Top Ten Underwater States

Does owing more on your home than the house is actually worth sound familiar? As home prices continue to slide more and more homeowners find themselves underwater. After last year’s foreclosure activity it is no surprise that so many homes are in trouble. 

According to a report by Corelogic, the number of underwater mortgages as a percentage of all mortgaged homes in the US rose in the fourth quarter of last year. Corelogic’s Negative Equity report suggests that mortgages 11.1 million homes out of the 48.7 million mortgaged homes are underwater. Based on this report we were able to identify the ten states with the top percentage of underwater homes. 

Some of the states on the list had been dealing with economic problems long before the current recession. States like Rhode Island and Michigan have been dealing with long term industrial declines for quite some time, therefore, drops for their home values are only accelerated by recession that the rest of the country went through. 

For the majority of the states on the list below, a decline in the housing market is the sole reason homeowners find themselves owing more than their house is worth. Check out the 10 states depressed by underwater mortgages:

10. Virginia

Pct. homes underwater: 23%

Total property value: $428.46 billion

Mortgage debt outstanding: $307.48 billion

Median home value drop from peak: 16.7% (21st-biggest decline)

Homes in foreclosure or 90+ days delinquent: 4.1% (ninth-smallest percentage)

9. Ohio

Pct. homes underwater: 23.9%

Total property value: $310.62 billion

Mortgage debt outstanding: $238.20 billion

Median home value drop from peak: 14.4% (23rd-biggest decline)

Homes in foreclosure or 90+ days delinquent: 6.9% (14th-largest percentage)

8. Maryland

Pct. homes underwater: 24.3%

Total property value: $418.34 billion

Mortgage debt outstanding: $296.81 billion

Median home value drop from peak: 23.7% (12th-biggest decline)

Homes in foreclosure or 90+ days delinquent: 8.0% (tied for fifth-largest percentage)

7. Idaho

Pct. homes underwater: 25.0%

Total property value: $49.76 billion

Mortgage debt outstanding: $36.58 billion

Median home value drop from peak: 29.3% (sixth-biggest decline)

Homes in foreclosure or 90+ days delinquent: 5.2% (20th-smallest percentage)

6. California

Pct. homes underwater: 29.9%

Total property value: $2.73 trillion

Mortgage debt outstanding: $1.94 trillion

Median home value drop from peak: 46.7% (third-biggest decline)

Homes in foreclosure or 90+ days delinquent: 7.0% (12th-largest percentage)

5. Georgia

Pct. homes underwater: 33.0%

Total property value: $306.59 billion

Mortgage debt outstanding: $252.81 billion

Median home value drop from peak: 26% (10th-biggest decline)

Homes in foreclosure or 90+ days delinquent: 8.0% (tied for fifth-largest percentage)

4. Michigan

Pct. homes underwater: 34.7%

Total property value: $198.05 billion

Mortgage debt outstanding: $165.45 billion

Median home value drop from peak: 30.1% (fifth-biggest decline)

Homes in foreclosure or 90+ days delinquent: 6.5% (19th-largest percentage)

3. Florida

Pct. homes underwater: 44.2%

Total property value: $809.95 billion

Mortgage debt outstanding: $706.00 billion

Median home value drop from peak: 44.8% (fourth-biggest decline)

Homes in foreclosure or 90+ days delinquent: 17.4% (the largest percentage)

2. Arizona

Pct. homes underwater: 48.3%

Total property value: $243.02 billion

Mortgage debt outstanding: $226.22 billion

Median home value drop from peak: 47.9% (second-biggest decline)

Homes in foreclosure or 90+ days delinquent: 7.1% (11th-largest percentage)

1. Nevada

Pct. homes underwater: 61.1%

Total property value: $96.57 billion

Mortgage debt outstanding: $109.94 billion

Median home value drop from peak: 60% (the biggest decline)

Homes in foreclosure or 90+ days delinquent: 13.4% (second-largest percentage)

As 2011 wrapped up, 13.4% of mortgages are either 90 days delinquent or in the foreclosure process. So now that 2012 is upon us, let’s see what numbers will change. What do you predict?

Tips to Lower the Price of Your Property Tax

For anyone struggling to make their monthly mortgage payments, saving money on other bills can be crucial when it comes to keeping their homes. One very common, yet fairly unknown way to achieve that savings is by lowering your property tax.

Property taxes are often set at a fixed amount when the property is purchased; however social, economic and environmental changes in the neighborhood can cause the taxes to fluctuate.  In order to see that change reflected in your property tax payment, homeowners must file an appeal with their state.

The following are some tips to help you through the tax appeal process:

1. Keep your payments up-to-date.
Before even beginning the process make sure you check that your current property taxes are paid up. Most property tax assessors will not even consider an appeal if the homeowner has past-due payments.

2. File on time.
Most states have strict guidelines for when tax appeals can be filed. Be sure to check your states laws to make sure yours is filed on time, if not the appeal may be thrown out.

3. Be prepared for a battle.
With sweeping budget cuts and rampant downsizing affecting all areas of government, giving up income collected from taxes is the last thing your state wants to do. In other words, be prepared to fight for the fair taxes you deserve and be sure to provide substantial evidence as to why they should be lowered.

