One of those “underwater” borrowers is Heather Noble, 36, who lives outside Detroit and can see five foreclosures from her front porch. A single mother, she struggled to make her mortgage payment since being laid off from her job in October 2007.
Late last summer, she started a $17-an-hour job handling billing for a doctor’s office, but making her home loan payment of around $1,000 a month was a stretch because her take-home pay is at most $1,600 a month, depending on the amount of time she works.
Starting last spring, she spent hour after hour on the phone talking to what she describes as “every human being and division possible” at JPMorgan Chase & Co., before obtaining approval for a loan modification.
Noble’s modification had been held up until the fall, and she was actually blocked from making her monthly payment until the Associated Press made an inquiry into her case. “In the large volumes that we’re handling, we occasionally will miss something,” spokesman Tom Kelly said.
Read the full AP article here
Loan Modification
Kay, about to lose her Duluth home, was relieved when her bank finally granted her appeal for help with her mortgage.
Then she read the new terms. The interest rate had not dropped. Her monthly payments went up, not down, and they’re scheduled to go up again — by almost a-third — in seven years.
“I took it because I felt like it was the only option I had,” said the single mother who asked that her full name not be used. “But in seven years, I’ll be sitting exactly where I am now. I will have to move out.”
Kay would be counted among the 950,000 mortgage modification successes made last year in the housing market free fall, as tallied by Hope Now, a coalition of mortgage industry and financial counseling institutions. It also estimated that 2.2 million home foreclosures were prevented by flexible lenders, such as Kay’s.
But counselors at several foreclosure prevention agencies in Minnesota, as well as several new studies, say those numbers are misleading, with the vast majority of modifications still leaving homeowners with mortgages they can’t afford. Counselors say many modified mortgages still have the same esoteric terms that sunk so many subprime borrowers: “interest-only” and “balloon” payments, as well as scheduled interest rate increases — now called “stepped rates” instead of “adjustable rates.”
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Mortgage
NEW YORK — Chase announced today that it has extended its mortgage modification efforts to the investor-owned loans that it services — about $1.1 trillion of loans — significantly expanding the reach and effectiveness of its previously announced mortgage modification efforts. This effort includes investor-owned mortgages held in securitizations.
Based on the company’s review of investor agreements and its experience with investors and trustees to date, Chase believes it can legally modify the vast majority of mortgages owned by investors consistent with the relevant investor agreements and the best interests of investors, and intends to make modifications where appropriate. Chase will continue to seek investor approval in the small number of situations where investor agreements contain specific terms that may limit modification actions Chase can take.
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Mortgage
For the past few years the lowest “common” mortgage rate was 5.75%, and nobody would have guessed we would see it drop lower then that, Including the not so liked Freddie Mac. TOday Money.CNN.COM is reporting that the National Average rate for a 30 year fixed loan fell to 4.96% in the week ending Jan. 15, 2009.
The national average rate on the 30-year loan fell to 4.96% in the week ending Jan. 15, down from 5.01% a week ago. That is the lowest on record. Freddie Mac began its rate survey in 1971. A year ago the loan averaged 5.69%.
Adjustable-rate loans also fell. The 5-year, Treasury-indexed hybrid mortgage averaged 5.25%, down from 5.49%. A year ago the loan stood at 5.40% and has not been this low since September 2005. The 1-year, Treasury-indexed ARM averaged 4.89%, down from 4.95%. A year ago that loan was at 5.26%.
The 15-year fixed-rate mortgage, a popular refinancing choice, edged up to 4.65% from 4.62% a week ago. Last year at this time the loan averaged 5.21%. Refinancing activity has been strong as mortgage rates have plumbed historic lows.
Read the full article here at money.cnn.com
Mortgage
Many people today have loans for various reasons from a mortgage to buy a home, to personal or business loans. Such loans are normally paid back at a set amount each month for a fixed term and when this term ends the loan ends as the loan amount plus any interest has been paid back in full. There are times however when a lender may find it hard or even impossible to make the agreed regular repayments on their loan and this is where loan modification can help.
