Below are the 5 most recent journal entries recorded in tristianbddavis' InsaneJournal:

Sunday, March 27th, 2011
5:47 pm	The Loan Modification Process and The correct way to Get One With the economy the way it is, many families are struggling to keep their homes. It is believed that almost half of all homeowners in the United States are in financial difficulty. Getting your loan modified is one way of insuring you can pay your mortgage. In normal times, when there are just a handful of foreclosures every day, the banks can absorb it. They just write those off and go on their way. However, when times are bad, or when times are really bad like they are now, not even the banks can ride it out. There is no way that the banks can keep foreclosing on homes at the current rate. This financial crises is affording the battling homeowners an opportunity to rectify their financial problems. This opportunity comes in the way of a loan modification. Loan modification is a way to modify the terms of your loan so that you wind up with payments you can afford. It is not to be confused with re-financing. In loan modification, someone works with your bank to cut the interest rate, and sometimes even the principal, down to something that's manageable. These cuts are often dramatic, 30%-50% in many cases. You can represent yourself in the loan modification process, but even seasoned loan modification attorneys get told “no” by the banks more often than not. If you are working with a lawyer who knows what he or she is doing, they will keep asking until they are heard. When it comes down to it, the banks know when they are dealing with someone who understands the procedure and they tend to be more receptive to the idea of working out some kind of deal. Loan modification has been in the news recently, and some reporters have said it doesn't work. They base this assumption on the fact that some people who have gotten loan modifications wound up back in trouble six months later. In these cases, it is normally found that the bank gave a token reduction in payment instead of a real loan modification. However, there are now experienced loan modification specialists dealing with this process and the loan modifications are becoming more successful than ever before. Choosing a loan modification company is quite tricky and there are a lot of shady loan modification outfits out there right now to choose from. A good example of this is a company that works on a "best effort clause", this means they will make an effort to modify your loan but they offer no guarantee. As long as they have contacted the bank and put out their proposal, they consider their job done. If the company you're looking at doesn't offer a guarantee, then don't go with them. That is the plain and simple truth about choosing a loan modification company. Loan modification companies don’t get confused with the terminology your bank uses when talking to them. They are on the same page as your lender and know what needs to be done to get you approved. They also know what a good loan modification is and what a bad one is. In this regard, they will know which offers to accept and which to decline. They can save you hours of negotiating by taking care of the entire process on your behalf. A good loan modification company can do “instant” loan modifications with several major lenders. If this is achieved, the process can be completed in less than a week. The lenders include Bank of America, Countrywide, EMC, Wells Fargo and more. If your lender is one of the above mentioned you should definitely contact them regarding a loan modification. They will gather some quick information, get authorization to speak to your lender and call them up. They will know right away if you are approved, what your interest rate will be and what your payment will be. They will then ask you if you want to go ahead with the loan modification based on the information they give you. If you are not happy with the terms of the loan modification you can look at other alternatives such as a short sale . There are no risks involved with this program, unlike other companies that charge up-front fees and take months to get you any information. If your lender is not one of the major lenders listed, there are other program available to you. There are companies that have experts on the HAFA program (the Obama mortgage plan) and know how to get you qualified if you are within the "window" or close to it. With this program, you can reduce your monthly payments, including taxes, to 31% of your net monthly income. This is done by reducing the interest rate, extending the terms and/or reducing the principal. It goes in that order until the cap is reached, so lowering the interest rate and extending the terms are necessary to get it there, balance reductions are rare. The whole point is to lower your payments so you can afford to stay in your home. Current Mood: nauseated Current Music: Indy (Comment on this)
5:16 pm	Facts about the Home Affordable Foreclosure Alternatives Program (H.A.F.A.) Homeowners whose mortgages are higher than the property’s market value and who cannot afford the mortgage payments because of job losses, or any other reasons, are faced with the decision to either short sale their home or just let the bank foreclose. It is far more beneficial for them to short sale their homes and with the new H.A.F.A program in place, the benefits became even greater. The Home Affordable Foreclosure Alternative ( HAFA ) Program, aims to streamline the short-sale process in an attempt to reduce foreclosures. Short sales, transactions in which a lender accepts a payoff less than the balance due on a home loan, have become more common as the housing market soured. It is estimated that about one in every four homeowners owe more on their home loans than their homes are worth. The degree to which the program catches on remains to be seen. Homeowners and real estate agents are still familiarizing themselves with the new program. There