There are some rule changes that new applicants should be aware of which actually come into effect on June 1st. Servicers now require upfront documentation before they can initiate new trial modifications and in practice that means they have been making that request since March 2010. The treasury is monitoring service performance to ensure the borrower demand is met and that modification requests are reviewed in a timely manner. This contradicts most reports from real people on this aspect of the HAMP service where the biggest complaints have been of slow responses and lost paperwork.

Servicers are stating that the most common causes of cancellations include missed trial payments and incomplete or unverifiable documentation. So you can see that getting the documentation in up front for verification should improve the efficiency of the service and ensure eligibility before the process is initiated. As for missed payments, well that is why this criteria was introduced, people have to demonstrate that they can meet the new payments before a permanent loan modification is offered.

There are statistics now available that show servicers who started trials with verified documents generally posted higher conversion rates. This is as opposed to accepting stated incomes, i.e. those that relied on the borrower to disclose their income and didn’t verify the accuracy of those statements before starting the process of loan modification. The figures for the 4 largest servicers using stated income as a basis for trial starts is a less than 30% conversion rate.

This certainly begs the question of whether people may have been overstating their income to try and get on the program, because if they have then it looks like that has seriously back fired on them, to the tune of 70% of applicants in the case of the big 4.

As an aside, it is probably worth knowing that the HARP Home Affordable Refinance Program is due to end on the 30th June 2011, so if you were considering looking into this as an option you are probably going to have to make a move on it pretty soon.

For the full report on the HAMP latest news you can use this link.

It may be possible that the bank has a hardship form of some sort that you can fill in, which would be useful as then all you would need to do is answer their questions honestly and explain how you came to be in a situation of not being able to afford your mortgage payments.

In the absence of a form however it is a really good idea to use hardship letters that follow a template to include all the information that the bank or lending agent would expect you to provide, a sort of hardship letter sample.

Below is a request letter template that shows you how to construct a letter for this purpose.

First and foremost make sure the letter is legible and easy to read, if possible use a typewriter or a computer and print the letter out.

Provide all your contact details including, name, address and phone number as a minimum, if you have it you can also provide an email address.

Whenever you are writing a hardship letter to stop foreclosure you must include the reference details supplied by your lender for your mortgage, it could be an account number or an alpha/numeric reference that they have supplied you with. Find it on the letters they have sent you and make sure that you use it, that way they will know exactly who they are dealing with amongst the thousands of people who will be writing to them.

They will also require the additional information below which will need to accompany your letter:

• Details of your gross monthly income, include a recent pay stub if possible and also provide documented evidence of any other earnings.
• Your most up to date income tax return.
• Any collateral or valuable assets you have
• Tell them about any second mortgage on the house.
• How much you owe and the minimum monthly payments you have to make on all credit cards.
• How much you owe and the monthly payments on any other debts such as car loans.

It is important to write the letter and send the additional information as soon as possible and before the lender signs the ‘Default Notice’.

You should put the whole package together and send it using registered mail that includes a receipt of receiving. That way you will know when it has been delivered and you can follow up a day or two later with a phone call to find out if your request is being processed. That will demonstrate that you see the problem as urgent and that you fully intend to try and resolve the situation, but always be polite when you call.

If you do everything you can to help the lender understand your situation, provide all the information they need and remain calm and polite, there is a good chance that they will respond to you positively. They are human after all and humans tend to treat people the way they are treated, if you help them they will help you.

Obama’s Stimulus Package has 2 main components:

1. Refinance

2. Loan Modification

Let us discuss each one of these components in detail:

1. Home Refinance Stimulus Package

· In this program the two most powerful mortgage lending agencies of the government Fannie Mae and Freddie Mac would refinance the home loans of all the owners who owe much more amount to the bank than the actual value of the house. The only condition for this package is that the mortgage must be a guaranteed one by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount, you can gain advantage of the program.

· But there is one major condition joined with refinance stimulus package and that is; the offer is only valid for the properties which are used for residential purpose. Any property which is lying like a building and no one is living inside, will not qualify for Obama’s home refinance stimulus package.

2. Loan Modification Stimulus Package

· There have been special incentives that Obama’s government is going to provide to all the lenders for doing loan modification on the existing home loans of the borrowers. According to this program, the homeowners can get rid of foreclosure by getting it done. The main features of this program would be; interest rate would be reduced and it can go down to 2% only, tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.

· With loan modification, lender will also take care of the total monthly payments that a borrower is making and it would not increase than 31% of the total monthly gross income.

To know more about Home Refinance Stimulus Package and to check if you qualify

Click Here –> Loan Modification Help

President Obama has offered $1000 incentive for home owners that opt for Loan Modification instead of Short Sale Or Foreclosure.

