Frank Collins asked:




The home loan industry has changed stated income loans requirements if you don’t know yet. Most lenders now want full documentation loans and borrowers qualifying by using traditional debt to income ratio calculations. This directly affects the high cost housing markets like California, Florida, and the tri-state area of New York, New Jersey, Connecticut as well as parts of Maryland, Virginia, and Massachusetts. The reason is a lot of homeowners in these markets used adjustable rate mortgages and qualified by using stated income, stated assets and some instances no verification of employment.

The adjustments for adjustable rate mortgages (ARMs) will continue through 2010 and into 2011. Most homeowners will be unable to refinance due to loss of equity in their home, their job, or other hardship. So, their best option is to negotiate with their loan servicing company or let the home go into foreclosure. Homeowners need to understand that when they send in a payment to the lender or loan servicer, that is their primary business to collect debts not negotiate with the public to change terms or modify interest rates. Furthermore, in a majority of the cases the borrowers do not get through to the right person or worse yet call them back in a timely fashion until they are close to foreclosure.

If a borrower has a truthful hardship and the bank is slow to react or refuses to listen what happens is a foreclosure results and the borrowers credit is hurt for seven years. When you are facing this situation and getting nowhere with a business and you don’t get the results you need in a timely manner, you should hire an attorney who specializes in foreclosures and loan modifications!

There are many stories from borrowers who say they most banks will not discuss your situation unless you are behind two to four months in payments. Once that occurs, your hard earned credit scores from years of being responsible are wiped out. Furthermore, you may never be eligible for a home loan at market rates for quite some time.

The solution is to use a loan modification company that actually does have an attorney on staff to get answers and responses quickly so your situation is resolved quickly. You end up keeping your home, getting a loan modification, reducing your interest rate to an affordable level, and in some cases reducing your loan principal but there’s no guarantees. An experienced debt representative from the attorney backed loan modification company will call you to see if you do qualify based on certain criteria.

Although, some firms will take your money even if you don’t qualify. Those are the ones you have to watch out for. They hit you when you’re down. Work with a loan modification company that has success, years of experience, paralegals and an attorney on staff. You will feel more at ease knowing you have the best team working on a solution for you whether it be a short sale, a deed in lieu of foreclosure, tax ramifications of short sale, or a loan modification.

A lawyer who specializes in negotiating with lenders can achieve magical results especially if they find RESPA or TILA violations to use for leverage. A real estate attorney understands how to speak their language and get the lender to negotiate. When a homeowners uses an Attorney, the lender’s loss mitigation and legal department become very receptive and responsive. Get a good legal team on your side to stop foreclosure and get a loan modification!

Kelly

Scott C. Hubbard asked:




The next mortgage crisis 2010 is on the horizon. This could be as bad as the United States sub-prime mortgage crisis 2009. Most people feel that the economy is recovering. The U.S. stock market reflects that opinion. The housing market has improved as sales increase and home prices stabilize. We are not seeing as many foreclosures as we saw a few months ago.

The gross domestic product grew in the third quarter at a 2.8% rate, the first increase in several quarters.

The Leading Economic Indicator (LEI), published by the Conference Board, increased at a rate of 4.2% in October. This was the seventh month in a row that there has been an increase. These LEI numbers give a good indication that the economy will continue to grow.

Federal Reserve Chairman Ben Bernanke proudly asserts that the worst is behind us thanks to his wise manipulation of the economy. It’s interesting that Bernanke and the Fed feel they can bring us out of the recession when they had no clue that their low interest rates and extremely stimulative policies were a major factor in putting us in a recession by causing the housing real estate bubble.

When the housing real estate bubble burst, the Fed had no idea just how severe the crisis was. Bernanke assured everyone that the housing market disturbance was contained and would not be a problem going forward. He later claimed that the losses from the housing market issue would be less than $100 billion. Total losses far exceeded that amount. Unfortunately, many people followed his advice and had major losses in their stock market portfolio.

The federal government bank stress tests were concluded earlier this year. Bernanke assured us all by saying that “most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized.” But as of today, banks continue to hold onto the money given to them by the federal government and aren’t willing to loan it out.

How can we trust the Fed and Bernanke to lead us out of this recession when they have such a horrible track record? Bernanke feels that his policies can control the financial markets. Bernanke feels that he is smarter than the market. He is not willing to trust the natural economic forces to help solve our problems. History shows that he is wrong.

If the economy is improving, as Bernanke says, why is the Fed keeping interest rates near zero and maintaining such accommodative policies?

We have moved beyond the United States sub-prime mortgage crisis 2009. The period between September – December, 2009, is the lowest point of the mortgage resets. Therefore, the housing market and foreclosure problem should be improving today, just like it is.

