But how does one restructure their mortgage? How are homeowners suppose to lower their mortgage payment with a loan modification.

Should a homeowner hire a third party to modify their home loan?

There has been a remarkable number of homeowners who have been ripped off by so called loan modification companies. These for profit outfits have been sprouting up every where. They charge hyomeowners 1500-7000 dollars for results that any monkey pushing buttons can achieve.

It is extremely hard for homeowners or anybody for that matter to tell which modification services are legitimate and which are bogus. This can present a real headache. Where are Homeowners suppose to turn for help obtaining a loan modification?

It is likely that  some of the small attorney offices locally are a good place to check but don’t just head down to the first one you see. It would be wise to only check with the ones you have heard first hand does good work. Another downside to this route is the cost. These guys are generally the ones charging between 5000-7000 dollars. They are used to making that kind of money and they have invested in the education needed to be a lawyer.

Now having said that if your situation is one in which you hold a mortgage of 750 to 800 thousand or more than you may want to hire a local attorney to work on the modification for you but you need to be sure that you are talking to the actual attorney and you should expect to pay at least 5,000 and most likely more.

However this is not a likely scenario most of us have a much smaller mortgage. The best thing to do first is to check in with a local housing counselor.

There is a great article on the Home Affordable Modification Program called Choose Affordable Mortgage Modification which highlights the benefits or reasons that homeowners should initially focus their efforts towards the Obama loan modification program which offers homeowner a streamlined mortgage solution through modification.

The California mortgage payment assistance will cover eligible unemployed CA homeowners with the monthly mortgage payment for up to 6 months. The program is officially known as Unemployment Mortgage Assistance or UMA.

The Hardest Hit fund provided about 700 million dollars in financial aid to the state of California. That money was used to create four foreclosure prevention programs. This program is only one of the four.

Read more about California Foreclosure Assistance

This new blog in the works is said to focus on bringing as many debt help related bloggers together as possible in an effort to make a dent in the impossible debt niche.

It is called the Loan and Debt Assistance Blog and will be found on a blogspot domain….

LoanDebt.blogspot.com

There is no plans to make any more complicated than that.

Many American homeowners are having trouble making their monthly home loan payments. This is no surprise to most. The turmoil of financial hardship in this country are no longer kept quiet. We are all aware of the housing and home loan crisis.

Though most of the consequences of over spending and borrowing are negative, if you look closely, you can find a bright spot here and there.

One bright spot is the new awareness and trend of proactive homeowners and consumers. Borrowers who need help due to a financial hardship are taking steps to tackle their financial hardships earlier and sooner than was typical of past behavior.

Borrowers are taking action sooner, and they are able to stop the bleeding earlier. They also are able get the help they need sooner. This means better credit, lower payments, and an all around healthier economy and American consumer.

Let us hope that with the new year more homeowners will be able to stop foreclosure and a cure to what must seem like hopeless hardship.

Websites Recommended

www.Hud.Gov

• Provides a lot of foreclosure info
• A lot of to info is a bit hard to understand but there is a wealth of information

MakingHomeAffordable.Gov

This is the official site for the Obama homeowner help program for homeowners who need to stop foreclosure and make home affordable.

What do these sites offer…

• Loan Modification news and info
• Debt Help and relief info, links, and resources
• Opinions
• News and Opinions related to Obama and other related topics
• Video
• Links to foreclosure help resources
• Information on how to stop foreclosure
• Reviews and links to foreclosure prevention and loan modification service providers and directories for such service providers
• Hope For Homeowners information
• Information on how to stop foreclosure
• Reviews and links to foreclosure prevention and loan modification service providers and directories for such service providers
• Hope For Homeowners information

Well it seems as if President Obama is now getting what he has so patiently waited for all these years. Obama is taking a shot at the entire credit Card Industry. He has managed to get several legislative restrictions to pass through both the house and Senate. He will undoubtedly sign it. 

Some are saying that we as Americans are going to far to quick and getting carried away on a ”big Government kick”. Should we be able to tell Credit Card Companies that they have to limit interest rates and fees to a certain amount. What happened to the free market creating the price. After all there is quite a bit of risk involved for the credit card companies.

For instance American Express, who has perhaps the most credit worthy clients out of all major credit card companies, has an 8% default rate. That means one out of every twelve dollars they are expecting back they don’t get. That’s a lot.

Many Credit Card Companies have much higher default rates. One such company which is much smaller than American Express and only focuses on small Business Credit Cards has decided to call it quits because of the Obama move against the freedoms of the Credit Card Companies to get the interest rates they can get.

