Deed in Lieu of Foreclosure

Home Affordable Foreclosure Alternative via a Short Sale

This is where your property is sold for less than the value of the outstanding amount left on your mortgage. In other words once the property is sold you would normally still have an amount of money left owing which you would still need to pay. But in the HAFA program this amount is written off by the lender so you never have to pay the outstanding amount. This is providing the lender agrees to the sale terms prior to putting the house on the market.

The mortgage is effectively settled in full using the funds raised in the sale, even though it is less than the outstanding amount owed.

Home Affordable Foreclosure Alternative via a Deed in Lieu of Foreclosure

This is where the ownership of the property is transferred voluntarily** to the lender in settlement of the total amount outstanding on the mortgage. There may be a requirement by the lender that the property is listed and marketed as being for sale by the homeowner before the arrangement for a deed in lieu is agreed. The property must also be free of all other encumbrances such as second mortgages or liens i.e. there should be no reason that the property cannot be marketed and sold.

** A lender cannot offer a deed in lieu of Foreclosure arrangement to a borrower, the borrower has to approach the lender and volunteer to enter into a deed in lieu of Foreclosure agreement.

Eligibility Criteria for the Home Affordable Foreclosure Alternative

• The loan owner is not eligible for HAMP (Home Affordable Modification Program)
• The loan owner is delinquent on a HAMP modification, i.e. having been offered a permanent modification to a loan, repayments have subsequently been missed
• The loan owner failed to successfully complete the HAMP trial period. The trial period is where you have to successfully meet the new payments agreed during a modification agreement before you are offered a permanent modification i.e. you have to prove you can make the payments before the modification is made permanent.
• The loan owner has to apply for a ‘short sale’ or ‘deed in lieu of foreclosure’

Additional Information

The homeowner must be assessed by participating servicers for other loan modifications or retention programs that they offer before offering HAFA.

Participating servicers (in line with their policies) must consider eligible home owners for HAFA before allowing a pending foreclosure sale to continue.

Related Articles

• Benefits of a Deed in Lieu Foreclosure
• How a Short Sale Can Prevent a Foreclosure

Eligibility:

• The mortgage loan needs to be secured by a 1 to 4 unit property where at least one of the units is your primary residence
• The mortgage is a first lien mortgage which was taken out before the 1st January 2009
• The unpaid primary balance of the loan must be equal to or less than
  * 1 Unit: $729,750
  * 2 Units: $934,200
  * 3 Units: $1,129,250
  * 4 Units: $1,403,400
• The current unpaid balance of the primary loan must be equal to or less than $729,750
• The mortgage must already be delinquent, i.e. you have defaulted on one or more payments or it is reasonably obvious you are about to become delinquent
• The mortgage loan has not already been modified through the ‘HAMP’ program and you have not already received help through the ‘UP’ program
• You have to contact your lender before missing 3 full mortgage payments, once you have missed 3 full payments, you will no longer be eligible
• You actually have to be unemployed to apply to ‘UP’ and be able to provide documented evidence that you will receive unemployment benefit in the month the temporary period of relief becomes effective
• Your lender might decide that have to have been on benefits for up to 3 months before your temporary period of mortgage relief can begin

A few extra facts

The minimum length of the temporary period is 3 months, but depending on your lenders guidelines it may be possible to get this extended. You would need to talk to your lender about that to see what their rules are.

Your payments during the temporary period cannot exceed more than 31% of your gross monthly income. But you cannot miss any payments otherwise you will be classed as ineligible and the relief could be suspended.

If you get a job, you need to let your lender know immediately so that the appropriate action can be taken, which may include being reconsidered for ‘HAMP’.

So first of all, what does HAMP mean to anyone facing foreclosure when their lender has decided to participate in the Home Affordable Modification Program.

Any mortgage provider who participates in the Home Affordable Modification Program cannot refer a loan for a foreclosure sale, or take action on a foreclosure sale for loans that are eligible for the program until the mortgage holder/homeowner has been evaluated for HAMP, and if the homeowner is eligible a trial modification offer has been made.

So once a mortgage servicer participates in the HAMP program they are obliged to make reasonable efforts to get in touch with any homeowners entering the foreclosure stage i.e. the stage where they would previously have been progressed to foreclosure, to find out if they are eligible for the program. This could include personal contact with a homeowner, but that is at the discretion of the lender and is more likely to be in the form of a letter.

