Underwater Homeowners

Right now, 1 out of 4 borrowers are underwater on their mortgages. Many homeowners are just simply waking away from their homes whether they can afford their mortgages or not because they know they can never regain the equity they lost. Home values have depreciated as much as 50% in hard hit areas such as Florida, Nevada, California and Arizona. The Treasury set aside $75 billion for foreclosure prevention so it’s time to spend it on principal write downs besides rate reductions. Reducing principal will lower default risk and stop foreclosures from flooding the housing market and keeping home prices down. This is the only solution to helping these homeowners get out from under since extending loan terms and rate reductions have not solved the crisis.

A modification attorney can help you negotiate a loan modification and principle reduction with your lender. It is recommended that you use a modification attorney because they are experienced in negotiating modifications with loan servicers and getting results. Most borrowers don’t know how to go about getting a modification and submit incorrect paperwork delaying the approval or even further jeopardizing their chances of approval. This ultimately results in their losing their home to foreclosure. Smart borrowers are turning to a modification attorney to assist them with their loan modifications. For more information on qualifying for a loan modification, please visit the American Residential Law Group website.

Home Affordable Modification Program Better Alternative

A better alternative to help you keep your home is to seek a mortgage loan modification under the Obama Administration’s Home Affordable Modification Program (HAMP). The program is voluntary, so both the lender and the borrower must agree to participate. The Treasury Department’s recent report reflects that lenders participating in the program, including Bank of America Corp. and JPMorgan, successfully converted 168,708 trial plans into permanent loan modifications. This was up from 116,297 through January 30, 2010. There were more than 666,000 borrowers that participated in the trial repayment plans according to the figures released by the Treasury. Bank of America represents about 1/3 of the 3.4 million borrowers that were eligible for the program. They serviced 22,300 permanent modifications. JPMorgan had 437,323 eligible borrowers and serviced 20,450 with a home loan modification.

Borrowers that participated in the mortgage loan modification plan saved an average of $500.00 a month on their mortgage payments. However, the 31% debt to income ratios have only dropped to 59.8 from 76.4 so there are some concerns that too many borrowers still may not be able to afford the reduced payments. But for a significant number, the program is helping them keep their homes. The hope of the HAMP program is to eventually get the lien holders to reduce principal as well so that borrowers can obtain some positive equity in their properties which will help turn things around for the housing industry as well. You can learn more about the entire process by visiting http://www.fairhomeloan.org/.

January 2010 Home Sales

According to the latest report released by the National Association of Realtors, existing home sales fell 7.2% in January 2010. The good news is that home sales are up 11.5% over sales a year ago the same time. The extension of the federal first time home buyer and non-first time buyer credits are helping to improve the number of home sales according to the NAR. However, the total supply of homes went up in January 2010 to a 7.8-month supply from a 7.2-month supply in December 2009. Industry experts hope that the sales will increase as spring approaches and buyers continue to take advantage of the credits by purchasing distressed properties helping to lower the inventory and keep home prices more stable. In order to qualify for the credit, you must be under contract by April 30, 2010 and close on or before June 30, 2010.

While saving your home from foreclosure is a challenge for upside homeowners, buyers who need mortgages are facing challenges as well from competition among all cash buyers. Cash buyers have an edge on the market because they can close quickly. This is an advantage to distressed homeowners and to banks that own REO’s because they know the buyer qualifies to close the transaction. Smart buyers are working with local Realtors to assist them with finding properties and home buying strategies.

Loss Mitigation Process

Since most homeowners are not familiar with the loss mitigation process, it is extremely important that they hire a real estate attorney who can guide them through the process easily and quickly. You may only get one opportunity at loss mitigation so you want to do it right the first time. An attorney is experienced with negotiating loss mitigation resolutions with lenders and have a greater success rate than a homeowner who attempts to do so on their own.

Loss mitigation involves the following alternatives to foreclosure:

• Reinstatement
• Payment program
• Forbearance
• Deed in Lieu
• Short Sale

A mortgage modification can take 3-6 months to get approved. The attorney will prepare the application, authorization, hardship letter and submit the financial information required by your lender to help you negotiate the best rate and terms for your modification.

Why Choose a Real Estate Attorney to Help?

Real estate foreclosure defense attorneys can help negotiate the right solution for your financial situation by introducing you to programs that can help save your home. They also can represent you in court proceedings, write letters on your behalf and prepare the proper documentation as well as explain all your legal options to save your home from foreclosure.

Can You Afford a Lower Payment?

If you can afford a lower payment, then a mortgage modification is the right choice to save your home. A loan modification attorney has many years of experience negotiating with lenders, and knows how to get your payments lowered to ones that you can afford so you can keep your home.