But another mortgage crisis is soon coming. In the second quarter of 2010 through the fourth quarter of 2011, there will be a significant number of mortgage rate resets in Alt-A and Option-ARM mortgages. Most of these mortgages were established during the peak years of the housing real estate bubble. As a result, these mortgages now have an extremely high loan to value ratio and will further aggravate the foreclosure problem.

This new foreclosure problem will cause further writedowns on the books of U.S. banks. This is the reason that the Fed and Bernanke are keeping such accommodative policies. They are very well aware that the next mortgage crisis 2010 will cause major problems for the banks. Most Americans are completely unaware that this event is on the horizon.

A strong economic recovery is important to many corporate professionals. Some have lost jobs, and a strong recovery will help them find employment. Others are feeling job insecurity and hope that a recovery will improve the financial picture for their companies.

President Obama feels that all of his stimulative policies have had a powerful impact on the economy. Although he remains cautiously optimistic, he feels that the economy will continue to grow. The statements made by the Federal Reserve indicate their belief that their policies have worked.

I hope that what they are saying is correct. But I feel that we still have major problems to overcome. Because of our very uncertain economy, I recommend that employees set up a job backup plan that can protect them in the case of loss of income of a family member. The internet marketing industry is a recession proof alternative that needs to be considered.

Marjorie

Michael Petrone asked:




President Barack Obama is well aware that the current economic situation in the country leaves a lot of homeowners struggling. Housing prices have crashed and the all time high number of foreclosures does not help that at all, lowering surrounding homes values by as much as 9%. Home and property values have dropped so far that many homeowners now owe more on their mortgage than their home is actually worth. Due to these problems, the Obama administration has introduced the housing and homeowner stimulus plan. This plan was announced in February and has started this month. Most people no longer have 20% equity in their homes, which is typically required for traditional mortgage refinancing, due to the dropping home prices. The stimulus plan from President Obama is going to make it easier for homeowners to modify or refinance their current home mortgage and have more manageable monthly payments and avoid a possible foreclosure. The goal of this home mortgage stimulus plan is to help over 5 million homeowners stay in their homes and avoid foreclosure or defaulting on their loan. This is done by giving incentives to mortgage lenders to use their new guidelines for approving a mortgage refinance. So with more incentives and less risk to mortgage lenders are going to be more flexible on who can refinance, how much they can save, and finding financially affordable monthly mortgage payments.

Homeowners looking to refinance or modify their current mortgages will get their loans restructured by mortgage lenders. With this plan, the maximum allowable monthly mortgage payment can not exceed 38% of the homeowners gross monthly income. Mortgage lenders will also get a dollars for dollar incentive from the government to further lower the monthly payments to 31% of the homeowners gross monthly income. This is great news for a lot of homeowners who are out of work or just struggling to make their monthly mortgage payment. A lot of homeowners currently pay 40% or even 50% of their income towards their mortgage. A 20% reduction would add up to a lot of saved money every month.

The Treasury of the United States has an exact series of guidelines for mortgage lenders and banks to complete when refinancing or modifying a home mortgage loan. In the past for example, mortgage loans have been refinanced or modified by adding on missed payments to the loans principal which basically did nothing to reduce the monthly payment. The housing mortgage refinance stimulus plan announced by Obama will mean a great amount of savings for millions of homeowners.

Kim

Naomi Smith asked:




If you are not familiar with the term mortgage correspondent then you are probably much more familiar with the term mortgage broker. Well, they are really just different names for the same person.

Now, let’s take a look at exactly what this position entails. Specifically, they bring people looking for a mortgage together with companies that are mortgage lenders. They specifically do not provide mortgages though.

The mortgage broker gets paid by collecting a fee from the lending company or fees collected from the borrower. Therefore, a mortgage correspondent facilitates transactions between the lender and the home buyer.

Since they have access to many different lenders, they can be a benefit to the borrower in finding the best and lowest mortgage rates.

Due to increases in mortgage fraud, the industry has become much more regulated, which obviously benefits the consumer. One of the new regulations in the US is that brokers must be licensed before they can even work in the business. In Canada though, mortgage correspondents have been licensed for some time now.

Not everyone goes through a broker to secure a mortgage. You can always go right to your bank and secure a mortgage with them. Often, you can get a reasonable rate working with your existing bank.

The skill of an experienced and knowledgeable correspondent is quite useful in times when the economy is in turmoil such as it is now. A good broker can help analyze and review your current financial situation and in doing so can determine the best mortgage that you may be able to obtain.

Keep in mind that it is getting harder to qualify for a mortgage these days with all the foreclosures happening in the United States. It is making lenders much more strict on the lending qualifications, which is obviously a good thing.

Before choosing a mortgage correspondent, do some research. Make sure the company has been in business for awhile. Speak with some existing clients of theirs if possible. Check with your local Better Business Bureau as well. Even though the industry has improved greatly, you still must do your due diligence.

Philip