Archive | Loan Modification

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One in Seven Homeowners is Past Due on their Mortgage or in Foreclosure

Posted on 30 August 2010 by Aaron Hofmann

According to the State Foreclosure Prevention Working Group’s latest report on home loan delinquencies, we have seen an improvement in loan modifications not becoming delinquent within the following six months. Loans modified in 2009 are 40 to 50 percent (40% – 50%) less likely to be seriously delinquent six months after modification than loans modified at the same time in 2008. In addition, recent modifications that significantly reduce the principal balance of the loan have a lower rate of redefault compared to loan modifications overall.

Finally, while loan modifications have consistently increased over time, the numbers of foreclosures continue to outpace loan modifications. Nearly three years into the foreclosure crisis, the report finds that more than 60% of homeowners with serious delinquent loans are still not involved in any loss mitigation activity. With the significant overhang of seriously delinquent loans, they anticipate hundreds of thousands of foreclosures will occur later this year absent additional improvements in foreclosure prevention efforts.

According to the Mortgage Bankers Association’s latest report on home loan delinquencies, one in seven homeowners is past due on their mortgage or in foreclosure.  The report shows that mortgage delinquencies rose during the second quarter, and overall, one in seven borrowers is delinquent or in foreclosure. That’s up from one in eight a year ago and one in 11 two years ago. Although there was a dip in the share of homes in foreclosure, the report shows that the foreclosure epidemic continues, with millions of homes still at risk.

If you are at risk of foreclosure, contact us today to see what your options are because procrastination is certainly not one of them. Loan modifications are a possibility to keep you in your home and if you don’t qualify for a loan modification, we can talk to you about the benefits of a short sale rather than losing your home to foreclosure and the destructive impact foreclosures have on your life.

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Georgia Ranks Third in Mortgages Past Due

Posted on 07 March 2010 by Aaron Hofmann

Georgia is third in the nation, with 13.5 percent of mortgages one or more payment past due as of December 31st, according to the Mortgage Bankers Association’s National Delinquency Survey. Florida and Nevada came in at #1 and #2.

The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near. That’s important because mortgages that are 30 days late generally serve as a leading indicator of serious delinquencies and foreclosures.

The U.S. Department of the Treasury recently reported while more than 1 million U.S. homeowners have started the process of modifying their home loans under the government’s Home Affordable Modification Program (HAMP), only 116,000 have actually had their mortgages modified as of last month.

In Georgia, there have been 33,059 active trial loan modifications through January. Of them, 4,508 have been permanently modified.

Atlanta is among the top 15 metro areas for HAMP activity, accounting for 3.2 percent of overall HAMP activity. The city had 30,285 active trial loan modifications through January. Of those, 3,692 were permanently modified.

If you or someone you is having financial issues and concerned about foreclosure, contact us for a free report on Avoiding Foreclosure.

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Credit Suisse Estimates 3.2 million foreclosures must be prevented

Posted on 02 January 2010 by Aaron Hofmann

Foreclosure prevention efforts need to become vastly more effective or housing prices will resume their tumble, according to a new report by Credit Suisse analysts.

The industry can expect to see either housing stabilization or “a renewed leg down” in the second half of 2010, depending on the success rate of foreclosure prevention efforts, global financial services firm Credit Suisse said in a research note this week.

“We estimate that roughly 3.2m foreclosures must be prevented in 2010 for home prices to stabilize or potentially tick up,” researchers said. “This is an uphill challenge, but a combination of current government programs and their future iterations offer a narrow path for success.”

The report concludes that some 4.2 million homes are currently estimated to be heading into foreclosure next year and that 3.2 million foreclosures in all need to be prevented to stabilize the housing market. For those doing quick math, that comes out to about 75% needing some sort of modification, short sale or other foreclosure prevention solution.

So far, government and private success rates have been nowhere close to that.

About 31,000 homeowners have received permanent relief under the Obama administration’s mortgage modification program. Part of the administration’s $75 billion effort, the plan aims to help troubled homeowners modify their mortgages into sustainable monthly payments relative to income. About 700,000 homeowners are enrolled in three-month trials.

The administration said the Home Affordable Modification Program (HAMP) would help three to four million homeowners, but that’s their goal through 2012. A government watchdog has publicly questioned numerous times whether that’s achievable, given the performance to date and the plan’s design. For example, the plan requires that homeowners have an income. With 10 percent unemployment, many experts have questioned whether the program can help the unemployed stay in their homes.

“Current performance statistics on HAMP are quite disappointing in the above context,” the Credit Suisse report notes. “However, multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods are likely to keep volume of foreclosure sales under check.”

The analysts argue that there are early signs of recovery. Thanks to a decline in foreclosure sales from their winter highs, the homebuyers tax credit, and “record high affordability levels,” housing prices have begun to stabilize.

But for a recovery to take hold next year, foreclosure sales will have to decrease even more. The analysts note that if foreclosure sales represent some 25-30 percent of all home sales next year, a decline from current levels, then home prices could see an uptick.

