I will see what I can do to help.

August 13, 2008

Hiring a Loss Mitigation Negotiator for Your Upside Down Mortgage

Here is yet another email from a reader looking for a solution to his mortgage problem.

BE SURE TO READ THE RESPONSE AND BOTTOM FOLLOW UP AS IT MAY BE THE MOST IMPORTANT PART TO THIS WHOLE POST.

Brent,
I happened on to your Blog and saw you were helping a lot of people.  This is more than likely a similar situation as most people who write you.

I bought my house 3 years ago and at that time it was an 80% First trust, 15% Second trust and 5% down payment.  I bought it for $585K in “some city, Some State.  My neighbor has their house on the market and it’s the exact same model for $549K.  It’s only been a month so my fear is they will probably lower their asking price even more.  The first trust is an Interest-only ARM and it will adjust January 2010 and I know if it adjusts I will more than likely not afford the new payments.  When we first bought the house we only planned on living here for 4-5 years and than moving out of the area, but since then are plans have changed and couldn’t do it now even if we wanted to.  My goal is to keep close to the same payments as I have now and we don’t plan on moving any where in the indefinite future (if we can help it).

What options do I have?

Thanks,
T.

Hi T.

Here we have a classic example of a first and second mortgage that is slightly upside down and the solution is easy.

It’s only made difficult when we look to solve the second mortgage equation.

So my math, purchased at $585K and have loans to 95% of that price or $555,750.00.

We have a first of $468K and a second at $87,750.00.

Now for some standard loan guidelines to support our scenario, a FHA loan will refinance in first position to 95% regardless of CLTV (combined loan-to-value).  Translation, YOU CAN EXCEED 100% LOAN-TO-VALUE and in this case solve the Upside Down Mortgage problem you have.  Now not all lenders do this or even know this is allowed but it can be done and I do it often.

Your next move, we need to get you qualified for a FHA loan to 95% LTV.  Once we have that done we will need to hire a Professional Loss Mitigation negotiator who understands your scenario and has the ability help us solve your second mortgage equation.

The second mortgage will need to agree to do one of two things:

1.    Subordinate allowing us to refinance your first to something that isn’t out of control.
2.    Agree to settle the balance by taking cash out with the first mortgage in hopes of paying only a portion of the balance owed on the second under the notion they would waive the remaining balance.

I guess we could chalk up a third option, they could agree to nothing and we would be stuck!

I think it’s obvious which option is best, we want them to settle and allow us to move on with only one mortgage at a balance that is lower than the current balances combined.

Not to get these companies to make these types of adjustments you need to be a Real Estate Attorney or you need to hire one.  You could go out and do this on your own and pay through the nose for it or you could go with my team and pay a pre-negotiated amount.

If all goes well and according to plan you should end up with a lower loan balance and in turn a lower mortgage payment than you may currently have.

I hope that helps you and your family with the decisions ahead.  As always I am here to help and together we can make GREAT things happen.

Be in touch.

Brent Lane

To hire my team to assist you and your family it will cost $1350 which will go to cover both a Real Estate Attorney to review your loan documents as well as the hiring of a Professional Loss Mitigation Negotiator to negotiate the settlement.  If no settlement can be reached we will refund you $450.


More information on a Professional Loss Mitigation Negotiator can be found at PROFESSIONAL LOSS MITIGATION NEGOTIATOR

You can email me for a copy of my contract to review at Brent@brentlane.net

To get started right away, I will need an email from you listing your scenario, copies of all your loan documents from your last loan either scanned or faxed to me (916-580-6650) and I will forward a contract to you to sign and get back to me as well.

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