 They had a default rate of 16%. They also had one of the best customer satisfaction reputations in the industry. They are gone from the Credit card world. That will no doubt have an effect on the small business world.

I wonder how that helps any of us. How many jobs were just lost…will be lost?

Sometimes it might be better to push credit card companies and others like or similar to ease up on things during hard times such as these but to actually force your hand on an industry that loans money in an economy like this and in a supposedly free country like this a bad idea. This is especially true when you consider the consumer will not see any of the benefits until two years from now and until then we will just see the Credit Card companies super charge fees and pull back on risk.

I think Barrack Obama had it right with the mortgage companies. He worked with them not against them.

His mortgage assistance plan created to help homeowners make home affordable via loan modification, mortgage refinance, and other loan workout deals, has worked with lenders as well as for homeowners.

Perhaps his problem with the credit card industry is not so much with the terms of the revolving credit card accounts but rather the unscrupulous deceit that is involved in all the calculations of fee’s and interest that are not at all what the borrower originally signed up for.

Despite being a gun ho free market advocate I have to admit that well… maybe he has a point. Maybe if corporate America was able to reign in on their own practices and watch themselves instead of spending big bucks on resources that exist only to exploit the system for all it is worth, then maybe Obama would not have a problem.

Then the credit card companies that like to pose as innocent victims of big Government and uncertainty may not be in this mess in the first place. After all it seems that these new regulations do little more than try to prevent the credit card companies from hiding how and how much they are charging their clients. That is starting to seem rather reasonable.

We have to work with Business not against them. But Business has to work with us not against us.

Perhaps a Credit Card Bill of Rights for Consumers is not such a bad idea after all.

Related Articles

How Credit Card Companies Make Money

DIY Debt Management Plan

Consumer debt has paid for our cars, education, vacation, home, furniture, small purchases, and even that brand new flat screen TV we got from Best Buy.

This post has been developed as a debt resource.

Debt Basics

Debt is money that is owed to a creditor. There are two main forms of debt. There is unsecured debt and secured debt.

Unsecured Debt – This is money owed from loans given on only the good faith that the borrower, or debt holder, will pay back the loan as agreed.

The creditor will charge a higher interest rate for unsecured debt because the lender takes on more risk. The increased risk stems from the lack of collateral thus the lender has fewer options to collect if the debt goes unpaid.

Secured Debt – This is money owed on a loan that is secured or ensured by some sort of asset that the creditor will eventually have the rights to sell if the secured loan goes unpaid.

Debt and the Current Economy

The landscape and enviroment which houses debt has  and continues to change with the struggles of the current economy.

For instance for the first time in a long time American consumers are starting to save. Levels of consumer credit are declining. One could argue that the recent brush with economic collapse has taught the consumer a lesson or two about debt and personal finance.

Though many consumers and homeowners have had to obtain debt help and assistance to get control of their finances the actions and habits of consumers is on the up and up.

Debt management is finally becoming a large concern of the masses.

The new program is a HUD bridge loan program for homeowners.

These loans will be originated for terms of two years. They will not charge any interest and all the will be given a low priority status in terms of hierarchy in collections. this is commonly refered to as junior lien debt.

The program is said to be called the HUD Emergency Homeowner Loan Program. HUD claims that they will be partnering up with nonprofits and housing agencies to better target small local communities where the loans will do the most benefit.

These loans will have nothing to do with loan modification or the like. These are just bridge loans. They do require that homeowners be in or near default but no more behind then 3 months.

This program has been established to help homeowners stop foreclosure

Many of the bigger banks are going to stop foreclosure proceedings in all 50 states.

This is in a response to questionable procedures of loss mitigation departments as well as the questionable authority of mortgage securities and proof of ownership. More specifically the ultimate fate of MERS which is the Mortgage Electronic Registry System that was created and put into use in 1997 to allow for low-cost high-efficiency mortgage security trading.

This massive delay of foreclosures is great news for homeowners. Just imagine the leverage this will give homeowners in loss mitigation negotiations with the lender.

What better incentive to work with homeowners then no other option. Though lenders could insist on waiting it out, there would be no cash flow and extra cost. Lenders would no doubt take a deeper look into a mortgage workout solution such as a loan modification for homeowners who were previously overlooked.

Even if lenders don’t work with homeowners the homeowner will still be able to stay in the home rent free for who knows how long.

This thing could take years. Homeowners would be able to save plenty of money that would allow them to make home affordable somewhere else.

This could go one of two ways.

1. Homeowners catch a break and are able to buy some time to regroup.
2. Banks catch some real heat and the whole MERS system is found to have no real authority. This would spell dooms day for all of us.