is also mixed feelings about what impact it will have on community banks. This new government program was implemented to help distressed homeowners avoid foreclosure by allowing a short sale of their homes without any long-term negative consequences. This is a really good option for homeowners who qualify. Homeowners get 120 days in which to short sell and they are also given the option of renewing the listing for one year if required. The entire time you are in the program the servicer will not foreclose on your home. Another benefit is the fact that the servicer and investor of your mortgage are accepting full satisfaction in the short payoff. Therefore, there can be no deficiency judgment or promissory note asked of the homeowner. This is the true selling point for HAFA. The Obama Administration's Home Affordable Foreclosure Alternatives Program, which officially launched on the 1st August seeks to streamline and standardize the short-sale process to help banks and homeowners avoid foreclosure. The program includes incentives for qualified homeowners and real estate professionals such as; The homeowners can receive up to $3,000 in relocation costs. This incentive makes it less likely that owners will damage the house on the way out, this is common in foreclosures. Any future liability of the homeowner is released after the home is sold or deeded back to the bank. This means they can't be held responsible for the lender's loss on the loan. Servicers cannot ask real estate agents to discount their commissions. Servicers can receive incentives from $1,500 to $2,200 for successfully completing a short sale or deed-in-lieu-of-foreclosure. A total aggregate of $6,000 will be awarded to all lien holders in order of lien priority, this means that secondary lien holders can get up to 6% of the outstanding principle balance. On paper this program seems to be a perfect solution to the housing crisis. It will decrease the number of foreclosures, streamline the short sale process , and standardizing the forms used by all participating mortgage servicers. This program can be seen as the first step in repairing and reversing the many housing issues the United States are experiencing. If you decide on doing a short sale , you need to hire a Realtor. The lender requires it. It is important to pick the best Realtor because this will determine if you will have a comfortable and even pleasant or frustrating and disappointing experience. When embarking on this process it is also always a good idea to seek out the services of an attorney and a tax professional. The other benefits of short sale are; You can buy a house immediately if you are not behind in your payments. However, if you are behind in your mortgage, you may have to wait for 2 years. On submission of a short sale package, the foreclosure proceeding will be postponed and the homeowner will be given 2 - 4 months to complete the transaction. You will not have the stigma of a foreclosure on your record. Your credit score will only decrease by 30-200 points depending if you are behind in your mortgage or not. You can easily build up your credit by supplanting with good payment history, low credit balances and so forth. When you apply for a loan, you do not have to disclose that you had a short sale whereas if you had foreclosure you have to disclose it. Not disclosing a foreclosure when applying for a loan is a federal offense. You may be able to negotiate with your lender to forgive the equity loan or non-purchase money loan. If the lender will not forgive the debt, you may be able to reduce the balance considerably. Current Mood: nauseated Current Music: Indy (Comment on this)
4:14 pm	Forclosure Alternatives for Homeowners The foreclosure process Foreclosure is terrifying to most homeowners. Their options are limited and in non-judicial states, homeowners need to make decisions very quickly. However, the foreclosure process can be stalled for as long as 5 years in judicial states. When facing foreclosure, the homeowners have four different options available to them that could solve their dilemma. The foreclosure process in non-judicial states can be as rapid as 30 - 45 days. In non-judicial states it is very easy for the lender to foreclose quickly however, the lender cannot get a deficiency judgement against the homeowner. This varies state-by-state so it should be investigated by each homeowner. In judicial states, the lender must take their foreclosure through the court or judicial process. The process was designed to take place in 90 - 120 days after which the courthouse auction would occur. Realistically, because of backups in the judicial system and stalling measures by attorneys, the process can take years. Thousands of Americans are behind on their mortgages. They are in a situation where they can either pay the money that will never be payed back, or they can take the option known as a strategic default. This is where they simply stop making their mortgage payments. However, before the homeowners take this action, they should be made aware of the other four most common alternatives they have. Mortgage Modification The method that is most commonly used is a loan modification, however, this is usually the least successful of the alternatives. In this situation, the homeowner requests a reduction in his monthly mortgage payment to meet his budgetary needs. If the homeowner is unemployed there is no chance of his request being granted. However, in instances where the mortgage is greater than the property's value, the lender may agree to make the mortgage payments smaller for a short while. Seldom do lenders do principal reductions which would result in more homeowners being able to keep their homes. Loan modifications ultimately result in mortgage default in over 70% of the cases they are granted and the lenders know this, hence their hesitation to grant them. It is the general consensus that loan modifications are only given for publicity purposes and as a show of goodwill. Short