Loan Modification Guide by HomeRecovery.org
What is a loan modification?
Loan Modification is the process in which your mortgage note is modified without actually refinancing. This process has become the lifeline for millions of homeowners facing home foreclosure. Loan Modification may benefit homeowners by lowering payments, rates & even principal balance. Knowing where to go, who to trust and what programs actually work is the key to getting a successful loan modification.
Getting the right loan modification is important because many homeowners that are approved for a loan modification end up facing mortgage default for a second time. Why? Usually because the mortgage assistance program does not provide a long term mortgage solution. Homeowners can avoid this by doing their research and exploring long term solutions.
How can a loan modification help me?
1. Your mortgage payment may be reduced to an amount you can afford.
2. Late payments & fees may be reduced, restructured or eliminated.
3. Your mortgage rate may be lowered.
4. Principal balance may be reduced.
5. You can prevent foreclosure & get back on track.
Who qualifies for a loan modification?
Qualifying for a loan modification is not as easy as you would think. That is the purpose of the HelpingHomeowners.org website. There are different requirements for loan modification programs you may find online. Qualifications are based on your income, current payment, ability to pay, employment status and other factors. Homeowners that have experienced a recent hardship may qualify.
What is a financial hardship?
A financial hardship is your inability to pay or afford your current mortgage. The cause of your financial hardship must be supported and documented to qualify for most loan modification programs. Here is a list of common hardships experienced by homeowners in distress.
1. Job Loss / Loss of Income
2. Health Issues
3. Divorce
4. Mortgage Rate Adjustment
5. Victim of Predatory Lending
6. Decrease in Home Value
7. Death
8. Job Relocation
9. Failed Business
Where do I go for help?
There are many programs available through the government, non-profits, attorneys and loan modification companies. Government programs have been critized for being slow and failing to help homeowners while loan modification companies across the nation have taken advantage of homeowners in distress.
To assure you get the right answers please contact our experts for a free loan modification consultation.
What documention do you need?
A loan modification is not a refinance. You do not need a new appraisal, title and many other key components of a refinance. You may need documents such as your current mortgage statement, income documents and information to support your hardship. When submitting your loan modification package you will need to include a hardship letter, which must be written and supported correctly or your loan modification may be denied.
Eliminating Debt with USDebtAid.org
Acquiring too much debt can put a major strain on a household. To eliminate debt, many people consider bankruptcy. With the new bankruptcy laws, it has become difficult for some people to eliminate debt. However, many will continue to qualify for bankruptcy protection. The effects of bankruptcy are long term.
Before considering bankruptcy, it helps to explore solutions to debt elimination. Here are three tips that can help reduce debts.
Limit Credit Card Use and Pay More than Minimums
People file bankruptcy with varying credit amounts. Some have acquired over $10,000 of credit card debt, whereas others only have about $2,000. Individuals with small debts can usually payoff the balances without bankruptcy. However, these persons must be willing to make sacrifices.
If attempting to eliminate debt, stop using the credit card. Paying only the monthly minimum, and then going on a shopping spree defeats the purpose. Before you can successfully eliminate credit card debts, you must commit to using cash for all purchases. Additionally, the majority of minimum payments barely reduce the finance fees. To notice a significant reduction, endeavor to pay the minimum payment, plus an additional $50 - $100.
Negotiate a Lower Interest Rate
If you have maintained a good payment history with a credit card company, attempt to negotiate a lower interest rate. When contacting the credit card company, highlight your history with the company such as length of credit account, payment history, etc. If your credit is good, the company may consider a reduction. Before approving the request, you must consent to a credit check.
In addition to evaluating your history with the company, they will also assess whether you maintain a good payment record with other creditors. If your credit score is low, it may require the help of a debt consolidation agency to convince creditors to lower interest rates.
Once your credit card interest rate is lowered, you pay less finance fees. Thus, a larger portion of your monthly payments will help reduce the outstanding balance.
Consolidate Debts with a Home Equity Loan or Refinancing
Owning a home provides a huge advantage. Homes increase in values, thus they gain equity. As a homeowner you have the option of tapping into your home’s equity. Through a home equity loan or refinancing, you have the chance to get hold of a lump sum of money that can be used for different purposes. One such purpose includes debt consolidation.
For information on debt settlement, debt relief and credit card debt programs please visit http://www.USDebtAid.org
Debt Leads
Debt Leads are in high demand do to many financial related professionals getting into the industry along with the growth of companies currently in the debt settlement business.
Our debt leads are generated in house and are all backed by our debt lead guarantee. That guarantee assures you never pay for a bad debt lead. Debt leads are generated via our consumer websites by driving unique traffic via search and email marketing.
