November 10, 2011
While I’m not so sure I agree with the word “victims” in this article title I still think it holds some merit and deserves to be shared. So many people have either already been kicked out of their homes or are in the process of being given the boot. I agree that improper processes need to be identified and addressed.
Here is the article from yesterday’s NotaryBulletin presented by the National Notary Association.
In what is being considered the first meaningful response to the foreclosure crisis, the federal government has ordered 14 mortgage lenders involved in the “robo-signing” scandal to send letters to 4.3 million consumers who may have been victimized by foreclosure errors and misconduct, paving the way for a massive number of individual case reviews and potential compensation.
November 30, 2009
November 22, 2009
November 10, 2009
February 16, 2009
I just finished reading a Reuters article that said home foreclosures for January of this year were up 57% over January of 2007.
I guess it takes numbers like that do really drive home what’s happening in this country. I knew foreclosures were way up as a result of the subprime mortgage crisis that started last year, but that 57% increase still shocks me.
So lately I’ve been publishing a series of articles to help homeowners avoid home foreclosure altogether. In this article, I’ll explain the two paths a homeowner can take based on his or her financial situation: (1) the “get back on track” option and (2) the “sell the home quickly” option.
Essentially, these two options classify homeowners into one of two camps:
1. Those having temporary financial problems who could still keep the house.
2. Those having long-term problems who can no longer afford the home, period.
Getting Back On Track to Keep the Home
In the first camp, we have those homeowners who have had only temporary financial problems, and expect to get caught up on their mortgage payments. These people can work with their lenders to come up with repayment or reinstatement plans in order to avoid foreclosure while keeping the home.
Generally speaking, you have two options to get caught up on your missed mortgage payments. You can pay back the missed payments as a lump sum (reinstatement), or you can spread that amount over future mortgage payments (repayment plan). These are the two most common options when the homeowner’s financial problems are only temporary.
Selling the Home to Avoid Foreclosure
In the second camp are those homeowners whose financial problems are more long-term in nature. In other words, these homeowners simply cannot afford their homes anymore. These folks can avoid home foreclosure by selling the home, possibly through the real estate short sale technique we covered last week.
This is where the real estate short sale comes into the picture. A short sale is a technique through which the homeowner sells the home for less than the amount owed to the lender, in order to sell the home quickly.
With this technique for avoiding home foreclosure, speed is of the essence. That’s why mortgage lender often allow homeowners to pursue a short sale in the first place … to sell the home quickly and to get the non-performing loan off their books. This is the closest thing to a “win-win” scenario the lender and homeowner will find when foreclosure is imminent.
Obviously there is a lot more to learn about the two primary paths outlined above, and the multiple options that each path presents. My point with this article is simply to help you realize that you do have options when trying to avoid a property foreclosure, and knowing what those options are is the first step to success!
About the Author: Brandon Cornett publishes the Home Buying Institute, a website full of advice on mortgages loans, house hunting, credit scores and more. Learn more or contact the author by visiting www.homebuyinginstitute.com
February 2, 2009
by Brandon Cornett
You’ve probably heard a lot about mortgage refinancing on the news lately. In fact, if you’re a homeowner you’ve probably received a few offers in the mail from lenders as well.
The reason you hear so much about this topic lately has a lot to do with the mortgage / foreclosure crisis we are seeing right now. Many homeowners are in situations similar to those they have heard about on the news, having an adjustable rate mortgage set to adjust in the near future … and facing a possible spike in mortgage payments as a result. So, these homeowners naturally look into refinancing as a way to avoid such payment hikes.
The question is — when should you refinance your mortgage loan, and when should you avoid it? This question is high on the list of many homeowners, so I will do my best to shed some light on the subject.
When Refinancing Makes Sense
There are some general rules you can use to determine whether or not a refi makes sense for your situation. Bear in mind, however, that these are just general rules of thumb. So don’t make any financial decisions based on these “rules” alone. Do some further research into the subject and seek the advice of a financial professional.
