January 28th, 2010
The struggles in the Obama administration´s Making Homes Affordable (HAMP) just continue to frustrate all parties involved in the process: lenders, homeowners and the government. When conceived the goal was to “save” 4 Million homes from foreclosure. As of December 2009, only 66,000 homeowners have been issued permenant mortgage loan modification with 850,000 in “temporary” status. Note that temporary does NOT prevent your lender from continuing the foreclosure process. The major lenders (BOA, JPMorgan, Citi and Wells Fargo) account for more than 60 percent of the 3.4 million mortgages eligible for the program. JPMorgan, the most successful, has only converted 13% of eligible mortgages. To appreciate the magnitude of the issues currently being faced, read more here: Flaws plague foreclosure relief program/a>
Please contact us if you would like asssitance on your home loan modification: http://www.nexusadvantageservices.com
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November 25th, 2009
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November 24th, 2009
If you do not qualify for a loan modification under the Fed´s guidelines, an alternative option is a “short refinance” loan to avoid home foreclosure.
A short refinance is when your current lender agrees to write down the balance you own on your mortgage, often due to a drop in the fair market property value. Your lender issues a payoff for an amount that is less that what the current loan balance is. This obviously requires negotiations with your current lender. You will also need to demonstrate to your lender a financial hardship case. The fact that your property value has declined (as with many others) is not sufficient justification alone.
Your lender may consider this to be a desired option to minimize the loss that would occur if they have to take your loan into foreclosure. While your lender will lose money on a short refinance, it does provide for a steady flow of revenue and it avoids further losses, particularly legal and other fees related to the foreclosure process.
Generally you will still pay the remaining principal that is rolled into the short refinance, with the difference with the initial mortgage loan being primarily interest. Your credit rating will be impacted somewhat, but it will be less harmful than going into foreclosure.
For additional information about your alternatives to avoiding a property foreclosure, please contact us at:
(http://www.nexusadvantageservices.com)
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November 20th, 2009
Will a home loan modification affect your credit score? The answer is YES.
If you making a loan modification under the Federal Government Home Affordable Modification Program (HAMP) or Making Homes Affordable (MHA) your credit report will be listed as “loan modified under a federal plan”. This will not have the negative impact of an entry like “partial payment”, which can reduce your credit score 100 points.
Your bank will report your mortgage loan as “current” if you are current with your mortgage payment and through the loan modification trial period. However if you were initially late on your mortgage payments prior to receiving the loan modification, your credit report will not eliminate the late payment entries. At the completion of the loan modification trial period, once permanently approved, the loan will be considered “current”, but the previous entries in the credit history will remain.
FICO, the credit reporting agency, is currently studying the long term outlook on these loans and has not as of yet decided on an appropriate score assessment. They will wait for one year to gather data and will then retroactively adjust your credit score accordingly.
If your loan modification is not through the federal programs, then your lender will report to the credit agencies using their own policies. Even if there is no negative hit in the credit score, the “loan modification under a federal plan” will still be visible on your credit history and may affect a future lender´s decision.
For additional information, please contact us at: (http://www.nexusadvantageservices.com).
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November 17th, 2009
A home loan modification may help you avoid home foreclosure. Since the “Making Home Affordable” plan was introduced in early 2009 to save the imploding real estate market, thousands of homeowners have applied, with various results (average, poor and hidiously bad). The majority of the homeowners complaints as one would expect are with their lenders.
One would assume that since it normally in the best interests of the lender (bank) to modify a bad loan into a good loan instead of taking a loss with a property foreclosure, that the lenders would be doing a better job (i.e., service) with there existing customers. Unfortunately this is a wrong assumption.
Consumers have reported waiting months only to find out that they have been denied the loan modification request. Or, for those lenders that require a “trial program”, normally three months, where the homeowner is required to demonstrate that they can consistently pay the adjusted (lower) monthly mortgage payment, the homeowner is still denied the loan modification at its conclusion. Hopefully you may find that your lender is easier to deal with.
Since your lender will need to comply with FDIC guidelines when considering loan modifications, and the FDIC has paid out billions of dollars due to the bank failures, some of the inflexibility of the lender may not be solely of their own choosing. Also note that banks need to “front-end” many of their legal expenses related to property foreclosures. Issuing a loan modification does not help the lender recoup these expenses.