I know you want to hear about debt lead pricing. The number one thing that most of our clients jump right to, but there is a lot behind debt lead pricing. The problem with most transactions between debt lead buyers and sellers is that sellers are too quick to drop right down to the “better pricing” that you want. When in reality it only forces the debt lead seller to lie to you. What do we mean lie to you?
Like we said there is a lot behind pricing. A real debt lead aggregator can not generate a quality debt lead below a certain price point. Dropping prices to make deals happen forces the seller to take their advertised “sold 3 times” debt lead and sell it four or even five times. They have to make their money somehow, do you really think they are happy with a $5 dollar profit per debt lead. I don’t think so.
A good debt lead is getting harder and harder to generate. Of course we can flood the gates with leads of consumers over $10,000 in debt. The trick is getting qualified leads that are truly interested in debt relief. This is achieved by presenting the right marketing message to someone researching or searching for debt relief online. We have his part down pat, to find out more just call or email us.
New protections from foreclosure in NC
AG Cooper backed new law to save homes and communities, stop harassment from debt buyers
Raleigh: North Carolinians who face the loss of their homes through foreclosure or harassment from unfair debt collectors now have new protections under the law, Attorney General Roy Cooper said Thursday.
The Consumer Economic Protection Act of 2009 (CEPA), which Cooper worked with state legislators to enact, will ensure that homeowners and their mortgage lenders have the chance to voluntarily resolve foreclosures. The new law, which starts today, will also protect consumers from an aggressive new breed of debt collectors called debt buyers.
“Losing a home should be a last resort because foreclosures hurt thw whole economy,” Cooper said. “With this new law, homeowners and lenders get more time to rework mortgages so that more families can afford to stay in their homes.”
Court records show that nearly 40,000 North Carolina homes have gone into foreclosure so far in 2009. According to the Center for Responsible Lending, more than 2.2 million North Carolina homeowners will see their property values decline over the next three years because of foreclosures in their neighborhood. Foreclosures hurt lenders as well, costing them an estimated 40 percent of the loan value.
Not all foreclosures can be prevented, but some homeowners are able to work out repayment plans and loan modifications with their mortgage lender or servicer. CEPA requires lenders to explain in detail their efforts to resolve delinquent home loans without resorting to foreclosure. Clerks of Court presiding over a foreclosure hearing now have the authority to ask what steps have been taken to prevent foreclosure and to continue the hearing for up to 60 days to allow homeowners and lenders more time to negotiate a solution.
To give homeowners a fair opportunity to appeal foreclosure orders, CEPA also standardizes the amount of bond required at one percent of the balance due on the loan. Previously, some homeowners were asked to put up a bond worth the entire value of the loan balance in order to be able to appeal their foreclosure.
For free counseling on options to avoid foreclosure, North Carolina homeowners can call a toll-free hotline set up by the NC Commissioner of Banks’ Office. The hotline, 1-866-234-4857, is available from 8:00 AM to 9:00 PM Monday through Friday, and from 8:00 AM to 5:00 PM on Saturdays.
The new law also protects North Carolina consumers from unfair debt collection practices by debt buyers, a new type of debt collector that pursues old debts even when the debts have already been settled or paid.
For example, a debt buyer sued a 65-year-old North Carolina woman, producing billing statements supposedly sent to her at an address in Greensboro. But the consumer, who has lived in the same house for more than 30 years, had never lived in Greensboro.
In another case, a 73-year-old North Carolinian received daily calls from a debt buyer, telling her that she would never be able to buy anything if she didn’t pay them. The account the debt buyer was trying to collect was opened in Ohio, and the woman had never set foot in Ohio. A criminal had stolen her identity years before and been prosecuted and convicted for it, but the debt buyer still filed suit against her over the debt that wasn’t hers.
Under the new law, debt buyers must now prove that they have the right to enforce the debt and be able to verify the amount owed. Debt buyers are also prohibited from filing or threatening to file suit when barred by the statute of limitations.
“Whether you’re a senior on a fixed income or a working family trying to make ends meet, the last thing you need is someone hounding you to pay a debt that you don’t really owe,” Cooper said.
A provision in the original legislation that would have clarified the Attorney General’s Office’s enforcement over investment scams involving securities will be pursued in the next legislative session.
Finance and Credit Companies are Changing
The last 2 years for finance and credit companies has been nothing short of a disaster. Is it over? Depends on who you ask. This uncertainty has lead many big players in the finance sector to adjust, add products and tighten their belts while the economy settles. What will come out of these troubling times is unknown. One thing for sure is those that survive are going to be companies with deep pockets or innovative thinkers at the top of their team.
A new product that evolved from this disaster is loan modification. Well loan modification has been around for many years, but let’s face it this service has over shadowed mortgage lending for the last 2 years. You can Google the term “loan modification” and find results ranging from loan modification scams, criminal convictions and government loan modification programs that have till this point seemed to have little affect on foreclosure numbers. Government programs have come up short where private loan modification companies have helped and profited from this disaster. Where is the loan modification industry headed and how long does it have left?