If you don’t think you can afford a lower payment, the attorney can find another solution for you. A short sale may be the appropriate option in that case. The short sale takes awhile to get approved, but your attorney can negotiate that you just walk away after the closing without owing your lender any more money. This way you can focus on more important things in your life.

It’s foolish not to at least speak to a foreclosure defense attorney. Many offer free consultations or reduced rates for initial consultations. Why risk losing your home when a foreclosure defense attorney can help you keep it or at the very worst delay the foreclosure proceedings so you can stay in your home and not have to make any payments.

Visit www.fairhomeloan.org if you have any more questions.

There are many errors and violations made by lenders with regard to mortgage documents. In fact, it is extremely common to find violations that lenders have made in connection with TILA, RESPA and HOEPA laws. Most loans have some violations. If you are behind in your mortgage payments, you may be able to use your lender’s practices of committing violations in mortgage laws as leverage to resolve your delinquent mortgage situation and obtain a mortgage modification.

A home loan modification law firm such as the American Residential Law Group is experienced in forensic loan audits. Hiring an experienced mortgage modification firm such as the American Residential Law Group is smart because they can help you to determine if there are violations of Federal laws by your mortgage company by reviewing your loan documents. If the forensic audit reveals that your lender has violated federal mortgage laws, then your loan modification attorney can use this as leverage in negotiating a mortgage modification on your behalf. If you are interested in a mortgage modification, and you don’t know where to turn, a mortgage modification law firm such as the American Residential Law Group is a good place to start.

Benefit of Using a Mortgage Modification Attorney

Mortgage modification attorneys are helping thousands of homeowners in similar situations as yourself obtain mortgage modifications so that they can save their homes from foreclosure and negotiate more favorable mortgage terms and interest rates. Lenders face fines and penalties for violating mortgage laws so they would much rather work with you to find a resolution that works for everyone. The loan modification can reduce your monthly payment to an affordable one and also extend your loan term. The lender may also agree to forbearance. You have options and choices and a loan modification attorney can advise you of the best ones for your financial situation.

Don’t Waste Time

Since time is of the essence, you should not waste a moment of it. You may be able to keep your home and not make any mortgage payments while your loan modification attorney is negotiating a resolution of your mortgage with your lender. Under the government’s Home Affordable Modification Program (HAMP), you may be eligible for a mortgage modification on our primary residence. An experienced mortgage modification law firm has established relationships with various lenders’ loss mitigation departments and knows the right person to speak to, saving you time and money. The longer you wait and do nothing, the more chance you have of losing your home to foreclosure. By hiring a loan modification attorney, you increase your odds of keeping your home and obtaining a mortgage modification.

You have options to save your home, and a loan modification attorney is the only person who can legally represent you. Why take a change in losing your home, when you can keep it with a mortgage modification?

The Obama Home Affordable Modification Program (HAMP) has been helping troubled homeowners with obtaining a mortgage modification or refinancing their home. As of June 1, 2010, loan servicers may not foreclose until a borrower has been evaluated for HAMP and it has been determined that they are ineligible under the program. Borrowers who are at least 60 days or more delinquent on their mortgages may be contacted by their loan servicer to participate in the HAMP program.

For lenders who have already instituted foreclosure proceedings, those proceedings may continue, but they cannot schedule a foreclosure sale until the HAMP evaluation has been completed. The HAMP program has modified 116,297 loans by lowering the borrower’s interest rate or extending the loan term. More than 830,000 borrowers have received trial repayment plans as January 2010 according to Treasury Department’s records.

Guidelines and Eligibility Requirements

The following are highlights of the HAMP eligibility requirements:

• Owner-occupied one to four unit property only. No investor owned property or vacant property is eligible.

• Your unpaid first mortgage must be equal to or less than $729,750 (there is a higher limit for two to four unit properties, ask your loan servicer for more information).

• Your loan must have originated on or before January 1, 2009, and must be a first lien. Second lien mortgages are not eligible.

• Your mortgage payment including insurance, taxes and any homeowner association dues must be more than 31% of your gross (pre-tax) monthly income.

• You cannot afford to make your current mortgage payment because it is not affordable for you.

• You can only modify your loan once under the program.

If you want to participate in the HAMP program, you should contact a mortgage modification attorney to make sure you qualify. American Residential Law Group’s team of experienced modification lawyers can help you apply for the HAMP program and explain the loan modification procedure to you. You will need to provide some financial documentation to get started such as a list of your debts and assets, W-2 or 1099’s, hardship letter, last two years income tax returns and most recent bank statements. The modification attorney will do the rest. You may also be able to stay in your home without making any mortgage payments while the negotiations are going on. Don’t ignore your mortgage situation; take action now by applying for a mortgage modification through HAMP today. For more information, please contact the American Residential Law Group.



