Will Obama’s Refi/Loan Modification Guidelines Help Us?

President Obama’s Making Home Affordable Plan, announced Wednesday, March 4, 2009, aims to help up to 9 million homeowners afford their homes in the wake of the current economic crisis. An allied program, called the Home Affordable Refinance can help another 5 million with relatively steady mortgages, but declining home values. If both plans succeed, they will not only keep people in their homes—they can also curb foreclosures and cushion their impact on community and national scales. HomeSave123 can assist you. Simply click here and complete the initial Loan Modification Questionaire to begin your Free Consultation.

Can you do this on your own, absolutely. You might also find some free service or nonprofit consumer credit counselor agency to help, too. But, Do you trust some free service with your home?  What about a  nonprofit credit counselor, or a government staffer to negotiate the best deal with the same lender they just bailed out. Those credit counselors are so back logged and have a difficult time with dealing with their case load. Do you have time to wait. We have heard from one individual that used a nonprofit free counselor, six months later and still no results, the lender started foreclosure, and he could lose the home in foreclosure the end of April if they don't complete the modification in time-- sometimes you get what you pay for. Do we have all the answers, honestly--no, but we will try our best to deal with your lender and get you a better deal.

To date, those lenders and credit counselor have not done that great a job at negotiating a better deal for you that will last. Too many loan modifications completed by those groups are not working. Additionally, Lenders are not offering you all the benefit that this Home Affordable program allows them to offer, they are trying to give the least amount of help and hope you accept it.  They need to be reminded that they can do more to help us all out of this current crisis. So to determine whether you want to try this on your own or seek help, you need to understand the possible options. Do you have the time to deal with being placed on hold, or negotiating with a Lender's staff, and countering their offers? Do you know what debt ratio's are, or LTV, or BPO, or principal forebearance, or amortization options? If not you may want to seek assistance, and that is where our service comes in. We will review your situation and determine if the Home Affordable refinance or loan modification works best for you.

Beyond all the hype surrounding these plans, many of us are still in the dark about who really benefits. Who gets what? How do you know if you’re eligible? Here’s a summary of the Making Home Affordable Plan.

Refinancing Options:

The Home Affordable Refinance plan is offered to Fannie Mae or Freddie Mac loan holders for properties occupied by the homeowner. (Sorry non-owner occupied property owners, need to work under a different set of rules.). Eligible borrowers who are current on thier mortgages but have been unable to take advantage of today's lower interest rates because their homes have decrease in value, may now have the opportunity to refinance. The first mortgage cannot exceed 105% of the current appraised value of the home. That means for a $300,000 home, your total mortgage debt cannot be over $315,000. You can still refinance a second mortgage provided the first mortgage falls within the 105% requirement.

Cash out options will not be available during the refinance, so this program cannot be used to pay off other debts such as credit card bills, student loans, auto loans, ect. Applications for this program will be accepted until June 2010.

Loan Modification:

The first part of your review, is to see if a conventional refinace is an option. If not then a loan modification may be your next best option. Borrowers may no longer have to be behind on their mortgage in order to qualify for a loan modification if they fall within the Making Home Affordable guidelines. Priority will be given to delinquent borrowers, but the main requirement is a debt-to-income ratio (DTI) of 31%. This means that your total monthly payments (including insurance, taxes, and association dues) must exceed 31% of your income, which qualifies you as being in hardship under the progam guidelines. The loan modification option applies to mortgages originated on or before January 1st, 2009.

Your home must be your primary residence. That means it can’t be owned by an investor or used as a secondary/vacation home. The plan also puts a price cap on loans for single-family homes. Homes valued over $759,750 will not be eligible for a loan modification under the Making Home Affordable program.

How it works...

The program is voluntary, so we can’t be sure which lenders will participate, and when. But the government is determined on having most, if not all, of the major lenders take part. Several incentives have been put in place to make loan modification a more attractive option than foreclosure for both the homeowner and the lender.

Basically, the government has offered to split the modification costs with the banks, thereby reducing losses for both parties. Lenders must first agree to cut mortgage payments to meet a 38% DTI, then the government will pay part of the cost to bring it down to a more comfortable 31%.