“We anticipate multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods by lowering the bar or directing them towards alternative foreclosure prevention programs,” they wrote.

Underscoring the importance of preventing foreclosures, the Credit Suisse report notes: “Home price stabilization has primarily resulted from decline in share of foreclosure sales.”

If those start to creep up, this year’s gains in stabilizing the housing market could evaporate.

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Let the Public Pressure Campaign Begin

Posted on 26 December 2009 by Aaron Hofmann

Last week, the Obama administration issued their first monthly reports on mortgage loan modifications, which is really intended not to show America that the government is watching, but more of trying to publicly disgrace banks into making a concerted effort to fix the issues that they so aptly created. As we mentioned in the article, “Who to Believe?“, this will be part of the administration’s strategy to ensure the banks work to help keep struggling Americans in their homes.

The initial report included more than 30 lenders, but noted two banks, Bank of America and Wells Fargo, as having a dismal rating, which is concerning since they have received large sums of taxpayers’ bailout money. The rescue money that was spent on the banks was expected to encourage greater lending and more loan modifications.

The report indicated that Bank of America only extended modification offers to 13% of the nearly 800,000 mortgages that were at least 60 days late on payments and potentially eligible for a modification. It began trial loan modifications with only about 4 percent, or 27,985 borrowers.

Wells Fargo led the banking sector’s voluntary loan-modification program during the Bush administration’s efforts. However, the initial report indicated that Wells had serviced 329,085 mortgages that were 60 days late, it extended offers to only 38,673 homeowners, or about 12 percent of those eligible, and started trial modifications with another 20,219 loans, about 6 percent of the eligible.

I’m sure we will be getting the bank’s interpretations of this report and their own PR spin along the way. So the question ultimately will be whether the Obama administration’s plan can pick up pace are start making real improvements or will it continue to flounder.

With the new short sale incentives being introduced, but not taking effect until April 30th, it will be interesting to see what happens in the coming months. If you are an Atlanta home owner and you are behind in your mortgage payments, be sure to contact us . We’ll be glad to discuss your situation and offer solutions and a step-by-step strategy to avoid foreclosure.

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Foreclosure Prevention Solution Sputtering?

Posted on 17 December 2009 by Aaron Hofmann

It’s pretty clear that the goverment’s foreclosure solution is not working based upon data released last Thursday. The government program is known as Making Home Affordable. So far, only about 4 percent, or 31,382, of the 728,000 homeowners currently in the program have moved from the initial, or “trial” phase, to a permanent loan modification.

Compare that with the nearly 4 million homeowners that have received notices of foreclosure this year.

The struggles of the program have led the Obama administration to change its strategy for fixing the foreclosure problem, that many feel if not fixed quickly will destroy any momentum currently seen in the economy.

Treasury officials have warned lenders that they could face penalties if their performance in the program does not improve. About 21 percent of the homeowners enrolled in the program have made their payments and submitted all required documents, but are waiting for their mortgage servicer to move them into a permanent modification, according to the Treasury.

Wells Fargo has moved about 3,500 homeowners into a permanent modification under the program. Bank of America has modified more than 157,000 loans, but fewer than 100 homeowners have received permanent modifications.

Lenders say the backlog can be blamed on the significant amount of required paperwork, which includes hardship statements, pay stubs and bank statements. Approval can be held up by the lack of a single signature.

Homeowners are continuing to grow weary of the soft-shoe routine provided by lenders as they continue to ask for documents, lose documents and drag out the process for months. Homeowners trying to find a solution are often left scratching their heads wondering how the process can be so bad if the lenders are really committing resources to addressing applications.

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Spectrum Provides Loan Modification Services to Help Homeowners Avoid Foreclosure

Posted on 15 July 2009 by Carl Martens

This site is dedicated to providing information to homeowners to help them avoid foreclosure.  As the site’s name suggests, we focus most on short sales.  Recently I came across a company that provides foreclosure mitigation services.  I wanted to share some brief information about this company and their services as another way to avoid foreclosure.  The company is Spectrum.

Spectrum is owned and was founded by Matthew Mascarenhas, a ten year veteran of the mortgage industry.  Working within the industry Matthew saw a growing need for a service to help those facing foreclosure.  With offices in both Florida and California the company is well positioned within the regions with the most need.  However, services are not excluded to just these states, the company helps homeowners nationwide.

Prices for loan modification services range and are typically a percentage of the loan, explained one Spectrum employee, but a standard fee is $2,995.  To qualify for a loan modification a financial worksheet is drafted which looks at a homeowners expenses/income to determine whether a modification with the bank is an option.  In order for you to be able to qualify for this option, you must be able to afford your mortgage. Your current income must be sufficient to meet your financial obligations. If your delinquency was caused by a one-time event like illness, loss of job or financial mismanagement, this may be your best option.

For more information, visit the Spectrum website.

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