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Thursday, July 28, 2011

Which Mortgage Loans May Qualify for a Government Mortgage Loan Modification?

Which Mortgage Loans May Qualify for a Government Mortgage Loan Modification?


Does it matter if my loan is owned, securitized, or guaranteed by an agency of the Federal Government? Yes. Only certain loans qualify for possible modification under the Home Affordable Modification Program (“HAMP”).


How do I find out if my loan is owned, securitized, or guaranteed by an agency of the Federal Government? Your mortgage loan servicer is obligated to provide this information upon request.


Does the amount of the mortgage loan matter? Yes. If the loan is owned, securitized, or guaranteed by Freddie Mac, for example, the original loan amount cannot be more than $729,750.


My mortgage loan has already been modified once; may I still qualify for a government modification? If your loan has already been modified via HAMP, it is not eligible for another modification via HAMP. However, you may still be able to obtain a mortgage loan modification in other ways.


My mortgage loan was acquired after January 1, 2009; may I still qualify? No. Only loans taken out on or before January 1, 2009 are eligible for modification under HAMP. However, you may still be able to obtain a mortgage loan modification in other ways.


May secondary mortgage loans qualify for modification under HAMP? No, not via HAMP. However, if your primary loan is modified through HAMP, your secondary mortgage loan may qualify to be modified via the Federal Government’s Second Lien Modification program.


Does it matter if the loan is for my primary residence as opposed to for a property where I do not reside? Yes. HAMP only applies to mortgage loans for the borrower’s primary residence.


This is the final article in a July, 2011 series about the U.S. Government’s Home Affordable Modification Program (“HAMP”). McGrath & Spielberger, PLLC provides professional foreclosure prevention negotiation and mortgage loan modification services.


 

Friday, July 15, 2011

Who May Qualify for a Government Mortgage Loan Modification?

Who May Qualify for a Government Mortgage Loan Modification?


I obtained my mortgage in 2008; am I eligible? If you obtained your mortgage loan on or before January 1, 2009, then you may be eligible for a loan modification under the Government’s Home Affordable Modification Program (“HAMP”).


I’m current on my payments, so I’m not eligible, right?  WRONG. Borrowers who are current on their mortgage payments can still be eligible for HAMP, as long as they and their loan meet the other criteria, including financial hardship.


Can I get a loan modification if I have no income at all? Probably not, since the goal is to reduce mortgage loan payments to an amount which allows the borrower to make the new payment amount now and into the future. (In other words, there would probably be a reluctance to reduce the loan payment, only to have the borrower not be able to even make the reduced payments.)


Does the ratio of my mortgage payments vs. my expenses matter? Yes, this is one of the key factors. To qualify under HAMP, a borrower’s mortgage payment(s) must make up more than 31% of the borrower’s monthly income.


I need to get a loan modification for a home I don’t currently live in; can I? HAMP was designed to modify mortgage loans for primary residences – the home in which the borrower primarily lives.


I’ve heard that I might have to take some sort of class to be eligible for government mortgage loan modification – is that true? Borrowers whose monthly total debt payment to income ratio is 55% or more are supposed to enter into a free credit counseling class to be eligible.


The bank has already started foreclosure proceedings against me; can I still qualify for a government loan modification?  Yes. Borrowers against whom foreclosure proceedings are pending can be eligible.


What if I am filing bankruptcy? Filing bankruptcy, in itself, does not render a borrower ineligible.


This is the second article in a July, 2011 series about the U.S. Government’s Home Affordable Modification Program (“HAMP”). The next article will discuss which loans may qualify for a HAMP loan modification. McGrath & Spielberger, PLLC provides professional foreclosure prevention negotiation and mortgage loan modification services.


 


 

Monday, July 11, 2011

5 Basics to Know About the Government's Mortgage Loan Modification Program.

5 Basics to Know About the Government’s Mortgage Loan Modification Program (“HAMP”)



  1. The Home Affordable Modification Program (“HAMP”) is intended to help homeowners avoid foreclosure by modifying their mortgage loans so that the payments are affordable both now and over the long term, and can thus be made.

  2. Not all homeowners qualify, and not all mortgage loans qualify.

  3. Both FHA and private loans may qualify.

  4. HAMP is designed for primary mortgage loans, not secondary mortgage loans.

  5. Homeowners with no income usually will not qualify.


 This is the first article in a July, 2011 series about the U.S. Government’s Home Affordable Modification Program (“HAMP”). The next article will discuss who may qualify for a HAMP loan modification. McGrath & Spielberger, PLLC provides professional foreclosure prevention negotiation services and also helps homeowners attempt to obtain a mortgage loan modification.

