This is NEW information. They must work with you if you meet the 3-requirements below and follow the 4-steps below, and submitt a letter (sample below) or they are breaking the LAW. Please pass this information on to your Distressed Homeowners and/or Sellers. This is effective IMMEDIATELY! Most distressed home owners are not aware that they have this option.
There is already a "Bailout" for home owners that was made into LAW on June 30, 2008. As you know from several of my other Blogs we have been trying to find out how and where to direct distressed Home Owners / Seller to get this help. Finally, after 3-months, I believe I have the info we need.
Below, I have itemized the specifics and "HOW TO's" for Sellers to use this New Law, Section 1403 of the New Housing Bill (HR 3221). It requires Mortgage Services to modify loansfor homeowners and help them AVOID FORECLOSURE as long as certain requirements are met. This law requires servicers to act in the best interest of all their investors and obligates them to modify the Home Owner's loan if they can afford the modified loan terms and if the lenders are likely to recover more for their investors by working with the Home Owner than by going all the way through the foreclosure process.
Here are the 3 (three) requirements:
1. Default on the mortgage either has already happened or is "reasonably foreseeable"
2. The home owner is living in the property as his or her primary residence
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.
Here is a 4-Step process for you to follow when negotiating for this "Loan Modification" with your mortgage lender.
1. Make sure you are dealing with your lender's loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. "The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan.
Please click on the below URL link for a SAMPLE letter you can use to renegotiate your loan:
Please contact me with any of your Real Estate / Relocation / Referral needs:
Pam Jank, Realtor, GRI, CRS, ABR, RRS, PPS
Previews Property Specialist
Your North Idaho Real Estate Pro
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