The one reality about today's Phoenix & Scottsdale Housing Market is that many people have more questions than answers. As a Phoenix & Scottsdale CDPE (Certified Distressed Property Expert), my primary goal is to help people stay in their homes. I hope you find this information to be helpful to you, or anyone else you may know that is facing the loss of their home.
LOAN MODIFICATION
A Loan Modification is a process through which your mortgage lender changes:
-Your Interest Rate
-Your principal balance (through a reduction)
-Your Loan Terms (example: from an adjustable to a fixed rate)
-Any or all of the above
This process will often allow a borrower who can no longer afford their home at their current mortgage payment to stay in their property.
LOAN MODIFICATION Q & A
Why would a lender modify my mortgage?
Lenders have realized that in some cases it is better for them to work with their current borrower to lower their payment or possible improve their property. The average foreclosure can cost a lender from 35 to 50% of the value of a property (or more) so keeping a borrower in their home is better for everyone.
What do I need to qualify for a Loan Modification?
According to the Making Home Affordable Government Website you will need the following information for your lender to consider a modification:
-Information about your first mortgage, such as your monthly mortgage statement
-Information about any second mortgage or home equity line of credit on the house
-Account Balances and minimum monthly payments due on all of your credit cards
-Accont Balances and monthly payments on all your other debts such as student loans and auto loans
-Your most recent income tax return
-Information about your savings and other assets
-Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
-It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable
How do I qualify for a Phoenix or Scottsdale Loan Modification?
The first call you make should be to your lender. Make sure you have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking about you can ask to be referred to one of the following departments (different lenders have different names for this department):
-Loss Mitigation Department
-Mortgage Modification Department
-H.O.P.E. Department
Prior to contacting your mortgage lender, you can quickly complete an eligibility test at Making Home Affordable Government Website. This test will let you know if you are eligible for a modification through the government sponsored Home Affordability and Stability Program (HASP).
Click Here for a list of mortgage lenders and servicers with contact information you can visit.
What is a Home Affordable Refinance?
If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments. The qualifications for a Home Affordable Refinance, according to the resources released by the government, are:
-You are the owner occupant of a one to four unit home
-The loan on your property is owned or securitized by Fannie Mae or Freddie Mac
-At the time you apply, you are current on your mortgage payments (current means that you have not been more than 30-days late on your mortgage payment in the last 12 months or, if you have had the loan for less than 12 months, you have never missed a payment.
-You believe that the amount you owe on your first mortgage is about the same or slightly less than the current market value of your house
-You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan.
Where can I find more information on Loan Modification in Phoenix & Scottsdale?
Here are a list of Loan Modification Resources:
-www.MakingHomeAffordable.gov (check your availability and see Frequently Asked Questions)
-www.HopeNow.com (List of lenders and services with contact information)
-Fannie Mae (1-800-7FANNIE, 8 a.m.-8p.m. EST) or www.fanniemae.com/loanlookup
-Freddie Mac (1-800-FREDDIE) 8 a.m.-8 p.m. EST) or www.freddiemac.com/mymortgage
Should I hire a 3rd Party for a Scottsdale or Phoenix Loan Modification?
If you are considering a Scottsdale or Phoenix Loan Modification, you have probably started to notice companies that advertise they will help you negotiate and lower your payments and possibly your mortgage balance. You should be very cautious when proceeding with any of these organizations.
According to a recent White House Press Release, "One tip-off that an offered service may be a scam is that it asks homeowners to pay upfront fees, officials said at the news conference. They stressed that none of the new programs announced by the Obama Administration in recent weeks required any upfront fees".
When engaging with a third party for help with a Scottsdale or Phoenix Loan Modification you should:
1. Make certain they are not charging up-front fees.
2. Be very cautious as to the organizations affiliation. Many companies include words like "Federal" or "Government" in their names, but are in no way affiliated with the government.
3. If the organization claims to be affiliated with the government or with the Obama Admnistration, ask for their website and check them out.
What if I don't qualify, can't afford my home, and owe more than it's worth?
You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Our company, Summit Home Consultants, has undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Visit our website for more information on the short sale process.
MOST IMPORTANTLY, DON'T DELAY
If there is one thing I want you to take from my blog today, it's this advice: Whatever you do, don't delay!
Each day is important when you are exploring options on your mortgage- don't wait one day that could be spent working with your mortgage servicer or lender on finding a solution to your specific issue.
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