So the good news is that while under consideration or during the trial period, you cannot be progressed to foreclosure. Also once in the trial period and after making the first trial period payment, the lender cannot take the first legal action to initiate a new foreclosure. Of course if you fail to make the trial period payments, you will not be offered a permanent modification and you will be back to square one where foreclosure may be progressed.

Secondly with respect to unemployment, if you find yourself unemployed you can ask participating lenders to consider you for a new Home Affordable Unemployment Program referred to as ‘UP’.

If you were already into a trial period with HAMP and lost your job, you can ask to be considered for ‘UP’ only if you entered the trial period before missing 3 full consecutive payments.

It’s also worth checking now if you are eligible for ‘UP’ where you were previously not eligible for ‘HAMP’ because the eligibility criteria is different. In other words if you are unemployed, you may not be eligible for ‘HAMP’ but you may be eligible for ‘UP’ otherwise known as the Home Affordable Unemployment Program.

If all else has failed and foreclosure is looking unavoidable there is another extension to the Make Home Affordable program called Home Affordable Foreclosure Alternatives (HAFA), which provides 2 options to foreclosure. These are a ‘Short Sale’ option or a ‘Deed in Lieu of Foreclosure’ option. Both of which you can find out more about via the link.

How to Repair Your Credit – The Secrets of Success
By Chris Jollife

How to repair your credit is a question asked by thousands of people around the world every day. There are several secrets to successfully raising your credit rating, it is a job that you can do yourself if you follow a good plan.

In this article on how to repair your credit we will look at the secrets of success that you need to use in order to get your credit score back where it belongs. We will look at getting a copy of your credit report and disputing any errors, paying your bills on time and the mindset necessary for successful credit repair. After reading this article you should have a good chance of success in raising your FICO score.

The first secret of success is to apply to the three credit bureaus for a copy of your credit report. The three credit bureaus are Experian, Equifax and TransUnion. They are obliged to provide you with a copy of your credit report for free once each year. If you find any errors in your credit report then you need to dispute them by sending a dispute letter with any supporting evidence to the credit bureaus. So far so good, what else do you need to do to repair your credit?

The next thing that you need to do to repair your credit is to make sure that you pay all of your household utility bills, credit card bills, loans, also finance and any other money that you owe each month regularly. This is easy to say, but as we all know paying your bills regularly every month can be difficult, especially if you have a low credit rating to start with. This secret of success is harder to do in practice than it is to just explain it.

This is where we get to the final point in this article which really is the most important secret to credit repair success which most people do not tell you. The mindset of successful credit repair will probably determine whether or not you are able to successfully raise your credit score yourself. You need to be determined and dedicated to this process over a period of time. Before you start to repair your credit you need to arm yourself with the necessary knowledge about credit law and your rights as they stand regarding credit repair. You also need to have a good grasp of the overall process and the steps to take.

You can choose to either learn about your credit repair rights and the legalities of credit repair yourself by looking for free information on the Internet, or you may decide to arm yourself with a good credit repair guide which will show you a good overall view of the entire process as well as the details about how to perform each individual credit repair step. The choice is yours, if you are serious about repairing your credit then you will want to have all of the information about how to do it easily to hand before you begin.

The most important secret to credit repair success is to begin the process right now. The sooner that you start to work on raising your credit rating the better, so get started on it right now and you will soon have a much higher credit score.

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Do you want to learn how to repair your credit? Visit How To Raise Your Credit Score now to find out how easy it is

Article Source: http://EzineArticles.com/?expert=Chris_Jollife

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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.

By Jake Worthington

President Obama has directed lenders to speed up the review process for loan mod programs under HAMP (Home Affordable Modification Program). While homeowners are struggling to avoid foreclosure, it seems most lenders were not reviewing their customers applications as efficiently as they should. Finding loan modification help with HAMP has become easier due to the emergence of many online services offering their expertise for homeowners looking for help in dealing with the paperwork and dealing with their lenders.