Loan modification is a way of changing the terms and conditions of the original loan you took out so that the borrower can continue to pay but normally at a reduced rate which is more affordable. This type of loan modification will mean that the loan term is extended but this works in the favour of the lender as they are not financially stretched each month and the repayments are still being met.
In other types of loan modification the lender may agree to change the loan rate, which means that the lender will pay a lower rate of interest on his or her repayments. This money can then be added to the back of the loan which results in lower repayments but for a slightly longer term. When loan modification is done in this way it helps the borrower to avoid their credit rating falling and the borrower is secure in the knowledge that the loan will continue to be repaid.
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Loan Modification
When stuck in a financial chaos, many people wonder how successful a do-it-yourself loan modification procedure would be. Though, such anxieties are quite baseless since the National Association of Mortgage Bankers report that loan modification requests submitted by homeowners have an sanction rate of over 20 percent. This means that any determined, committed and knowledgeable homeowner can work with their lender to productively modify a house loan. With sufficient study, you can easily arrange the requisite paperwork for a professional and accurate do-it-yourself loan modification that meets the guiding principle of your lenders.
What Is A Loan Modification Kit?
Getting started on the procedure of loan modification is the toughest part as most homeowners are clueless regarding whom to get in touch with, how to go on and what paperwork to complete. This is where the importance of a loan modification kit comes in. Such a kit has been especially designed to aid struggling homeowners to successfully finish a loan modification procedure on their own.
A perfect loan modification kit would contain get in touch with numbers and addresses of national mortgage lenders, step-by-step instructions on implementing the official procedure, samples of loan modification hardship letter, checklists and much more.
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Mortgage
TheStreet.com among others are reporting a handout given to Bank Of America by the United States Government in the sum of $20Million in exchange for preferred stock with an 8% dividend return. Also Bank Of America will also need to comply with enhanced executive compensation restrictions and implement a Loan Modification program.
Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8% dividend. The bank will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program, Treasury said.
The injection of fresh capital will come from the government’s $700 billion rescue fund and will be similar to assistance provided in November to another troubled bank, Citigroup(C Quote - Cramer on C - Stock Picks).
Before the new support package, Bank of America had received a total of $25 billion in capital injections from TARP, including $10 billion for Merrill Lynch.
Click here to read the article at TheStreet.com
Mortgage
The Washington Independent has a great article about our not so friends Fannie Mae and Freddie Mac. According to the article, when you get a Loan Modification through either of the two, you wave all rights to, well anything. Including rights you had with the original mortgage - before the Loan Modification.
But also included in the Fannie agreement is a provision stating that “borrower has no right of set off or counterclaim or any defense to the obligations of the Note or Security Instrument.” The waiver is part of the borrower requirements that must be signed for the loan modification. Fannie Mae’s sample version is available on one of its websites; the Freddie Mac agreement, which has similar language, can be accessed only by servicers. The agreements were designed by Fannie and Freddie.
In plain English, the waivers mean a borrower can’t sue the lender who originated the mortgage if the loan modification goes bad, or for any other lending abuses concerning their loan, Gordon said. Such waivers are regularly required in the settlement of class action suits, but they haven’t been included as a matter of course in individual loan modifications agreements until lately. “I find this outrageous,” she said.
Gordon’s not the only one. Forcing borrowers to sign away their legal rights to sue in order to get loan modifications became an issue this summer, when Frank angrily denounced the practice at a House Financial Services Committee hearing. Frank also told servicers to stop using the waivers. The hearing was called to find out why more loan modifications weren’t getting done and to look at the role of mortgage servicers in the foreclosure crisis. Some advocates cited the increasing use of waivers by servicers and major lenders such as Countrywide as one of the problems.
Click here to read the full article
Loan Modification
Fannie Mae, freddie mac