Assuming thatv a homeowner has the means to delay foreclosure for as long as possible then that homeowner mayb hyave rthe ability to realize the following benefits listed below.

1. More time at home.

 

2. Time to save for the new life away from home.

 

3. The extra time before foreclosure may prove long enough for the homeowner to find a solution that either allows them to stop foreclosure via a foreclosure alternative such as a short sale.

 

4. The extra time allows them to escape the foreclosure and make home affordable by lowering their monthly mortgage payment through some sort of mortgage solution and they are then able to keep their home. This may be through a loan modification.

 

It may not surprise you to hear that they are servicing an enormously large population of mortgages. You may and perhaps most likely have a mortgage with BoA or Country Wide Mortgage which was purchased by, and is now, Bank of America. This enormously large banking and lending institution has it’s hands full of troubled mortgage loans.

Homeowners need mortgage help with Bank of America home loans. That is a fact, (and a obvious one at that) there is no question or argument about the matter. The real question on everyone’s mind (well at least those of us that have a BoA mortgage) is this…

Does Bank of America offer mortgage assistance to homeowners suffering through a financial hardship?

The short answer to this is *yes.

(man I’m a clever blogger)

*see Bank of America is so large and they have a lot to deal with, most of which is not even their mess but was inherited out of the economic necessity of a CountryWide buy out (which they stepped up and handled). They were not prepared, no lender was, to handle the enormous demand for loss mitigation operations that they must now deal with. Given that information they are helping homeowners find mortgage solutions such as loan modification through HAMP or the Home Affordable Modification Program. However the problem with the help that homeowners are receiving is that the debt collection efforts of Bank of America (and every other like lender) conflict and will very often work against the loss mitigation efforts to help homeowners.

There is a simple solution that is going to be hard for most to understand and stick with…

STOP CALLING THEM

I will post on the BoA HAMP Trial Modification very soon. That post will address that issue further until then I have outlined some key principles that should move mountains in regards to our ability to understand how the trial modification process works, why you can not call and ask questions, who you can call instead since you won’t listen to me any how, and some information that will make about half of your jaws drop while reading this post.

Quick Tips – BoA HAMP Trial Modification

• The thick package that comes with a contract looking document and another envelope for you to use to reply is the trial modification offer. Congratulations.
• If you are paying only half of your mortgage payment then you are in a trial modification. Congratulations.
• I know you have called and the rep has told you that you have a ton of arrears and fees due, for now that does not exist, trust me. That rep is kept dumb and gets a commission for any amount you send in. Please stop calling.
• Read the darn contract it is not that bad.
• When you make those half payments you need to send in the payment coupon that goes with it. That coupon is in your thick package that came in the mail. That is the contract.
• If you have already made a few half payments and did not send in the BoA HAMP modification coupons then do so with any new payments and send in the others separtely with proof of payment and a SHORT concise note explaining what the heck you are doing. Send these “oops” coupons just as if you were sending in the payment correctly as the contract clearly instructs.

Homeowner Help From Bank of America

Bank of America offers their customers who are amidst a world of financial hardship many mortgage help options. I do not want to waist time going through the details of each and every mortgage assistance program that they have to offer but I will rattle off a few below.

Mortgage Help Options

• HAMP – Home Affordable Modification Program
  • As I said earlier I will post on the BoA Trial Modification in detail soon. You can read all about the Make Home Affordable Loan Modification and other homeowner assistance programs offered through the Making Home Affordable Plan which was established by President Obama to help American homeowners stop foreclosure and make home affordable.
• Deed in Lieu of Foreclosure
  • This program is for homeowners who no longer can afford their home even with a loan modification. There is an excellent resource that will help homeowners with the basics of a deed in lieu of foreclosure
• Forbearance
  • This is like a repayment plan. Learn more about forbearance.
• Loan Reinstatement
  • This is essentially paying all that is past due on your mortgage. They are very good at helping you with this. Imagine that.
• Redemption
  • This is done through the trustee or equivalent of a trustee for judicial foreclosure states. I don’t know a whole lot else. Learn more on redemption.
• Short Sale
  • If you have a interested buyer who does not want to pay full price a short sale may be a viable option
• Loan Modification
  • Even if you are unable to qualify for a Obama loan modification you can still get a loan modification the old fashioned way
• Mortgage Refinance
  • There is a program with in the Obama plan called HARP – Home Affordable Refinance Program.
  • Apply for HARP
  • Qualifications for HARP – Obama Refinance Help

Remember to check back soon for the post on the HAMP Trial Modification with Bank of America. Until then you should check this previous post out on the same topic…

Bank of America is Helping the American Homeowner Retain Home Ownership through Loan Modification