4. Appeal the appeal.
If you receive an unfavorable reassessment of your property taxes, it is possible to appeal the review. However, because this process can be somewhat complex, it is really only recommended when the newly appraised value of the property is significantly higher than the fair market amount. 

Even if you’re currently not financially distressed, you may want to consider lowering your property tax anyway. The money you save could be your lifeline in the future. For more information on restructuring your finances and other ways to help you keep your home, please call The Mortgage Law Group today. 

Tips on Getting Your Underwater Home Sold

There’s no doubt about it, since the burst of the housing bubble homeowners looking to sell their properties have faced a constant struggle. With prices at an all-time low, it is estimated that nearly one out of five American homes is underwater. Here are some tips to get above water and quickly sell your home at the best possible price:

1. Appraise the home
The first thing you should do before putting your home on the market is to have its value determined by an appraiser. By having the home appraised, sellers can get a realistic idea of what price a bank would value the home at before entering into a sale, saving them both time and money.

2. Conserve utilities
Cutting back on utility usage while your house is on the market is an easy way to make the home more attractive to potential buyers. Many times buyers will ask to look at the home’s utility bills to determine if they can afford the “entire package,” and in this economy having lower bills can definitely tip a sale in your favor.

3. Conduct your own inspection
Many buyers will want to have the home inspected before settling on a sale. Having your own inspection done allows you to know what red-flags the buyer may use to negotiate the home’s price and also gives you a chance to get them fixed for a lower cost beforehand.

4. Rev up your curb appeal
The first thing a buyer sees when checking out a new house is the view from the street, so make sure to pay extra special attention to your home’s outer appearance. Take a walk around your block and see what other homes look like on the outside, then try to make yours stand out. Revving up your curb appeal can be as simple as cleaning out your gutters or edging your lawn, both which can be done for practically next to nothing.

Following these tips could be the difference between selling your home fast or watching it flounder. Keep in mind that today’s market is unpredictable and even the most attractive homes sit untouched. If you’ve exhausted all of your resources to sell your underwater home, it may be time to consider other options such as a short sale or a deed-in-lieu arrangement. In either case, always be sure to educate yourself first before making any major decisions as it will save you time and money in the long run.

How Does A Mortgage Modification Work?

It’s no surprise that a majority of Americans have gone through ups and downs when it comes to their financial situation.  Some have lost jobs.  Some have suffered depressed home values, an unplanned medical expense, even an unfortunate death of a spouse that could have left an unpaid mortgage.

Fortunately in the United States struggling homeowners may qualify for one of the several mortgage modification programs available to help them pay off their mortgage and save their home.   So if you can demonstrate the factors (detailed below) and continue to stay current on your loan, your lender could reduce your payments, and/or spread out your payments.  Not making a new loan—modifying your current terms on your existing loans.

How does it work do you ask? Will you actually get the relief you need? Here’s what you need to know:

How Many Mortgage Modification Programs are Available?

The leading mortgage modification program is the Making Home Affordable Program, financed by the federal government, but also offered through individual lending banks.  Alternatively there are other programs such as Federal Housing Finance Agency Loan Modification, offered by the Federal Housing Finance Agency, available to homeowners who have a mortgage held by Freddie Mac or Fannie Mae. Lastly, some popular lenders offer their own programs; Citigroup, JP Morgan, Chase, Bank of America all offer their own loan modification program. 

Although there are quite a few different mortgage modification programs available, a majority of homeowners seeking them go through the Making Home Affordable Program.

Are You Eligible for a Modification?

There are several guidelines and restrictions to follow in order to be eligible.  A couple questions to ask yourself:

·         Is the home you are seeking a modification on your primary residence?

·         Are you current on your mortgage payments?

If you answered yes to both these questions, then your best bet is to set up an appointment with your lender’s modification department. Get prepared and be sure to collect and bring in at least 2 months of current pay stubs, tuition bills, utility bills, mortgage statement, auto loan papers, and unemployment checks, anything that illustrates your current situation.

Additionally, be willing and prepared to talk about changes including loss of income, unexpected expenses and depressed home value.  You will be expected to have your modification application and a hardship letter fully prepared including:

·         An explanation and proof you have made an effort to pay your current mortgage payment

·         Demonstrate that you are being cooperative with your bank

·         Be able to fully describe your financial circumstances

·         Be willing to talk and provide all requested documentation.

If granted a modification, it is likely to be granted a trial period during which you will be obligated to make lower mortgage payment.  If you miss a payment during the trial period, your modification could be denied.

Obtaining a mortgage modification can be a lengthy process depending on your individual case, however, it typically varies between 4-6 months.  Trial periods can range from 6-18 months.  So from start to finish, the whole process could take up to 2 years.

The process will be frustrating but try to keep calm and stay on top of your application process.   Keep a log of all the interactions, dates, times, and banker’s name for your records.  Try to remember that you are not alone and that your banker is trying to help.  If you have any doubts or questions do not hesitate to seek the answers you need.

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.

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 lender’s 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.

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