Thursday, July 7, 2011

Deed in Lieu of Foreclosure: What You Need to Know

 Deed in Lieu of Foreclosure: What You Need to Know.


What is a Deed In Lieu of Foreclosure?


The Federal Government defines a deed in lieu of foreclosure (“DIL”) as follows: the process by which a homeowner may voluntarily transfer the deed to a home to the servicer when payments cannot be made. Note: the Federal Government use of the term “servicer” here may or may not be correct. The deed may be transferred to the mortgage loan holder (the entity actually owed the $) instead of the servicer (the entity which handles day to day items relating to the mortgage loan). Elsewhere, it describes a DIL as: to avoid foreclosure (“in lieu” of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process does not allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.


How is a DIL different than a mortgage loan modification or a short sale?


A mortgage loan modification results in the homeowner remaining the homeowner, but with a mortgage loan which has had its terms changed. By way of example: a 30 year loan at 7% with monthly payments of $2000 might be modified so that the loan is paid back over 35 years and/or the interest rate is lowered, resulting in a lower monthly payment for the homeowner.


A short sale is the process by which a homeowner sells the home for less than what the homeowner owes the mortgage loan holder, but the mortgage loan holder agrees to accept the sale amount as repayment of the mortgage loan. By way of example: a homeowner owes $300,000 but is only able to sell the home for $250,000 and the bank / mortgage loan holder agrees to accept the $250,000 as repayment of the mortgage loan (instead of demanding the full $300,000).


A deed in lieu of foreclosure is when the mortgage loan servicer and/or mortgage loan holder agrees to accept the deed to the house (accept full legal and actual ownership of the house), typically in return for allowing the homeowner to walk away free and clear of any further obligations. As you can tell by the name of this process, this may occur when the home was heading toward an involuntary foreclosure.


Do mortgage loan holders have to accept deeds in lieu of foreclosure?


Sometimes – but not usually. Through the Federal Government’s Home Affordable Foreclosure Alternatives program, loans originated on or before January 1, 2009 which are owned, guaranteed, or securitized by Freddie Mac may be subject to a deed in lieu of foreclosure. However, there are other requirements to qualify, including attempts at loan modification and short sale before attempting to utilize a DIL.


For loans which aren’t associated with Freddie Mac as described above, the mortgage loan holder (and the investors which have influence over that mortgage loan) has some discretion regarding alternatives such as mortgage loan modifications, short sales, and deeds in lieu of foreclosure.


Why don’t banks and other mortgage loan holders like deeds in lieu of foreclosure?


There are numerous reasons, and here are two of them.


If a homeowner owes $300,000 on the mortgage loan but the mortgage loan holder could only sell the property for $250,000 if it took ownership of the home, obviously this would not be attractive to the mortgage loan holder.


Another issue is that the mortgage loan holder may have to deal with any title issues which accompany the property, or spend time, money, and resources ensuring that the title is clear and conveyable. The last thing any homeowner wants – whether that homeowner is an individual or a bank – is to find out that there are issues which might interfere with subsequent free use and/or sale of the property.


So, bottom line, is a deed in lieu of foreclosure likely to be a way to get a homeowner out of a mortgage mess?


Unfortunately, probably not. However, it usually doesn’t hurt to ask, and there are people out there who have used this method to put a mortgage loan problem behind them and move on with their lives.


McGrath & Spielberger, PLLC is a law firm which may provide assistance to homeowners struggling to pay their mortgages or otherwise interested in exploring their alternatives. Inquiries can be made by emailing Info@McGrathSpielberger.com or by clicking here: mortgage loan modification / foreclosure negotiation assistance.

Friday, July 1, 2011

Jason A. McGrath elected to Charlotte's Civil Service Board

Jason McGrath Elected to Civil Service Board


One of McGrath & Spielberger's founding partners, Jason A. McGrath, was recently elected to the City of Charlotte's Civil Service Board by the City Council. The Civil Service Board is made up of seven citizens of Charlotte, and it:



  • holds and presides over hearings for employees of the Police and Fire Departments who are charged with violations by the Police Chief or Fire Chief (some of these employees face termination from their Department);

  • reviews and considers approval for applications for positions in the Police and Fire Departments;

  • reviews and considers approval for promotions in both Departments; and

  • maintains a register of officers graduating from the Academy.


Mr. McGrath is honored to have been entrusted to such a position and is glad to be able to serve the community of Charlotte. Board Members are not paid for their service.