The reality is that foreclosures are not going anywhere for 3 to 5 more years. The first wave of nationwide foreclosures hit hard due to 2 and 3 year ARM mortgage loans that were sold to sub prime borrowers at a furious pace. Now job loss seems to be the main factor for foreclosures across the nation. Foreclosures are expected to continue at a steady pace as 5 year ARM, 7 year ARM and Alt-A mortgage loans begin to adjust. A large amount of these mortgage loans were given based on stated income to self employed borrowers that are now out of work or affected by serious income losses.
These homeowners are going to need help saving their home from foreclosure. Loan modification companies are going to still be a viable option for desperate homeowners. The loan modification companies that are able to deal with peaks and valleys in demand and add other services to their portfolio are going to be able to ride the foreclosure train until the end. Currently loan modification companies are getting back to providing mortgage loans and adding on services such as debt settlement or credit repair.
If you are a loan modification, debt settlement, mortgage or credit repair company then your survival is based on adapting to what opportunities the economy provides. A solid marketing plan, quality debt leads, loan modification leads, mortgage leads and credit repair leads will also play a big role in your outcome.
Stay focused, become diverse and you will be on top when the economy is back to “normal”. We all hope that happens soon.
Foreclosure Debt
Foreclosure numbers continue to rise due mainly to unemployment numbers. As the economy is seeing signs of improvement the unemployment rate is still at record highs. Until this is corrected home foreclosures are going to remain a major issue for the US economy. There are man things you can do during these tough times to avoid foreclosure.
There are some myths about foreclosure, bankruptcy and credit. If you don’t have the facts, it’s impossible to make the best decisions. Take time to learn about foreclosure, the potential impact on your credit, and some steps you can take if you’re facing foreclosure.
Many people think that once they’ve settled a debt - no matter how that comes about - the impact on the credit report is negated. That’s not true and your decisions will remain a part of your credit history, probably for seven years. That means that your decision to enter foreclosure will be there for every potential creditor for many years, impacting your ability to obtain credit.
Foreclosure is only slightly better than bankruptcy. Some people call bankruptcy a “clean slate.” In truth, a bankruptcy will likely remain part of your credit score for even longer - usually ten years.
Foreclosure situations don’t happen overnight. Most people struggle for months (or longer) before the final straw. Often, payments are a little late at first. As the mountain of debt grows, payments are later. Late charges rack up, making it more difficult to catch up. One of the most important steps you can take to avoid foreclosure happens now - well before you’ve even considered foreclosure as a possibility.
Start by making every attempt to make your payments on time, every time. If you see that a payment is going to be late, contact your finance company. Though it’s usually tempting to avoid the phone calls that accompany late payments, be proactive. Let the company know that you’re having a problem and look for some options. Some finance companies will allow you to pay interest only on a payment, tacking the principle onto the end of the note. This isn’t a long-term solution that should be taken at the least sign of a problem, but could be the answer to getting your finances back on target.
How are Credit Scores Calculated?
Your credit score determines if you will qualify for financing, the interest rate you will pay for mortgages and loans, the cost of your insurance premiums, and can even affect your chances of securing employment. Because credit scores are so important, many people wonder exactly how credit reporting agencies calculate a person’s credit score.
Unfortunately, the exact formula used to calculate a credit score remains a mystery to consumers, and many people suspect it is actually a mystery to the credit reporting agencies as well. While it is impossible to know the mathematical formula they use to calculate credit scores, we do know the various factors credit reporting agencies use to calculate a person’s credit.
Credit scores are calculated by analyzing a person’s payment history, the amount of credit a person has been extended, the ratio of outstanding debt to available credit, the length of time that credit accounts have been open, and any unpaid or delinquent accounts.
Payment history is a straightforward part of the credit score puzzle, with consistently on-time payment increasing credit scores and late payments decreasing them.
The amount of credit you have will also help or hurt your credit score. The more credit you have, the higher your credit score will be, unless you have a high debt to credit ratio. If the balance of your loans or credit cards is a high or even moderate percentage of your total available credit, it will bring your credit score down.
The longer your credit accounts have been established and in good standing, the higher your credit score will be. Too many new credit accounts can lower your credit score, so opening new credit cards or taking out new loans just before you want to apply for financing such as a mortgage or car loan is not usually a good idea.
Perhaps the most damaging factor for credit scores are accounts that are not in good standing, because they are unpaid, delinquent, or late. The best way to raise and maintain a good credit score is to always make credit payments on time, keep a low debt to credit ratio, do not open too many new accounts at one time, and make sure no bills become delinquent.