There has been an alarming rate of failure under the HAMP program and studies have shown that this was due to the increased amount of time it was talking lenders to review and approve the applications being made by their customers who had met the requirements to file under this program. Some families complained that their lenders offer no loan modification help with HAMP and others claimed they had successfully made an application under this program but that their lender was not approving their loan mod in time for them to avoid foreclosure of their family’s home.

I must advise, those of you who are not familiar with this process should find a free consultation offer and discuss your specific, individual financial circumstances with an expert who has experience dealing with the loan modification programs. Loan modification help with HAMP is available to anyone looking to be guided through the process and getting professional assistance could not only speed up the process, but also help to get your application approved. Having an expert on your side experienced enough to get your application approved and knowledgeable enough to speak to your lender on your behalf is the smartest move you could make.

President Obama has mandated that loan modification help under HAMP will now be made available and the determination of approval or denial must be made within 30 days of a lender receiving a homeowner’s application. Here are some little secrets or changes that many of you may not be aware of:

• Your lender must now offer written confirmation of the receipt of your loan modification request within 10 days.
• Your lender must approve or deny your loan modification within 30 days of receipt of your completed application.
• A 3 month trial modification will be given to qualified borrowers; at the end of the trial period the modification will automatically become permanent.
• If your application is denied, you will be offered another option or other strategy to help you avoid the foreclosure process.

Remember, in order to have the best chance of approval, get professional help and take advantage of the free loan mod consultations offered by financial experts experienced with the process.

Article Source: http://EzineArticles.com/?expert=Jake_Worthington
http://EzineArticles.com/?Loan-Modification-Help-With-HAMP—Secrets-to-Getting-Approved-For-a-Loan-Modification-in-30-Days&id=4037934

It is much easier for someone who has actually gone through the process of either making their first purchase or have managed to arrange a home loan mortgage refinance; because they will at least have a reference back to the costs they incurred along the way. But if you are in the situation of being a first time buyer there are a few things you need to think about, because if you do not know about certain costs you may be forced into a position of borrowing more money than you intended to.

So what are the costs involved when taking out a home loan mortgage:

• Application fees
• Loan origination fee
• Home inspection and appraisal costs
• Points, these are paid on a once only basis usually to reduce ongoing interest costs
• Legal fees for the handling of the purchase (and sale if you are selling a previous home)
• Annual property taxes
• Repairs, remember when you own it you fix it
• House and contents insurance, contents you may be used to but now you will need to protect your house against damage or potentially complete loss, a house fire for example

Another factor you may want to consider is avoiding predatory loans, these are loans that are offered initially at a reduced interest rate and can appear very attractive to the buyer. Problems can occur later when the initial, what is called the honeymoon period, reduced payment period ends and the payments go up significantly. This can put a lot of people in financial difficulty as they may find that suddenly they can’t afford the new payment levels for their home loan mortgage.

A fixed rate home loan mortgage is an attractive option when rates are low because,although initial costs may be slightly higher, you will have a good idea exactly what you will be paying over the long term and should rates increase you will still retain the rate you agreed.

The bottom line is that you need to be aware of all the costs involved when settling a mortgage so that you can assess exactly how much you can afford to spend on the actual property and then you search for a property that is in that affordable price range. If you have to give up on one or two of the desired features you were looking for then so be it. Better to have a house that you can truly afford than one that is everything you want, but ultimately is going to end up going the foreclosure route.

What the banks do in simplistic terms is that they take the money invested by savers and they pay interest on the amount of money invested that is lower than the interest they receive from the loans they make. Obviously there are other ways the banks get returns on the money they hold, investing in stocks and shares is another obvious example.

So what the banks do with the money, in a nutshell, is to take risks with it in order to earn more from it than they pay out in interest to people who save with them.

Following on from this statement you can get a feel for how the banks reached a point of financial crises and how the whole economy of the world was put at risk. It was because they got greedy, took too many risks and lent money to too many people who were not capable or didn’t intend to repay the loans. It was done to such an extent that they got themselves into a situation that was irrecoverable without government intervention and a bail out on a massive scale funded by tax payers.

The reason they did it was because the whole system was geared towards providing incentives in the form of bonuses that rewarded this type of behavior. So basically the more loans they made, the greater their reward; irrespective of how risky the loan being made was.

Going back to the original point of why interest rates will at some point have to rise.

