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

How To Avoid Being Scammed

Homeowners all across America are struggling to make their mortgage payments.  To make things harder homeowners have to watch out for scams and con artists that guarantee to save their homes and lower their mortgage payments. 

It is important to keep in mind is that no one can guarantee anything.  So if you are going delinquent on your mortgage and seeking a mortgage modification there are a few tips to keep in mind:

• Your mortgage lender is the ONLY one who has the discretion to grant a loan modification. Thus NO third party in any case can guarantee or pre-approve your mortgage modification or application.
• Be careful with anyone that wants to charge you in advance for their mortgage modification services—in most cases it is illegal to charge in advance.
• Watch out for companies that offer a money back guarantee.
• Be cautious of companies that tell you to stop paying your mortgage payments on time.  It is not ethical for any individual or company to do so.
• If you are told to not contact your mortgage lender, beware.
• You can apply to the federal Home Affordable Modification Program (HAMP) for free and on your own or you may seek help from a housing counselor that is approved by the U.S. Department of Housing and Urban Development (HUD).
• Moreover, if an individual or company claims to be a HAMP “expert,” you are potentially being scammed.  If that company or person displays the seal or logo that represents the U.S. government in correspondence or on the internet, check to make sure they are valid.
• For information on how to apply or about a correspondent call the Homeowner’s Hope Hotline at 1-888-995-HOPE (1-888-995-4673) or visit http://www.makinghomeaffordable.gov/ 

Struggling homeowners can avoid scams by doing research and understanding all their options when looking into mortgage modifications.  The Mortgage Law Group encourages homeowners to seek professional help and/or legal assistance when making a decision to hand out your money.  Don’t let a scammer take advantage of you.

For loan modification help, call The Mortgage Law Group now : 888.591.6555

Are You Being Scammed By A Mortgage Modification Company?

With the economy going through the biggest mortgage crisis the United States has ever encountered, it is a prime time for scammers to take advantage of struggling homeowners across the nation. 

It’s crucial to understand that mortgage scams not only hurt the struggling homeowners, but the entire real estate market.  Scams have played a huge part of this housing market collapse and subsequent recession.  The combination of rising unemployment rates and diminishing homeowner income is leaving Americans scrambling to make ends meet.  That means reaching out and believing anyone who offers to save their homes.

Thousands of Americans have turned to the Home Affordable Modification Program, or HAMP, a federal program which offers struggling homeowners the option of mortgage modification.   However, scammers have become notorious for taking advantage of desperate homeowners.

Scams are usually pretty simple.  In return for an upfront fee, scammers (posing as foreclosure defense specialist, mortgage experts and even lawyers) claim to help homeowners fight their lenders and banks to get them out of foreclosure, typically by manipulating gaps in the law.  

The Mortgage Law Group wants homeowners to be careful when giving out your money.  It’s important to know the signs of a scam.  Commonly, scammers claim to be affiliated with HAMP, promising consumers lower monthly payments in return for up-front fee.

Such scams take place across the country and are advertised through several media outlets—internet, TV, radio, prints and even over the phone.  A consumer fraud alert noted that as a homeowner there are certain red flags to watch out for: 

If a company says they can “guarantee” a mortgage modification—red flag.  No company or person can guarantee or authorize those changes. 

Additionally, many people do not  know that the applications are free; you do not have to pay anyone to fill out an application.  You can complete it online at the Home Affordable Modification Program’s website at www.MakingHomeAffordable.gov .

While filling out your application, it is vital to know what you are doing. The application must be completed entirely and have all the documents presented when turned in.  Seek professional advice on your situation before you begin paying for any service. 

If you think you are a victim to a mortgage modification scam you can report the case to the government.   If you want to avoid being scammed be sure to do your research.  One way to validate a law firm such as The Mortgage Law Group is by checking out the firm through the American Bar Association and the Supreme Court.  These particular institutions do not sell advertising space or charge a membership fee for a “good rating”, making them a reliable source for company background checks. 

Let's Get The Free Market Back To Work

Since the economic recession began, mortgage modification has been critical in answering the problems of Americans across the country—they’ve been a major focus of the most recent Occupy protest that have been going on across the nation. The Obama administration offered a program that fell short of helping homeowners due to its flaw in effective design. Recently, however, conservatives fought the idea, arguing that taxpayers should not be obligated and forced to pay for people’s bad judgments and that lenders actions should not be pressured by the government.

