Banks Don’t want to foreclose on your house! When a mortgage company forecloses on a property more often than not they lose money, and they lose even more when they have to take ownership of that property. The good news is that there are alternatives to foreclosure that benefit both the borrower and lender.
The bad news is that most borrowers are only a number, one of millions of other numbers, to their mortgage company. The truth is that most mortgage companies don’t need to or want to specifically help individual borrowers. Even though their financial success really relies on keeping borrowers out of foreclosure often their need to meet their numbers makes it hard for them to recognize the value of working with individual borrowers. Even though mortgage companies financial success depends on keeping borrowers out of foreclosure, mortgage companies are the largest owners of real estate in the world due to foreclosures.
Hardships are the Key to Getting A Lender’s Attention
Hardships are a borrowers best tool in convincing the lender that a loan modification or workout plan is in order. Here are some of the hardships that lenders will consider:
Adjustable Rate Mortgage Reset- Payment Shock (uncommon, but more lenders will accept this in the future)
Illness
Loss of Job
Reduced Income
Failed Business
Job Relocation
Death
Incarceration
Divorce
Marital Separation
Military Duty
Medical Bills
Damage to Property (natural disaster or unnatural)
A free do-it-yourself modification kit is available at MBA Commercial .
A free 24 hour recorded message explaining loan modifications is available at 800-958-1952 .
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JUDICIAL FORECLOSURE - A foreclosure action conducted through the courts instead of through a
foreclosure trustee. Judicial Foreclosures are very uncommon in California, particularly on residential
properties. Should a lender elect to pursue a deficiency judgment, it would be through a Judicial Foreclosure.JUNIOR LIENS - A lien, usually a mortgage loan, that is subordinate to a Senior Lien, usually a first mortgage. Lien priority is generally established by recordation. NOTE: if you refinance a 1st mortgage on a property with a 2nd mortgage already in place the new 1st mortgage holder will require a subordination agreement from the Junior Lien holders to legally establish the new mortgage holder as 1st or Senior Lien holder.
LIBOR (London Interbank Offered Rate) - The interest rate charged among banks for short-term Eurodollars loans - LIBOR is a very common index for adjustable rate mortgages (ARM).
LOAN MODIFICATION - An adjustment to the terms of a mortgage, usually to assist a homeowner who has gone delinquent on the mortgage, or one for whom mortgage difficulty appears unavoidable. Among the most common modifications are adjustment to payment terms, adjustment to the interest rate or shifting of delinquent amounts for repayment later in the loan term.
LOSS MITIGATION - Home mortgage lenders look to limit losses on delinquent mortgages by working out solutions with borrowers through their Loss Mitigation Department.
NOD - Short for Notice of Default
NOTICE OF TRUSTEE SALE - An official notice that is posted, mailed, published/advertised and recorded by Trustee at the direction of lender indicating lender’s intention to sell the property at public auction. The notice typically includes a specific date, time and location.
If you are looking for help negotiating with your lender contact MBA Commercial or call Toll Free, 800-958-1952 and listen to our recorded message available 24 hours a day.
Study up and learn the lingo from the following Glossary of Terms:
BENEFICIARY - The beneficiary in a foreclosure context is generally the mortgage lender. Frequently referred to as the “Benny”.
CREDIT COUNSELING - Under the new bankruptcy law which took effect in October of 2005, those wishing to file bankruptcy must complete an approved credit counseling course within the six (6) months prior to filing.
DEED IN LIEU OF FORECLOSURE - The voluntary surrender of property by an owner/borrower to a lien holder that eliminates the need to continue foreclosure action by the lien holder. The lien holder can refuse to accept the Deed in Lieu and file a Notice of Non Acceptance with the County Recorder.
DISCOUNTED PAYOFF - The payoff of a mortgage loan where the lender accepts an amount less that the actual amount owed to payoff the loan.
EQUITY DEFICIENT- A property is Equity Deficient when, if sold, sales proceeds would not fully pay off existing mortgage debt.
FORBEARANCE AGREEMENT - An agreement between a mortgage holder and a borrower that lays out a specific loan payment plan and often puts a stop on the foreclosure action so long as the borrower meets the terms of the agreement. The payment plan includes provisions for repayment to the mortgage holder of all delinquent interest and fees and could include extending the life of the mortgage beyond the original terms. A Forbearance Agreement is a tool that allows the borrower to keep the property.