Fundamentally it is because if banks get their money from savers and they can’t offer savers reasonable interest rates then they will find themselves in a position where people will be looking at alternative ways of both protecting and earning from their investments. That has already been happening, people have been buying gold, precious stones, put their faith in the stock market or have started to buy property. Lets face it, there is plenty of affordable housing or commercial properties around for anyone with enough money. Buy property in the right locations and there is still a reasonable chance of getting a better income from it, through letting, than you would get in interest from the bank. Plus when things do eventually pick up again the property is very likely to be able to be off loaded at a handsome profit.

In truth if banks are paying savers an interest level that does not even match inflation then what the saver is actually experiencing is an erosion of their investment i.e. for every year that passes the capital will be worth less than when it was invested.

The bottom line then, banks will have to start giving savers reasonable interest on their savings or they will lose the source of their funds, hurt people enough and, no matter how lethargic they may be, they will stop playing the banking game. That is why interest rates will and are bound to rise, it is just a question of time.

Unfortunately, predicting mortgage requires a crystal ball, a third eye and a magic wand, all of which no human being has yet to possess. Still, you can predict with a certain degree of accuracy where mortgage rates are headed. You just need to learn how to study trends, correlate two things and be observant of the economy.

Factors to Consider

It must be emphasized that mortgage companies have their own ways with which to set individual rates. However, they tend to stick to similar sets of factors when considering their rates, which you can also use to predict where said rates are headed.

First, you have to look at the rates on the Treasury notes good for 10 years. More often than not, mortgage rates follow the US Treasury rates precisely because any lower than the government’s rates and the lenders will operate at a loss. This is common sense, too, considering that the government is often more well-versed in economics than the guy with an unpaid mortgage in his hands.

Second, you need to observe where the inflation rates are going. Keep in mind that there is a direct and almost proportional relationship between mortgage and interest rates. Again, it will all boil down to business since investors want a better rate of return no matter the state of the economy. Thus, when the inflation rate goes up, expect the mortgage rates to go in the same direction.

Third, you should also look at the trends. History does repeat itself in many instances but you must beware when drawing conclusions as many of today’s dynamics may have not been present in the past.

Keep in mind that mortgage predictions are just that – guesses. Thus, you should not be overly concerned if and when your guess falls off by a few percentage points since you neither have the crystal ball nor the third eye to accurately predict such things.

Tips to Know

You also need to observe what the other big name lenders are heading off into where their rates are concerned. Usually, the players in the industry will be heading in similar directions although their rates will differ by a few points. Thus, if a mortgage company announces that it will be cutting down rates, you can be sure that the rest of the pack will be following suit sooner than later.

And of course, look at history. Many of the factors that have influenced the movement of the mortgage rates are coming back in the new economy to influence said rates again. You may say that it is a cycle but that will not be accurate in all instances either. Just learn from the past and it can show you where the future could be.

In conclusion, you should not have a big problem predicting mortgage rates because these do not experience significant changes for any given period of time.

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Article Source: http://EzineArticles.com/?Mortgage-Interest-Rate-Predictions-For-2010-2011&id=3865528 Mortgage Interest Rate Predictions For 2010-2011

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• You can find Today’s US Mortgage Rates here

The number of permanent modifications that have been approved by the servicers but are still waiting to be accepted by the borrowers has also risen to 91,800 from the previously reported figure of 76,000. The number of homeowners that have received offers for trial modifications is still around the 1.3 million mark which is around 34 to 45% of the final goal which needs to be reached by the end of 2012. A further 72,000 trial modifications commenced in February.

The cancellation figures are pretty low, for modifications converted to a permanent status only 0.9% have been canceled and for all modifications started the number is 8.2%.

A benefit of completing 1 years worth of on time payments is eligibility to earn up to a further $1000 which could be applied to the outstanding mortgage balance, which would further reduce the capital amount owed.

Mortgage Refinancing

Mortgage refinancing through the Home Affordable Refinancing Program is due to close in 3 months in June of 2010. It is reported that over 4 million borrowers with GSE mortgages have been allowed to refinance with average savings of $150 per month which represents savings of more than $6.8 billion in the first year.

You can download a .pdf of the full report here Make Home Affordable

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