Servicers also get cash incentives for granting loan modifications. Each modification will earn them $1,000, as well as a $1,000 yearly payout for three years as long as the homeowner stays current. As a borrower, you also get up to $1,000 paid off your principal every year for five years as an incentive for staying on track with your monthly payments. The incentive program starts three months after the new loan terms take effect after your modification.

When should you sign up?

The simple answer is now, while there’s still something in it for you. Even if lenders don’t participate, or if you don’t meet the requirements for state-subsidized modifications, it may still be worth a try! Qualifications aside, most lenders would be more willing to work out better loan terms than seize your home. This is because they lose as much in a foreclosure as you do, so except in rare cases, it usually makes more sense for them to modify your loan than to foreclose.

This is also true for loans owned by other investors who appear to be owned by servicers. If you’re currently in a specific contract with an investor, the guidelines may not directly apply to you—but that doesn’t mean loan modification isn’t an option. Again, if loan modification makes more financial sense, lenders would be more than willing to meet you halfway.

What you need...

Since most borrower information will already be filed with lenders and servicers, paperwork shouldn’t be much of a problem. With these new guidelines, the process should be a lot smoother than last year, when thousands of homeowners were scrambling to get loan modification deals.

Lenders will need to see your latest tax return and at least two pay stubs to prove that you can handle the reworked costs. As with traditional loan modification, a hardship letter (in this case called the “affidavit of financial hardship”) is also required and will be verified by proper authorities. A financial analysis will be completed and reviewed by us before we present the Loan Modification request to your mortgage company. HomeSave123 will then submit your requested loan modification and handle the negotiations on your behal. Nothing will be finalized without you knowing about it.

Homeowners in bankruptcy...

Bankruptcy and active mortgage litigations shouldn't keep most borrowers from qualifying for the program. Filing for Chapter 13 bankruptcy may allow you to get a principal reduction of your mortgage in court, as long as you can prove you’ve tried other options beforehand. If you’re currently in litigation over your mortgage, you can get it modified without losing your legal rights.

Getting the best results...

Working with HomeSave123, a third-party loan modification firm, may increase your potential chances of getting more out of your loan modification, with more favorable terms for you, and timely completion. As loan modification requests pour in, lenders will be overloaded, and homeowners may be declined even for the most straightforward applications. We can help you explore other options, such as bankruptcy and short sales, or other strategies for settling a loan modification with the best results. Some states require certain loan modification license requirements. If we are not licensed in your State, this offer of assistance is void in your area. The Home Affordable Loan Modification may be a one-time plan of action. Don't blow it, your home is too important. Seek help, either directly from the lender, other community credit counselors, or someone experienced in financial transactions like ourself. We have been providing financial assistance to borrowers for 1o+ years. We would like to help you too, if we can. There are a lot of scams out there, be careful in your choice, ask questions. Email your questions to HomeSave123@gmail.com or call 800-811-1929.

WATCH OUT FOR THE SCAMS---

Beware of anyone who says then can "save" your home if you sign or transfer over the deed to your home. Do not sign over the deed to your property to any organization or individual unless you are working directly with your lender to forgive your debt to that Lender. And before you do, first seek legal advise.

Never submit your mortgage payments to anyone other than your own mortgage company/servicer.

Do not believe anyone that tells you that you can get "cash out" with the loan modification. That is not true.

Do not sign a power of attorney over to anyone to control your property,

Do not believe your Lender/servicer's staff, if they say they can only help you if you are behind in your mortgage. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. There are many hardship reasons, such as significant reduction in income. Again, you do not have to be currently behind in your payments for help. If you are told that by your Lender, they are not correct.

Stay away from any individual or organization that trys to charge you a high fee. If someone tells you they charge $2000,$3,000 or we seen up to $5,000 or more, walk away. Seek help from others, or do it yourself. We Offer one of the industry's lowest service retainer fee at $1295 with our 3 installment payment plan or, with a single pay discounted price of $995 (and save $300).  So take the stress off, let us deal with your lender and their phone calls, that only is worth it. You can pay by check, or thru your paypal using mastercard, visa, or discover. Let's get started with completing the questionaire so we can do a FREE initial consultation, to see if you can benefit from our services.

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