Have you been denied, even through HAMP 2010? Did your lender or loan modification attorney say "you make too much money?" Or maybe you make too little? Are you unemployed? Perhaps you are current on your payments, but the lender actually told you in order to qualify for loan modifications, you would need to stop making mortgage payments. How outrageous is that! Or maybe after repeated times the lender "lost" your loan modification application documents, you just gave up.
Despite the HAMP Law, only an estimated 14% of applications are getting approved for a trial modification, according to government statistics. And then most trial modifications are getting cancelled. This is especially troublesome considering the fact that our tax money has gone to help bail out these banks, after they engaged in the very lending practices that got us into this economic situation in the first place. You can blame the Realtors, loan originators, appraisers, builders, attorneys, or any other scapegoat. The fact remains it was ultimately the banks, with government approval, that created the predatory lending environment that got us into this mess. So what can we do? This should be of no surprise, despite HAMP 2010 and other government programs that were enacted by both Presidents Bush and Obama. Banks are in business to make money, and with help from the government through "loss-share" and other agreements, if they can make more money foreclosing on a property, they will.
Lenders, however, must be compliant during the loan process, and simply put, they have not done a good job at compliance over the last several years. Most mortgages have violations, such as disclosure compliance violations, predatory lending, excessive home values, excessive fees, abusive prepayment penalties, hidden broker yield spread premium, and even outright loan fraud, such as forgery, over stated income, over stated assets and overstepped authority. In addition, most loans were packaged, sold and securitized on the secondary market. Lawsuits have revealed a large number of missteps such as illegal transfers, fake notarizations, "robo signing" foreclosure documents, and MERS violations. Recently, lenders have actually admitted to improper foreclosure procedures.
If you meet all the qualifications, your lender will then determine how much to lower your monthly payment so it is about 31% of your gross monthly income. The interest rate could be as low as 2%. Homeowners pay no fees for the mortgage loan modification. However, homeowners could face a balloon payment at the end if your lender reduced your monthly principal payment during the loan modification. So if your lender reduced your total payments $20,000, you could owe that amount when paid off your loan, refinanced or sold your house.
Finally the Obama administration has gotten involved in the refinancing crisis by expanding the guidelines needed for a mortgage loan modification. Without these changes it is questionable if the private lending market would be very effective at all in offering wide spread loan modification.
Despite the HAMP Law, only an estimated 14% of applications are getting approved for a trial modification, according to government statistics. And then most trial modifications are getting cancelled. This is especially troublesome considering the fact that our tax money has gone to help bail out these banks, after they engaged in the very lending practices that got us into this economic situation in the first place. You can blame the Realtors, loan originators, appraisers, builders, attorneys, or any other scapegoat. The fact remains it was ultimately the banks, with government approval, that created the predatory lending environment that got us into this mess. So what can we do? This should be of no surprise, despite HAMP 2010 and other government programs that were enacted by both Presidents Bush and Obama. Banks are in business to make money, and with help from the government through "loss-share" and other agreements, if they can make more money foreclosing on a property, they will.
Lenders, however, must be compliant during the loan process, and simply put, they have not done a good job at compliance over the last several years. Most mortgages have violations, such as disclosure compliance violations, predatory lending, excessive home values, excessive fees, abusive prepayment penalties, hidden broker yield spread premium, and even outright loan fraud, such as forgery, over stated income, over stated assets and overstepped authority. In addition, most loans were packaged, sold and securitized on the secondary market. Lawsuits have revealed a large number of missteps such as illegal transfers, fake notarizations, "robo signing" foreclosure documents, and MERS violations. Recently, lenders have actually admitted to improper foreclosure procedures.
If you meet all the qualifications, your lender will then determine how much to lower your monthly payment so it is about 31% of your gross monthly income. The interest rate could be as low as 2%. Homeowners pay no fees for the mortgage loan modification. However, homeowners could face a balloon payment at the end if your lender reduced your monthly principal payment during the loan modification. So if your lender reduced your total payments $20,000, you could owe that amount when paid off your loan, refinanced or sold your house.
Finally the Obama administration has gotten involved in the refinancing crisis by expanding the guidelines needed for a mortgage loan modification. Without these changes it is questionable if the private lending market would be very effective at all in offering wide spread loan modification.
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