If you do start the loan modification process make certain that the information that you provide is consistent with your initial mortgage loan documentation. If there are discrepencies, your lender may consider your initial mortgage loan was granted under fraudulent conditions and likely will pursue an alternative course of legal action. Also, remember that your contact information should be updated with your lender in the event they need to contact you in the process of granting your loan modification.
For additional information about your alternatives to avoiding a property foreclosure, please contact us at: (http://www.nexusadvantageservices.com)
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November 16th, 2009
Your Hardship Letter is intended to help your lender understand the circumstances that led you to the financial position that you find yourself in. It is one of the most important elements of your loan modification application. It needs to be honest, straightforward, descriptive and concise. You need to describe what steps you have taken to remedy your financial situation, whether this is a temporary or permanent change and that if your loan modification request is approved, that you will be able to stay current with your mortgage payments. Listed below are common financial hardships:
• Military service
• Business failure
• Divorce/Separation
• Incarceration
• Death of spouse
• Disability
• Reduced income
• Too much debt
• Unemployment
• Medical bills
• Job relocation
• Illness
• ARM payment shock
Listed below are the basic questions your lender will require that you answer in your hardship letter to convince them you are a good risk for a loan modification:
• What changes/events have occurred that have caused you to fall behind in your mortgage?
• When did these occur?
• How did these affect your ability to afford your mortgage payments?
• Do you anticipate any improvement in your financial situation in the near future?
Remember that your lender is being flooded with loan modification requests. Write the Hardship Letter well.
For additional information and sample Hardship Letters, please contact us at: (http://www.nexusadvantageservices.com)
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November 12th, 2009
Are you in a bad situation and dreading to receive the official home foreclosure notice? Well, hoping that it won´t arrive in the mail because of the holiday season is not the best way of dealing with a very bad situation.
If you do not see in the very short term a change in your financial situation to allow you to make up your pending home mortgage payments, you should consider the alternative of a home modification loan. The home mod loan, if approved by your existing lender, will reduce your monthly payment to a level that will be affordable for you, possible waive existing penalties (or worst case, have them bundled in with the new loan amount) and allow you to avoid foreclosure on your home, probably your most important asset. You will then sleep better at night.
For additional information about getting your home modification loan and avoiding foreclosure on your home, please contact us at: (http://www.nexusadvantageservices.com).
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November 11th, 2009
A loan modification is a change in the terms of a loan, interest rate, amortization term, or principle balance, which is agreed to by the lender and the homeowner. These new, legally binding terms permanently replace the original mortgage terms and can give you a fresh new start in managing your mortgage payments. The outcome of a loan modification is a more affordable payment for the homeowner.
A loan modification is a relatively new option for existing homeowners. With the recent “economic crash” in the real estate market in the US there are many homeowners who can no longer afford to pay their monthly mortgage loan. Generally this is related to some type of financial “hardship”. The Federal government has provided funds to the mortgage lenders (banks) to be “open” to adjusting mortgage loans as an alternative to a home foreclosure and associated costs.
What is in it for you? Reducing your monthly mortgage payment to where it is affordable for you to stay in your home and avoid foreclosure. Since your home is probably your most important investment, it is worthwhile exploring this option if you are or expect to fall behind in your mortgage payments.
For further information, contact (http://www.nexusadvantageservices.com).
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November 11th, 2009
Is this about CSI and dead bodies? Well…
It is about CSI in the sense that there is an investigation of sorts. It isn´t about dead bodies, unless you feel that way about your home mortgage these days.
What is a Forensic Loan Audit?
This is a type of audit performed by attorneys (at considerable cost) with the purpose of identifying whether in the process of issuing your original mortgage loan, there were legal violations. If violations are identified, this will allow leverage in your negotiations of a loan modification as an alternative to litigation of the lender. Violations may be related to the Truth in Lending Act of 1968, the Real Estate Settlement Procedures Act and the Fair House Act, among others.
Why might this be important to you? Well, if you suspect that there were violations on your original mortgage, you will have significant leverage (negotiation power) with your lender at the time of negotiating a loan modification. Remember that knowledge is power in negotiation.
For additional information you may contact us (http://www.nexusadvantageservices.com).
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November 11th, 2009
The Nexus Advantage Services information blog is dedicated to providing information regarding home mortgage loan modification and refinance services. We hope that you find the information useful for whatever your home mortgage needs are.
We welcome your comments and questions.
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