Payoff and Short Refi The next alternative is what is known as a short pay. In this instance, the lender can offer the homeowner a principal reduction and in return the homeowner must pay off the reduced mortgage within three weeks in cash. These are becoming more and more common as they save the lender time and money over doing a foreclosure. A 66% principle reduction is what is commonly being granted at this time. Short Selling your Home The next option available to the homeowner is a short sale . If this option is chosen, the house is sold and the homeowners vacate the property. The benefit of this option is to stop the imminent foreclosure from destroying the homeowners credit. This will allow the homeowner to purchase another property in a shorter time than if he had been through the foreclosure process. Another benefit of the short sale is that the homeowners can stay in the house without making any mortgage payments until the process is complete, this could take anywhere from three to nine months. Deed in Lieu The final tactic for a homeowner is to give the lender a deed in lieu of foreclosure. Instead of the lender going through the cost and time of the foreclosure process, the homeowner deeds his home to the lender. When taking this option, the homeowner can ask the lender for money to move out, this is called the "keys for cash" program. This cash can range from $1,500 to $10,000+ depending on the value of the property and what condition the homeowner leaves his home. With all the problems that lenders have had with improper foreclosure procedures and invalid documentation, the lenders very much want the homeowner to sign over his property with a deed in lieu of or do a short sale. These options also stop any future court action against the homeowner as the home was voluntarily given up. When it comes to the lenders, they prefer the short pay option as this saves them the trouble of trying to sell their properties at what could be a larger discount. To make the best decision for your future, it is always a good idea to review your personal situation with legal aid services. Going broke to keep your mortgage is never more important than your credit. Your credit can always be repaired, your well-being can be much harder to fix and take a lot longer. Current Mood: nauseated Current Music: Indy (Comment on this)
11:17 am	All You Need To Know About a Deed in Lieu of Foreclosure Deed in Lieu of Forclosure A quick and easier way to deal with a defaulting home loan is a deed in lieu of foreclosure. It is easier for the lender as well as the borrower when you compare it to a formal foreclosure. This process sees the borrower voluntarily handing over his keys to the lender. Previously the borrower had to go through a lengthy foreclosure process but this is not imperative any longer. The process of handing over the keys generally releases the borrower from most of the obligations attached to the defaulted loan. Such obligations include side effects such as public notoriety. Although the procedure cannot save the home, the deed in lieu of foreclosure has a comparatively lesser negative impact on the borrower’s credit rating than what a mortgage foreclosure would have. This leaves the borrower a better chance of getting a subsequent loan. The deed in lieu of foreclosure can also lead to your debt or deficiency being forgiven. This process also makes it easier for the borrower to get another mortgage loan in the future. The lender is under no obligation to accept the deed in lieu. However, if the value of the property is at least equal to the over-due mortgage value, it would be in the lenders best interest to consider bypassing unnecessary time consuming foreclosure procedure. The merits of handling a defaulting home loan in this manner is that the lender can take control of the house immediately, whereas earlier he had to wait for the lengthy legal procedure to be finalized. This in turn means that the borrower cannot remain on the property during the deed in lieu process. This prevents the house from being sold for a profit during the foreclosure process. The borrower is not in a position to get the go ahead for a deed in lieu foreclosure. Only a bank can make such a decision and it is at the bank's discretion. To keep things in control it is advisable to communicate with the bank at the earliest signs of your financial troubles. The Deed in Lieu - Avoiding Foreclosure Different mortgage companies have different rules. Typically, the mortgage company requires the home to have been listed with a real estate agent for a minimum of 30 days and to be free from any liens. Sometimes the mortgage companies insist on the property being vacant. Various other companies might require an interior appraisal of the property which should be done 60 days prior to a foreclosure sale. The definition of a Deed in Lieu of Foreclosure is as follows; it is a disposition instrument in which a home owner voluntarily deeds the mortgaged property to the lender in exchange for a release from all obligations under the mortgage. The one drawback of this process is that the borrower relinquishes all rights to the proceeds of the sale that are in excess of the over-due balance. The homeowner has to forfeit any claims on surpluses if the property sells for more than the outstanding mortgage. However, a lender cannot initiate a deficiency judgment in case the property fails to fetch the money to sufficiently cover the loan balances. Sometimes properties that could not be sold in auctions are also accepted by lenders against deed in lieu by the owners. When the title deeds are in lenders' name, he becomes the legal owner of the property. It is important for the defaulting home owners to know how long a deed in lieu of foreclosure will take to conclude. Once the foreclosure process has began, the homeowner will be forced to uphold definite time frames. This means a deed in lieu of foreclosure must be complete within three months' of its commencement. Additional