If you are looking for help negotiating with your lender contact MBA Commercial or call Toll Free, 800-958-1952 and listen to our recorded message available 24 hours a day.
Federal and state officials, eager to stabilize the housing market, have leaned hard on mortgage companies to honor their pledges to help more homeowners avoid foreclosure.
But in California at least, the mounting pressure has so far produced only modest results. The most common from of avoiding a foreclosure is by negotiating a Loan Modification. Loan Modifications can include reducing the interest rate, extending repayment from 30 years to 40 years, or reducing the principal due. The goal is to arrive at monthly payments - including property taxes and insurance - that typically represent between 30 to 40 percent of a homeowner’s monthly income.
Many homeowners will attempt to negotiate a Loan Modification with their bank, but there are some homeowners who turn to counseling agencies like MBA Commercial for help when in seems their bank is unwilling to negotiate or the process seems to difficault for them. Homeowners who turn to counseling agancies run the gamut from those facing imminent foreclosure to those up-to-date with their loan payments but worried about their future ability to pay.
If you are looking for help negotiating with your lender contact MBA Commercial or call Toll Free, 800-958-1952 and listen to our recorded message available 24 hours a day.
Take equal parts of intuition and research and add a pinch of psychological warfare and you have a recipe for bidding success! For information on being a successful negotiator and hundreds of other topics, check out Home Buying by the Experts, the national best-seller by Brian Yui, C.E.O. of HouseRebate.com. HouseRebate.com — Share the Wealth!!
Always Be Prepared In this stressful situation with so much information being exchanged, it is easy to forget things or miss the details. Don’t rely on your memory, it can fail you. Make sure you have everything written out in front of you. Never make a call without first reviewing your notes, and having a strategy already in place.
Review the Agreement Carefully Once you get a written Loan Modification or Forbearance Agreement look over it carefully and make sure everything you have negotiated has been included in the document. Don’t assume anything spoken will be honored, make sure all of the agreed upon terms are in the written agreement.
- REVIEW IT CAREFULLY -
Pay close attention to these terms in your written agreement:
1. Interest rate and payment calculation
2. Provisions for the mortgage holder’s recovery of delinquent interest and accrued fees. Review both the method of recovery/repayment and the calculation of the total amount to be recovered.
3. Penalties that take effect if the loan is not kept current. In some cases the lender will attempt to keep the foreclosure door open, thereby allowing for an accelerated foreclosure if the loan becomes delinquent again.
If you find a discrepancy kindly bring it up to your lender, as most omissions or mistakes are simply that, and nothing more sinister, and can very easily be corrected.
Get Legal Advice Before signing anything run the documents by a qualified attorney, and have them look for any thing you may have overlooked. Keep in mind that your agreement is more than just a modification of your terms, but it is an attempt to collect a debt. The agreements may ask you to waive certain legal rights that you are entitled to and perhaps contain provisions that you may not understand. If you do work with an attorney make sure you provide him with all the notes you have taken to help give him some insight into the development of the agreement over the course of your negotiations.
A free do-it-yourself modification kit is available at MBA Commercial .
A free 24 hour recorded message explaining loan modifications is available at 800-958-1952 .
U.S. mortgage rates dropped the most they ever had in at least seven years at the end of November as a Federal Reserve pledge to buy $600 billion of debt succeeded where seven cuts in the central bank’s benchmark rate had failed.
The average rate for a 30-year fixed mortgage fell to about 5.5 percent. It was the biggest one-day drop in at least seven years. Federal Reserve Chairman Ben Bernanke had received little help from lenders in his previous efforts to revive the U.S. housing market and halt its drag on the economy.
The central bank pledged to purchase up to $500 billion in so-called agency debt as well as up to $100 billion in direct debt of Fannie Mae and Freddie Mac, the world’s two largest mortgage buyers, and Federal Home Loan Banks. The Fed also said it would set up a $200 billion program to support consumer and small-business loans. Together, the programs almost match the $864 billion of U.S. currency in circulation, as reported by the central bank in a Nov. 20 statement.
