Loan modifcation is a very real option for the many people who are currently facing difficulties meeting repayments. Getting a home loan restructured can save you from a situation where you may be forced to sell or even worse the banks may foreclose on your property.
In the normal progression of a mortgage, payments of interest and principal are made until the mortgage is paid in full (or paid-off). Under normal circumstances until the mortgage is paid, the lender holds a lien on the property and if the borrower sells the property before the mortgage is paid-off, the unpaid balance of the mortgage is remitted to the lender to release the lien. Generally speaking, any change to the mortgage terms is a modification, but as the term is used it refers a change in terms based upon either the specific inability of the borrower to remain current on payments as stated in the mortgage, or more generally government mandate to lenders.
Residential mortgage credit quality continues to weaken, with both delinquencies and charge-offs on the rise at FDIC-insured institutions.
This trend, in tandem with upward pricing of hybrid adjustable-rate mortgage (ARM) loans, falling home prices, and fewer refinancing options, underscores the urgency of finding a workable solution to current problems in the sub-prime mortgage market. legislators, regulators, bankers, mortgage servicers, and consumer groups have been debating the merits of strategies that may help preserve home ownership, minimize foreclosures, and restore some stability to local housing markets
Under the financial rescue package, the Treasury plans to directly inject $250 billion of capital into U.S. banks in exchange for preferred shares. Nine of the largest U.S. banks were essentially arm-twisted into signing on for the first $125 billion in capital infusions.
The Mortgage Loan Modification process provides for either a permanent change in one or more of the terms of a mortgagor’s loan, which allows a loan to be reinstated if the loan is behind or past due and results in a payment the mortgagor can afford.
Lenders will need to collect all of the following documentation.
Cover letter, stating what’s in the submission package
Client Authorization Form, signed by all borrowers, one for each different lender (if more than one)
IRS Form 4506 - T, Request for Transcript of Tax Return, one for each borrower
Two months’ worth of paystubs, all borrowers
The last two years’ tax returns, all borrowers
Year-to-date Profit and Loss statements for each business owned (self-employed and entrepreneur borrowers only)
Hardship letter
Schedule of Real Estate Owned, especially if they own more than one home
1003 Loan Application
Recent appraisal or county property value assessment
Copy of personal budget for all borrowers, including everything from debt payments to utility bills, from the monthly food budget to gym membership dues, and everything else the client’s spends money on.
Florida real estate - Check the latest homes for sale in Florida. Some intersting data has been released showing Cape Coral is a hot spot for sales activity, with 4,633 sales and less than a 1 yr supply of inventory. Lee County is looking better with overall inventory level standing at 17.53 months, down from 30.57 last year. Median single family home actual sale prices were down 37.89%. Two areas that actually saw a rise in mean average sales prices in 2008; Bonita Spring-Estero and Central Fort Myers.
Some people say women have an edge over men when it comes to selling real estate, it’s an interesting subject and I think it comes down to the individual more than the actual gender of the person. I still meet people who only list with women however. It’s an interesting subject and it would be good to get some feedback on the subject. I’m sure we have seen succcess on both sides of the fence for a variety of different reasons, I think the balance is pretty even in the real estate industry when it comes to getting the job done!
Peter Schiff talks real estate on radio USA. He takes a pretty hard line on people who are trying to buy homes they simply can’t afford, Schiff claims nobody is going to make any money in real estate for at least a decade. The bottom of the market is still a long way off but prices will level off and at some point in the future real estate will once again be a good investment, we simply are not there yet. Houses could fall as much as 80% from the high prices we have seen recently. And this is amazing - 60% of people don’t know that there homes are worth less than they were 12 months ago!
Is the US economy turning the corner? A few market “experts” are cautiously calling the bottom of the cycle. Peter Schiff is not moving from his position and claims the worst is yet to come, recovery is a long way off and the market needs to self correct, the US can also look forward to possible hyper inflation and higher rates of unemployment. Is the US still heading into depression? There is also some discussion on the US percentage of share ownership which has grown, the rise of the investor class. Currently we might be looking at a “once in a generation” market rebound if you have the stomach to buy into the market today. The people who operate against the cycle and take the risks often make the largest gains..
Donald Trump is talking about getting out of New york, heavy taxes may push the rich out of New York to other statesor even other countries. Trump claims he’s spoken to at least 25 - 30 people who plan to leave if the new tax hike becomes a reality. The world is a big place with plenty of options when it comes to operating a business so why would you remain in a city or country that puts a target on your back? Some would argue your much better off giving these people an incentive to stay…
Detroit real estate has suffered large percentage drops over the last 12 months. Probably the largest of all the major US cities. Home prices are now well below the year 2000, short sales are becoming popular as are foreclosure sales and some homes have even been advertised for as little as 1 dollar.
Fort Lauderdale Real Estate - A city known for it’s climate, waterways and amazing homes has not been spared during the real estate downturn. Location and climate means there will be some good opportunites to invest for future price growth.
Fort Lauderdale real estate prices / against national average (right)
Turnover (Sold Within Last Yr.): 2.4% 2.2%
Property Tax: $5,344 $2,861
Median Condo Value: $275,000 $216,500
Median Single Family Home Value: $277,500 $234,000
Median 1-Bedroom Home Value: $159,000 $196,500
Median 2-Bedroom Home Value: $222,000 $205,000
Median 3-Bedroom Home Value: $310,500 $231,500
Median 4-Bedroom Home Value: $569,000 $337,500
How Fort Lauderdale looked in 2007
Estimated median household income in 2007: $52,264 (it was $37,887 in 2000)
Fort Lauderdale: $52,264
Florida: $47,804
Estimated median house or condo value in 2007: $370,300 (it was $132,600 in 2000)
Fort Lauderdale: $370,300
Florida: $230,400
Miami Dade foreclosures - The news is not all bad if you take the time to do some research, there may be a legal loophole for home owners seeking to avoid foreclosure in the Miami area. A group of lawyers has come together to help home owners who are in trouble, the sale contract has a lot of fine print and in many cases there are legal ways to help people facing foreclosure.
Rick Santelli speaks his mind on the current housing / stimulus policy. “The government is promoting bad behaviour” by handing out money to bail out people who can’t afford the homes they are in. “Reward people who carry the water instead of drink the water”. Santelli calls it like is and you have to give the guy some credit for that.