On the whole, politicians alike agree that the economy isn’t going to get better on its own, and not any time soon. Until the United States fixes the major housing debt—homeowner’s wealth will continue to fall and the economic upturn will fall short. The collapse in house prices is not only affecting peoples wealth but it correlates with consumer spending, forcing the economy to plummet. An economy cannot function when the majority of its consumers are jobless, in over their head with debt and have no way out.

So what’s next? While mortgage modifications remain to be widely politically unpopular, conservatives are starting to recognize that the modifications are in fact necessary for our economy to get back on track.

Of course, right and left are not on the same page, and it might be hard to believe that a Republican would favor a mortgage modification proposal from the Obama administration. But conservatives are beginning to recognize and agree that mortgage debt is holding up the path to recovery for our economy. So if we can get the government, right and left to move past this buildup, then the free market can go back to work.

For loan modification help, call The Mortgage Law Group now: 888-591-655

Top Ten Questions About Loan Modifications

Are you having a hard time paying your mortgage? Loan modification may be the answer you have been looking for. As hard as it may be to believe, most lenders would rather you keep your home and receive monthly payments than force you into foreclosure during a time when the real estate market is at its lowest.

Are you still hesitant to take a “leap of faith” in seeking a loan modification? Here are the top 10 most frequently asked questions struggling homeowners ask:

1. Should I get help from a loan modification company: This is a personal preference, but there are a couple things to consider when making this decision. If you feel like you can handle the stress of foreclosure and you have the time and know how to prepare the essential documentation needed to apply for a loan modification, then go ahead. But if you do not, then you should seek the knowledge and experience a loan modification company or law firm can provide.

2. Can loan modifications help prevent foreclosure: Absolutely! Loan modification can be your best friend. It could also be your only chance to save your home. Keep in mind that the federal government now provides monetary incentives to banks that participate in the Home Affordable Modification Program (or HAMP) and grant successful loan modifications to borrowers. Pair this development with the idea that it may be more profitable for lenders to allow you to stay in your home rather than foreclose, and the chances of getting approved for loan modification may rise. It’s a win-win situation for all parties.

3. Do I qualify for modification on my loan if I am not behind on payments: It may be possible but the success rate is not high. Your mortgage lender needs to see that you have a financial hardship.

4. How does the Obama plan affect my loan modification application: The federal government has set aside billions of dollars to give to banks to support loan modifications for homeowners in need.

5. Can the lenders add late charges to the loan modifications: The late charges may be set aside when the lender is considering a loan modification for his/her client.

6. How do I qualify for a loan modification: Typically a modification is awarded to an individual who has recently lost his/her job, has suffered a reduction in income, lost a spouse, gone through a divorce, or experienced financial hardship due to unforeseen medical conditions and expenses. However, you must also be able to demonstrate an ability to afford a modified mortgage payment, along with all of your other monthly expenses.

7. What situations can guarantee me qualification for a loan modification: The loss of employment may be the most common hardship that homeowners who receive a loan modification face. But it is important to know that a valid hardship is but one of multiple qualifying factors for a loan modification. And remember, there are NO guarantees.

8. Is it possible that late or missed payments can be added to my new loan modification: Absolutely. It is likely that your past due amounts could be added to and/or spread over your mortgage term.

9. How does a loan modification affect my credit history: A loan modification does not affect your credit history. The process of obtaining a loan modification will. Once you go behind on your mortgage payments, your lender will begin to report this to the credit bureaus every month, until you either bring your mortgage current or obtain a loan modification. Upon making your first payment (after making your trial mod payments), your lender will then report your mortgage to the credit bureaus as being paid current. This will help raise your credit score over time.

10. The most frequently asked question -- What is a loan modification: Most struggling homeowners don’t realize that there are options before foreclosure. Loan modification is one of them. A loan modification is a reestablishment or adjustment of the mortgage loan terms that makes it reasonably affordable for the borrower to make his/her monthly payment.

So after reading through these most frequently asked questions, it’s important to choose a qualified modification agent. It can make the difference between keeping your home or sending it into foreclosure.

For loan modification help, call now The Mortgage Law Group now: (888)591-6555