The Troubled Assets Relief Program, known as TARP, was approved by Congress and signed by President George Bush on Oct. 3. It gave Treasury Secretary Henry Paulson authority to buy assets after he told lawmakers he wanted to try to clear the market of “toxic” securities containing subprime mortgages.
Paulson used most of the first half of the TARP funds to buy equity stakes in troubled banks and in insurer American International Group Inc. On Nov. 12 he told Congress he wanted to use the second half to relieve pressure on consumer credit.
The Fed plan, in contrast, is focused on buying securities backed with “safe” mortgages that conform to the strict underwriting guidelines of Fannie Mae and Freddie Mac.
Fannie and Freddie have about $1.7 trillion of corporate debt outstanding and $4.1 trillion of mortgage-backed securities.
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Your goal is to buy a house — something that you can happily live in and afford easily. If you don’t have a large down payment there are creative ways to help you negotiate a better deal. There are two major problems that affect potential home buyers. Some are unable to qualify for a loan due to income or credit. Others cannot come up with the required down payment. There are several ways to overcome these obstacles and even buy a home with no money down. For more information, please read the national best-seller written by HouseRebate.com’s C.E.O., Brian Yui, titled Home Buying by the Experts. HouseRebate.com — Share the Wealth!!
It doesn’t take long for your lender to contact you once you start to fall behind in your payments. Your lender will be eager to learn about your circumstances, and find out if you will be able to resume regular payments and how soon. It is very important you take any calls from your lender, and return all their messages because you must establish open communication with your lender if you hope to make progress in your negotiations.
Whenever you communicate with your lender make sure you are friendly and as helpful as you can be, but listen closely. A Forbearance Agreement or a Loan Modification is a business deal and should be treated with the same regard. Provide your lender with accurate and concise information, but stick to the facts, don’t embellish or exaggerate.
It is critical that you listen carefully for two very important reasons:
A. You can’t know what the mortgage company wants from you unless you are listening to their terms. Provide them with ALL the information they require in terms of documentation, but never send anything they have not requested. Additional paperwork or information will not help your case, and in some situation may reveal information that could hurt your case.
B. By listening carefully you may find that your lender is so eager to avoid foreclosure that they will offer more attractive terms in the Forbearance Agreement or Loan Modification than you had though of. DON’T OFFER SOLUTIONS until you learn what your lender has in mind. Ask them to let you know what your options are and then KEEP YOUR MOUTH SHUT!
Maintain a Positive Attitude While you are working with your lender and going through the process of providing your lender with the documentation and information they require, maintain a positive attitude. Your lender will be listening closely to your conversations and will pick up on how you speak, and you need them to believe in you. At the end of the day someone at the mortgage company is going to have to recommend the approval of your settlement proposals and you want that person to believe in you.
What Is Your Direct Number? Automatic phone systems are often set up like mazes and you can spend several hours over the course of the negotiations navigating the system or waiting on hold. You can avoid this aggravation by asking your representative for their direct number. A side benefit of getting this number is that you are assured to be working with the same person every time, maintaining the relationship you have developed with them and saving time in having to recap all of the information that you had discussed with other agents.
A free do-it-yourself modification kit is available at MBA Commercial .
A free 24 hour recorded message explaining loan modifications is available at 800-958-1952 .
Banks Don’t want to foreclose on your house! When a mortgage company forecloses on a property more often than not they lose money, and they lose even more when they have to take ownership of that property. The good news is that there are alternatives to foreclosure that benefit both the borrower and lender.
JUDICIAL FORECLOSURE - A foreclosure action conducted through the courts instead of through a
Study up and learn the lingo from the following Glossary of Terms:
Always Be Prepared
U.S. mortgage rates dropped the most they ever had in at least seven years at the end of November as a Federal Reserve pledge to buy $600 billion of debt succeeded where seven cuts in the central bank’s benchmark rate had failed.
It doesn’t take long for your lender to contact you once you start to fall behind in your payments. Your lender will be eager to learn about your circumstances, and find out if you will be able to resume regular payments and how soon. It is very important you take any calls from your lender, and return all their messages because you must establish open communication with your lender if you hope to make progress in your negotiations.
