Friday, January 20, 2012

Mortgage Myths

In today’s housing market it can be very difficult to tell fact from fiction when it comes to understanding the market’s rules and regulations. For homeowners, misinformation can be the difference between qualifying for a home loan and being denied. Knowledge is foreclosure prevention. So let’s correct some common mortgage misconceptions.
 Myth One: You have to be in default on your mortgage to meet the requirements for help
• This is 100% NOT true. Purposefully falling behind on your mortgage payments can flop on you for two reasons. First off, if you fail to pay 60 days past due, your bank is forced to run your modification through a net present value test. Meaning your lender would lose less by foreclosing than by modifying your loan, not qualifying for a modification. Secondly, if you don’t qualify for your modification, you may have put some serious setbacks in your credit score.
Myth Two: If you are unemployed you do not qualify for a loan modification
• False. The Home Affordable Modification Program (HAMP) guidelines states, “If the borrower receives public assistance or collects unemployment: Acceptable documentation includes letters, exhibits or a benefits statement from the provider that states the amount, frequency, and duration of the benefit. The servicer must be determining that the income will continue for at least nine months.” In addition, if you are getting unemployment paybacks, the bank can work them into your case when determining your ability to make a modified payment.
 Myth Three: Mortgage companies can guarantee getting your principal balance reduced
 • While that would be great, it is highly unlikely. Companies all over the US are boasting promises of principal write-downs to get consumers to sign up. Unfortunately, reality is that very few loan modifications involve principal reductions. Lenders are not paid by the government for write-downs. There are a lot of scammers that may “guarantee” to get your loan balance written down, however this is NOT true. If every company could guarantee, this practice would crush the lending industry.
When it comes down to it the more you know, the better you can protect yourself and your home. If you or someone you know may be facing foreclosure, please contact us today. The sooner you address the problem, the faster you will see results.

Thursday, January 12, 2012

A Few Tips on How to Save on Closing Costs

When purchasing big-ticket items such as houses and cars, it is natural to do research and shop around for the best deal. However, many Americans tend to forget to use that same mentality when it comes to purchasing a mortgage loan.
The attorneys at The Mortgage Law Group want to remind consumers that entering into a mortgage agreement is one of the most important, if not the most important, part of buying a home. Consumers who take the process too lightly and go with the first lender they talk to can end up over paying thousands of dollars in unnecessary and/or hidden closing costs. In order to be a wise borrower, there are a few crucial aspects consumers should keep in mind.
First, one  way to try to avoid costly closing fees is to petition the seller to cover the closing costs, a practice that typically occurs when the real estate market is favored toward buyers. However, if that is not an option, there are a few other things consumers can do to get the best possible deal on their mortgage.
It is important to compare, shop and do research on different lenders before applying for any type of loan. Select a handful of lenders and then ask them to provide a list of charges associated with closing costs on a mortgage.  If a lender refuses to provide a list of charges before the application is turned in, move on to the next one. A reliable lender will always provide a list of fees when asked.
After receiving the list of charges from the lenders, be sure to review each fee separately. Many times the fees can be disguised under misleading titles, which can lead to being charged multiple times for the same service. Also, be cautious of “junk fees,” which are often extraneously tacked on to closing costs simply to earn lenders an extra buck.
Some examples of “junk fees” can include: inspection fees, processing fees, warehousing fees, and underwriting fees.  Many of these charges should already be included in the origination fee, or the fee lenders charge upfront to process a new loan, and the others are simply the lenders responsibility as a business.  Also keep in mind that even if some of the fees cannot be avoided, it may be possible to negotiate them to a lower amount.
Most importantly, remember that as a consumer you always have a choice on which lender to go with. If you are not satisfied with the closing costs and conditions of a potential mortgage, ask for an adjustment. If your lender refuses to come to a reasonable mortgage agreement, find one that will.

Tuesday, January 3, 2012

Know Your Options to Foreclosure

Is life getting in the way? Do you find yourself unable to pay your mortgage on time or at all? Are you compelled to stick your head in the ground, well you’re not alone. Thousands of Americans are currently in the same fight to save their homes. It’s crucial to know that hiding from your problems will only worsen the reality of it.

If you are a struggling homeowner that is feeling overwhelmed, know that you have alternative options to foreclosure. Knowing and understanding all your options will help you make the best decision for your case and in the long run you and your family.

Route One: Short Sale
Option one involves the lender taking the less amount of money than what’s owed on their property once sold. Typically in short sales, lenders offer incentives to the sellers in effort to avoid the cost of foreclosure. These incentives are often called relocation packages which are meant to help the former homeowner leave their current residence.

There are programs and incentives for banks to do the short sale route, such as the Home Affordable Foreclosure Alternative (HAFA) program. Unfortunately, banks are taking months to finish these deals and in some cases your lender may refuse to follow through. Short sale is a good option as long as you are aware that they are not easy as they sound.

Route Two: Deed-in-Lieu
Option two is not mandatory for banks but the lender can accept the deed to your house in lieu of the mortgage payments, this is called Deed-in-Lieu or DIL, for short. The banks can deny your DIL request and foreclose if they choose. However, lenders often accept this option because it is a fastest, easiest and often times cheapest way to get you out of your house.

Route Three: Loan Modification
Option three has been infamous for being next to impossible to get, with a lieu of demands of document completion, initial evaluation process, and a slim chance of obtaining the actual modification; it could very well be the best option outside of foreclosure.

The positives in a loan modification are the lender agreeing to change your loans terms so that you as the borrower can continue to make payments on your mortgage. The loan changes to fit your financial specifications and is meant to be long-term if not a permanent solution. Whether that change means a lowered or fixed interest rate, lower monthly payments, and in rare instances the lender lowering the amount owed in the principles of forgiveness.

It’s vital to seek professional advice on your situation before making a decision, note that before qualifying for a loan modification you must already be behind on your loan. However, remember that is not advised to fall behind on your payments, and this report is for educational purposes only! It is un-ethical for anyone to advise you to do so.

So as you continue on your journey for keeping your home, you can see there are several options to consider before you go into foreclosure. Please consult the appropriate professionals before making your decision. Remember if one option isn’t for you, you have others to look into.
For loan modification help, call The Mortgage Law Group now: 888-591-6555