With that being said, here’s a basic guide on when to refinance a home loan, from a financial standpoint:
Switching from an ARM to a fixed rate — This is a common reason why homeowners pursue a refi in the first place, especially with all the negative press the adjustable rate mortgage (ARM) loan has been getting lately. Eventually, an ARM will adjust to a higher interest rate that catches a lot of homeowners off guard. So many people use refinancing as a way to move to a more predictable fixed-rate mortgage.
Capitalizing on Lower Interest Rates — This is another common reason why people refinance their home loans. When the rates are low, homeowners in certain situations can refi to a lower interest rate, and thus reduce their overall monthly mortgage payment.
The goal of both of these strategies is the same … to either (A) lower the interest rate on the loan, or (B) prevent the interest rate from rising through a mortgage adjustment. In both cases, the goal is to pay less money each month on the mortgage payment.
It’s Not Always a Good Idea
Now is a good time to point out that a mortgage refi is not always a good idea. And I can illustrate this through another rule of thumb: If the money you pay to refinance the loan (closing costs) exceeds the amount of money you save over the term of the new loan (lower interest rates), then it doesn’t make sense to pursue it. After all, nobody wants to pay more than they save in a financial transaction.
The key here is to do the proper research to find out what you would pay, as well as what you would save by refinancing. Once you’ve determined those numbers, you will have a much easier time deciding if a refi is right for you.
About the Author: Brandon Cornett publishes a blog about refinancing success as well as several other real estate websites. Visit the author online at http://www.mortgage-refinance-advice.com/blog
January 1, 2009
Plenty of borrowers think it wise to avoid calls from their lender when they start to fall behind on their monthly mortgage payments. Nothing could be further from the truth and this decision could very well be laying the foundation for an eventual foreclosure. It makes much more sense to have those conversations, explain your position, and then see what sort of resolution your bank offers.
Many home owners that are in trouble with their mortgages don’t even realize how common their situation is today. If they only knew how many other people are in the same boat they might not feel so embarrassed and might actually have a chance of solving the problem.
Be proactive. Call your lender.
Give your bank a call or visit their Internet home page. You might be surprised how many lenders have solutions right on the home page. This should tell you that financial troubles are obviously quite common in 2008 and 2009. Why else would lenders place links right on the home page offering loan modifications and short sale assistance?
What is a loan modification?
A loan modification is simply where your bank adjusts the terms of your loan to make it more affordable to you, the borrower. Most loan modifications involve a simple adjustment of the interest rate on your existing loan from a higher rate to a lower rate, but the loan modification doesn’t address an even bigger concern. If you owe $180,000 and your home is now only worth $90,000 a loan modification isn’t going to help with this $90,000 difference. Sure, it will lower your monthly payments, but the $90,000 difference will stay with you for years and years while the market continues to decline, eventually stabilizes, and then finally climbs slowly back to the $180,000 price level. A short sale might make more sense.
If dealing with your bank scares the heck out of you contact a qualified Realtor to handle the short sale process. And a short sale might be your best option. A short sale is where you sell your home for less than you owe the bank – with your banks approval, naturally. It is a tricky, complicated and stressful experience for most borrowers so hiring a Realtor makes sense.
March 11, 2008
Lenders have become much more willing to modify the terms of mortgages recently. But is a loan modification going to solve your financial problems in the long term? Probably not. While lowering your monthly payment is appealing (at first glace) it is not enough to address the fact that your home is no longer worth what it was a few years ago. So your bank is willing to knock your interest down from 7.85% to 5.85%. Good. But what about the $85,000 in equity that has evaporated into thin air? Are they going to lower your principle balance? This is the big question and the one you should be asking.
If your lender will lower your interest rate without charging you a fee then you have no reason not to jump on that opportunity. Do the loan modification immediately. But don’t assume that a lower interest rate is a magical solution to your mortgage crisis. It is only one piece of the pie. The real solution is a principle reduction.