things to consider with a Deed in Lieu A home owner should consult a tax practitioner before deciding on deeding out his home in lieu of foreclosure . Though this is referenced to as a friendly foreclosure, you should make sure of your obligations or the absence of them. A lender will most often pursue a deed in lieu for foreclosure when the borrower lacks any assets to make pursuing a deficiency judgment worthwhile. If the property in question is worth more than the amount owed on it, the lender would be better off to simply liquidate the property rather than pursuing a deed in lieu of foreclosure. Once the lender has started the foreclosure proceedings, the lender and the borrower can decide to execute a deed in lieu of foreclosure. Securing a deed in lieu of foreclosure takes place outside the judicial system and is settled out of court. A deed in lieu of foreclosure will benefit the lender by saving on the costs of a formal foreclosure proceeding and allowing them to resell the property and get a paying occupant so they can get back some of their original loan. The benefit to the borrower is not having his credit rating marred by the foreclosure of the property. Current Mood: nauseated Current Music: Indy (Comment on this)
Monday, March 7th, 2011
2:43 pm	Short Sales - Understanding the Short Sale Process When housing prices in many parts of the country were booming a couple of years ago, there wasn't much national attention given to short sales. However, a lot of homeowners are now looking at the short sale process as a way of avoiding foreclosure. Basically, the definition of the short sale process is when the lender of a property allows the property to be sold for less than the amount due on the mortgage loan. With this process, the homeowner benefits by avoiding the damage to his credit report associated with a foreclosure. A foreclosure takes a financial and emotional toll on the homeowner and can stay on his credit report for up to ten years. But the pitfalls of the short sale process should be considered as well. The I.R.S could view the debt forgiveness as a taxable income leaving the homeowner with a tax liability. In addition, lenders can often pursue a borrower for the deficiency balance which is the difference between the amount owed and the amount paid. The only way the homeowner can avoid taxation is by proving he is insolvent. But if insolvency is unsuccessful, and you are faced with a tax liability resulting from the deficiency amount, it may make more financial sense for you to let the lender foreclose. The short sale process can vary, but it generally works in the following way. The homeowner will contact the lender to discuss the possibility of a short sale and to determine what the lender wants to complete the sale. The seller then issues a letter authorizing the release of personal information about the loan and the property to the buyer or escrow agency. The lender will then have a chance to review the settlement statement which indicates the proposed selling price, the remaining loan balances and all itemized expenses including the real estate commissions and other fees associated with the closing. The seller will also complete a "hardship letter," which will detail and explain all his financial difficulties. Lenders will usually want to validate the seller's financial situation by looking at bank statements, investment accounts, along with examining pay-stubs and other financial records. The lender will then look to the broker to provide a price opinion by examining the condition of the house and the market value of comparable properties. The lender will then carefully examine the purchase agreement to make sure that all the amount are reasonable and that he is happy with the real estate commission. Because of the documentation required, the short sale process can be lengthy. But if done correctly, it can work well for all parties involved. The lender avoids the uncertainty of the foreclosure process, the seller avoids a foreclosure on his or her credit report, along with potential bankruptcy, and the buyer hopefully got a good deal on a property. It is always best to educate yourself on the short sale process as it is quite complicated. If you are considering a short sale, make sure that you discuss your situation with a competent lawyer and accountant. The more educated you are on the process, the easier the transaction will be, and the better the impression you will make on the lender. Buyers are embracing the short sale process as it is making it easier for them to find properties at a low selling price. With a bank owned property, the bank already owns the asset and can make decisions quickly about the approval of the sale because they have already written down the loss on the property. As a buyer of the Short Sale there are several factors you must first be aware of in the purchase of a Short Sale asset. You first must ascertain whether or not the value at which the home is listed for is a realistic price. Always remember that the bank will do their own evaluation of the home and if they feel your offer is not in line with what they think they can get for the property it will get foreclosed. The best solution is to get a realtor to do a broker price option on the property. This will insure that you are not wasting your time and will also give you a great piece of supporting price evidence to submit along with your offer. The chances of the sale going through increase with each piece of information you supply the bank. The buyer should also ensure that the seller is making an effort to get the short sale approved on his behalf. You also need to find out if the seller already has a pre-approved short sale. It is relatively easy to check the status of the home as the information is all on public record. Short sales can present the buyers with great value and if done correctly, it can feel like they have hit the lottery. Current Mood: nauseated Current Music: Indy (Comment on this)