Benefits of Using an Attorney

Here are some of the benefits of using a home loan modification attorney:

• An attorney understands the foreclosure laws.
• They are experienced and skilled negotiators
• Can legally represent your interests
• Tenacious and they follow-up
• The attorney knows has established relationships with loss mitigation departments of lenders and knows how to get you results quicker and more efficiently
• Helps takes the stress off of you

An attorney will prepare the necessary paperwork for your loan modification application helping to speed up the process. You don’t have time to waste making errors and omitting information so it is smart to use an attorney to help you prepare your application and negotiate your loan modification. While you could contact your lender and attempt the process on your own, why take the chance of making a mistake? You only get one opportunity to get the loan modification so it is foolish to take the risk of losing your home when you know an attorney will handle the process correctly and have more success. Your home is your most valuable asset; you should do whatever it takes keep it.

Alternatives

If obtaining a loan modification is not your goal, the attorney will be able to suggest other options. Mortgage modifications may not be right for everyone. You have to have sufficient income to be able to make the new payments. If you do not have sufficient income, a short sale or selling your home may be a better solution.

Taking no action at all is the worst thing you can do. Don’t panic. Speak to an attorney as soon as you realize that you may not be able to make your mortgage payments. An attorney can help you find a solution that works for you and your lender. You may be able to stay in your home a lot longer than you think and hopefully keep your home from going to foreclosure. Lenders are more apt to take your situation more serious and work with you if an attorney is involved.

For any questions, visit American Residential Law Group’s website.

Loan modifications are no different. If you want to go through the process on your own, without paying a third party to represent you, it’s going to take a lot of your own time. First of all, it’s important to understand the concept of “opportunity cost.” If you are taking a lot of your own time to accomplish something, and that could be time better spent making money at work or spending time with your family or friends, you have to weigh the cost of what you could be doing with that time.

When it comes to loan modification, if you go the solo route, you will bear the brunt of the grunt work, such as filling out paperwork, calling and negotiating with loss mitigation representatives at your lending institution, and attempting to demonstrate how you qualify for a loan modification. If you are in financial trouble, it is understandable why you would want to avoid spending even more money on representation for the negotiation of your loan modification. Unfortunately, being frugal in this area can be the most expensive decision you make.

Assuming you do have the time to devote to tackling the loan modification process by yourself, you must then be sure you have the knowledge necessary to present your case effectively. There are “do it yourself” kits and other resources online that try to help you prepare for negotiating the terms of your loan, but unless you are already familiar with real estate, banking, and loans, or you are superhuman in your dedication to learning all about them, you will not be able to match the knowledge of someone with schooling, training, and experience in those areas.

Essentially, your goal is to give the bank a clear picture of why they would benefit from changing the terms of your loan. As sad as it is, the bank isn’t run to be charitable toward those who are having a tough time; the bank is run to be profitable. Therefore, you need to put aside emotions and go into negotiations ready to discuss numbers, percentages, interest, and why the outcome will be a positive one for the bank. If you don’t feel you can successfully learn all of this and handle it by yourself, you might want to look into a professional third party loan modification attorney.

The biggest reason not to go it alone is that banks can be predatory, and they are much less likely to take an individual seriously. Think about if you were on trial for murder, and you were trying to defend yourself, rather than using an attorney to defend you. Just the fact that you have an expert to argue your side of the case will cause others to pay closer attention and have more respect for what is said. It’s unfortunate, but you really do benefit from having a strong ally in something as important as negotiating a modified loan.

“The best way to protect yourself is to be educated on all of the possibilities. Make sure to keep an open line of communication with your lender on the subject. If you have hired an attorney to represent you against the bank, be sure to express your concerns about any future liability,” says, Joel Jacobi, Managing Attorney at American Residential Law Group.

In the end, even with diligent research and effort, you simply cannot match the results of a professional company with resources and personnel dedicated to helping you. If you can save hundreds per month on your mortgage payment, you can certainly justify the cost of seeking a third party for loan modification.

The answer is simple. The attorney is skilled and experienced at negotiating a home loan modification. Also, the attorney can review your mortgage documents by preparing a forensic loan audit to determine if the lender committed any predatory loan practices at the time they made your loan or violated any other disclosure and truth and lending laws. If the attorney discovers any wrongdoing, he or she can use that as leverage with the negotiations of your mortgage modification. Lenders are subject to fines and penalties if they violate disclosure and truth and lending laws when making loans so they would rather find a away to approve your mortgage modification or some other solution that is agreeable to all parties.

“Homeowners need to understand the difference between the trial and permanent modification. At my office, we have a department that follows up on the paperwork that is needed to complete the trial modification.  Banks always want documentation after the trial period is up to make sure the borrower will be able to make payments in the future,” says, Joel Jacobi, Managing Attorney at American Residential Law Group.

