Mortgage Foreclosure & Refinance Resource

This was a recent Question asked to MarketWatch: What do you think of hiring a law firm to negotiate a loan modification? They charge $3,995 and say they have a 95% success rate. Do you think this is better than trying to do it on your own since so many people have so much trouble?

The Answer: I do not know anything about the law firm you mentioned. Four grand is a lot of dough, especially for something you should be able to do for yourself. But if you don’t think you are capable, it may be money well spent.

Yes, folks are having a difficult time dealing with their lenders, who are overwhelmed by the sheer number of delinquencies and foreclosures. But a lot depends on your window, meaning how long you have before you find yourself in real danger of losing your home. If you have plenty of time, then you can fight your own battle. If not, you may need all the help you can get.
The good thing about these kinds of specialists is that they know who to speak with and they know how far lenders will bend. They also know the right buttons to push to get lenders off dead center, and I’ve been told that lenders actually prefer to speak with them as opposed to dealing directly with irrational, hysterical homeowners.

Another avenue you might wish to pursue is seeking the aid of a nonprofit counseling agency, one that specializes in housing issues. Their success rate is very good, too, and they don’t cost nearly as much as a private law firm. [Read more →]

Mortgage giants Fannie Mae and Freddie Mac have directed their network of servicers to halt all foreclosure and eviction proceedings between Nov. 26 2008 and Jan. 9, 2009, meant to give a recently announced rescue plan time to work.

The Streamlined Modification Program, set to launch Dec. 15, enables delinquent borrowers to get a modified mortgage that lowers payments to no more than 38% of their gross incomes.

“By delaying these foreclosure sales, the nation’s servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new [program],” said Freddie Mac CEO David M. Moffett in a statement. [Read more →]

 The federal government announced plans Wednesday to modify a program to make it easier for troubled homeowners to exchange problematic mortgages for more inexpensive ones. The new expedited regulations will expand on the Housing and Urban Development Department’s Hope for Homeowners program.
The changes will give lenders a greater incentive to participate, by allowing them to write off less of the loan value than under the previous rules. Homeowners will benefit from lower monthly payments, but the loan’s term may be extended to as much as 40 years. The provisions will change the rules based on “Hope for Homeowners” legislation passed by Congress in July.
Under the new rules, homeowners won’t have to spend more than 31% of their monthly income on their house payment. For the lenders, the rules will allow them to write down a loan to 96.5% of the home’s actual value, rather than to 90% as under the old rule. [Read more →]