To know more about Latest Loan Modification Programs and to check if you qualify for Government Grants

Click Here –> Federal Grant For Homeowners

FREE Trials are for a limited time only, so get yours today.

Article Source: http://EzineArticles.com/?expert=Luke_Cambell
http://EzineArticles.com/?Home-Refinance-Stimulus-Package—Obamas-Stimulus-For-Mortgage-Refinancing-and-Loan-Modification&id=2213316

One thing you should know for sure is that there are differences between the mortgage refinancing program from Obama’s initiative “Making Home Affordable’  and an earlier initiative that came from George Bush  the ‘Hope for Homeowners’ program.

Hope for Homeowners Program

This program is administered by the Federal Housing Administration and its key features are as follows:

• Mortgage is fixed rate and can be taken over a period of 40 years (recently extended from 30 years)
• Refinancing provides the possibility of reducing monthly repayments
• The agreement is entered into voluntarily by both lender and borrower

To be eligible for this loan certain criteria needs to be met:

• The house must be your primary place of residence and you should have no interest in other residential properties
• Your mortgage must have been in place before January 1st,2008 and you must have made at least 6 monthly payments
• You must be is a situation where you cannot make your current mortgage payments without assistance
• You cannot have been convicted of a fraudulent offense in the last 10 years, obtained a mortgage off the back of false claims or deliberately failed to make a payment on a debt
• You must maintain a full record and documented evidence of income and employment
• You have to be prepared to share the positive equity in your home, both current value and any future increases
• Your total mortgage payments, including capital repayments, interest and insurance will have been more than 31 % of your gross income from March 2008.

Constraints and payments:

• the loan to value ratio of your house can be no more than 96.5% (recently increased from 90%) on the understanding that your total mortage payments can be no more than 31% of your gross income and your total debt repayments can be no more than 43% of gross salary for equivalent time periods (e.g. monthly). This can be increased to 38% and 50% repsectively if the loan to value ratio is 90% or less.
• the interest rate will be based on current market rates and agreed between you and the lender
• there will be an initial mortgage insurance payment of 3% after which you will pay a 1.5% mortgage insurance premium as part of your monthly payments.
• You will also be required to pay closing costs on the loan, for an idea of what these costs will be you will be provided with a best estimate at the time of taking out the new loan.
• if you have a second mortgage and want to take out another mortgage under this program you will have to wait 5 years from the start of the first loan.
• This program ends on September 30th, 2011

These are the key features of this program, to find out further details and information you can talk to a FHA approved lender or a housing counselor.

Making Home Affordable

This program was introduced by Obama to try and get the American housing market back on line and the key features are as follows:

• there are 2 aspect to this initiative, mortgage refinancing and loan modification, it is the mortgage refinancing aspect that is comparable to the ‘HOPE for homeowners’ program which is why this is the aspect we will be looking at here. Refer to my previous post for ‘loan modification.
• Anyone who has an existing mortgage that is owned or guaranteed by Freddie Mac or Fannie Mae can be considered for mortgage refinancing  providing they meet the additional qualifying criteria.

Qualifying criteria for the ‘Making Home Affordable’ mortgage refinancing option:

• you have to be the owner of a 1 to 4 unit home
• your mortgage payments must be up to date (no more than 30 days late on a payment in the previous 12 months)
• your loan amount cannot exceed more than 125% of your house valuation (recently increased from 105%)
• you must be in a position where you can afford to make the repayments on the new loan albeit they should be lower than your current loan (this refers to a change in circumstance since you took out your current loan e.g. you may have lost your job and consequently income)
• refinancing improves the affordability or long term stability of your loan

Constraints and payments:

• Points and fees will be advised by the lender in accordance with their terms
• Interest will be set at market rates around the time of the loan.
• Anyone who is considered to be delinquent or has exceeded a  30 day late payment period more than once in the last 12 months will not be eligible
• Mortgage insurance is required only if your current loan includes private insurance
• The monthly payments by default will include an allowance to cover taxes and insurance.
• This program ends in June 2010

You are entitled to free advice from your lender or a HUD approved housing counselor for the ‘Making Home Affordable’ program never pay anyone for this service.

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The first general rule is that you should be struggling to make your mortgage payments if you are meeting your mortgage payments comfortably then you are not going to qualify. So what exactly do the stimulus package rules say for loan modifications: -

• You have to be in residence of a single family home
• Your total repayments including capital repayments, interest, tax and insurance must be more than 31% of your gross income (from March 2008)
• Your mortgage balance must not exceed $729,750 for a single unit but for multiple units the amount can be up to $1,403,400 for the maximum 4 units
• Your mortgage pre-dates the 1st of January 2009

What you should also know: -

The scheme ends on the 31st of December 2012

Not all the mortgage lenders are participating in the scheme, despite there being incentives in place to encourage them to do so.  Also if you are trying to secure the deal on a home that you have bought as an investment and it is not your primary residence then you will not qualify.