Reasons to Use a Real Estate Attorney

The attorney can prepare the mortgage modification request application and supporting documentation for you as well as negotiate the best rate and terms on your behalf. Unless you have a lot of time to research mortgage rates and modification procedures, it is smarter to hire a professional who has a high rate of success with obtaining mortgage modifications.

Attorneys deal with the loss mitigation departments of lenders and are familiar with the practices and procedures of most lenders. By knowing the right department and persons in charge of approving modifications, the attorney will save you time and money in the approval process.

Attorneys are skilled negotiators. They have years of practice negotiating transactions. They are familiar with the banking, real estate and mortgage laws.

Attorneys can advise of you of other options to save your home from foreclosure should your lender decide that you do not qualify for a modifications. Other options include:

• Selling your home
• Short Sale
• Refinance
• Short Refinance
• Deed in Lieu
• Reinstatement
• Forbearance
• Bankruptcy (last report option)

An attorney is the only person who can legally advise and represent you.

How to Qualify for a Mortgage Modification

In order to qualify for a mortgage modification, you need to show the lender you have suffered a financial hardship, but that you have adequate funds to cover your new mortgage modification payments. There is a delicate balance that needs to be met. You don’t want to show too little income, because then the lender will not approve your modification, and you may have to sell your home. If you want to stay in your home, but have no or little equity, a mortgage modification is the best solution for you.

For the best outcome, it is recommended that you hire an attorney to negotiate a mortgage modification with your lender. While legally there is nothing preventing you from doing the negotiations, unless you are experienced with mortgage modifications or have a law degree, it is not a good idea to try and handle this yourself. You could end up losing your home if you don’t follow the lender’s procedures and provide them with the required financial information. The money you pay the attorney is well worth the results of saving your home from foreclosure.

HAMP Eligibility

The following are highlights of the HAMP program eligibility requirements:

• Applies only to owner-occupied one to four unit properties only. No investment property is eligible.

• The unpaid mortgage must be equal to or less than $729,750 (there is a higher limit for two to four unit properties, ask your loan servicer for more information).

• Loans must have originated on or before January 1, 2009, and must be a first lien.  Second lien mortgages are not eligible.

• Your mortgage payment including insurance, taxes and any homeowner association dues must be more than 31% of your gross (pre-tax) monthly income.

• You have a financial hardship and cannot afford to make your mortgage payment. It is no longer affordable for you.

• Loan modifications can only be done once under the program.

Your modification attorney can negotiate the modification on your behalf with your lender. You will need to provide the attorney with certain financial information such as copies of your last two paycheck stubs or 1099 forms, at least two months of bank statements, list of your assets and liabilities, your most recent income tax return, and a hardship letter explaining why you cannot afford your mortgage payments any longer. If you don’t have enough income, you will not qualify for the program. Your loan modification attorney can explain the income requirements to you.

Since a modification attorney is an expert at negotiating mortgage modifications with lenders, it is recommended that you hire one to assist you with your modification. You are only allowed to apply once under the HAMP program, so you don’t want to jeopardize losing your home because you forgot to submit the proper paperwork. The mortgage modification attorney works with most lenders and is knowledgeable about the process and the forms that are required so you don’t have to worry about the application getting rejected for lack of proper paperwork.  A modification attorney also has established relationships with the loss mitigation departments of lenders so the procedure will move quicker than if you were to do the negotiating yourself. If you want to achieve results and save your home, you should use a modification attorney to help you obtain a mortgage modification to lower your monthly mortgage payments.

Benefits of Using an Attorney

• The attorney understands the loan modification process.
• An attorney can advise you if you qualify for a loan modification, and can advise you of other options to save your home for foreclosure
• The attorney will review your application and help you prepare it quickly
• An attorney understands the lending and mortgage laws
• An attorney can negotiate better results because the attorney has more experience negotiating loan modifications
• The attorney can help you stop the foreclosure process or stall for more time while negotiating a modification on your behalf

Other Ways to Stop Foreclosure

If you cannot afford to make the new mortgage payment once your loan is modified, then you may want to explore other options of stopping your home from going to foreclosure. Your attorney can advise you of other methods to stop foreclosure such as a deed in lieu of foreclosure, short sale, selling your home, reinstatement, forbearance or filing bankruptcy.

If your lender has already started foreclosure proceedings, your attorney can help stop the proceedings by negotiating your mortgage modification or one of the other options that you and your attorney decide works best for your financial situation. Attorneys are good at delaying foreclosures. You may be able to stay in your home and not have to pay anything. This way you can save money to move out and rent a home until your financial situation improves.

Lenders can be difficult to negotiate with especially regarding mortgage modifications. It is recommended that you use a loan modification attorney if you are having trouble making your monthly mortgage payment. Your attorney will be able to assist you with your mortgage modification application and negotiations and will prepare any necessary documents for you. It is worth the peace of mind knowing that you have an experienced professional looking out for your interests.