Some loan agreements and financing preclude you from taking part in the scheme and ultimately it is the loan provider that decide whether your particular circumstances are suitable for the scheme or if offering you the loan modification is not in their best interests or the  best interests of their investors. Which means in a nutshell that getting on the scheme is not a given even if you meet all the other qualifying criteria.

Advantages over the mortgage refinancing option:

• it is unlikely that you will be required to go through a new credit check
• processing the application should be much quicker than the mortgage refinancing option.

This is the 2nd of 2 prongs of  Obama’s initiative on giving aid to people facing financial hardship over home ownership, the option will not suit everyone and any changes to you current arrangement should be carefully considered and the proper advice regarding your specific circumstances should be taken into account.

For the mortgage refinancing details please refer to my previous post.

A Wells Fargo loan modification is easier now for distressed borrowers with the Obama federal plan. This government loan workout offers the opportunity for millions of homeowners to reduce their interest rate and achieve a low affordable monthly mortgage payment. Do you know how to apply for a Wells Fargo loan workout using this plan?

Even if you have already applied for a Wells Fargo loan modification and been turned down, or are still awaiting your answer, you can ask to be considered for the Obama federal government plan. The approval guidelines are strict, but if you know a little bit about how to complete your paperwork properly, you could have a good chance of getting:

1. Your interest rate reduced to as low as 2%
2. The loan term extended to 40 years
3. A portion of your principal balance deferred

Some or all of the above options are available to qualified borrowers to arrive at a new, modified payment that equals 31% of your gross monthly income. A Wells Fargo loan modification using the Obama government plan offers the same options to all borrowers and there is no negotiating needed-either you qualify or you don’t. Once you learn a few simple tips to make sure you complete your loan modification application forms properly, you can work directly with the bank to get the new loan you need.

The Treasury Department has warned homeowners against paying anyone to apply for this plan, stating that free counseling is available through the HUD website. The counseling centers explain what programs are available, but they do not help you complete your application. So this does mean however, that you can just throw your paperwork together and hope for approval. Successful borrowers will have taken a few hours to learn what they need to know to prepare their application so that it will fly through the approval process.

If you are serious about getting a Wells Fargo loan modification, make sure you are prepared and have some upfront information about how to get approved. It’s not difficult to learn enough about the process to greatly increase your chances of success. Help is available if you know how to get it-make sure you have done everything you can to save your families home.

You can get the help you need to apply for a Wells Fargo loan modification by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Learn how to qualify for the Obama federal loan modification plan. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com

Article Source: http://EzineArticles.com/?expert=Susan_V._Gregory
http://EzineArticles.com/?Wells-Fargo-Loan-Modification-and-the-Obama-Federal-Program&id=2123957

The Obama new stimulus package amounts to a massive $1 trillion bale out package that offers new loan options, grants and tax credits. So for home owners that are struggling, there is relief in site and it is possible to take a home loan mortgage refinance option to get lower rates of interest or longer repayment periods.

Obama has offered a $1000 incentive to encourage home owners to opt for mortgage refinance or loan modification instead of going for a short sale or foreclosure option.

There are rules that apply to these mortgage refinance deals : -

Loans guaranteed or issued by the Federal National Mortgage Association, (Fannie Mae) or the Federal Home Mortgage Corporation, (Freddie Mac), which are institutions that have been in existence since 1968 as government sponsored enterprises (GSEs), are all eligible for mortgage refinancing providing that :

• You are the owner of a 1 to 4 unit home
• The existing mortgage value is no greater than 105% of the valuation of your home. This has now increased to 125% since it became clear that it was locking many people out of eligibility for the program, see home loan mortgage refinance update.
• You are up to date with your payments and have not fallen behind.
• Your circumstances have not changed and you are able to afford the new lower repayments, e.g. you haven’t lost your job and consequently your income.

Additional information

The mortgage refinancing option is only available until June 2010
The applicant can ask for a fixed rate of interest rather than a variable rate (adjustable rate mortgage)
Longer term loans are being made available so that you can pay back over longer periods e.g. 30 years.
If your mortgage isn’t guaranteed or issued by the 2 primary institutions (Fannie Mae or Freddie Mac) then you are not eligible

Also on a cautionary note home loan mortgage refinancing may require some fees to be paid, you may also have to go through new credit checks and they typically take longer than the loan modification option. The best way forward for finding out if this it the choice for you is to approach your existing lender and see if you qualify and what the full conditions are so that you can make an informed decision.

For the United States this is one prong of a two pronged approach to to balancing out the financial chaos that has existed for homeowners since the near collapse of the banking system both in the USA and worldwide. I will be discussing  the 2nd ‘loan modification’ prong in a separate post.