Archive for the 'Foreclosures' Category
Good News for Unemployed Citigroup Mortgage Holders
Posted by Rachel LaMar, J.D. | Leave A Comment »
If you hold a mortgage with Citigroup and are unemployed, the announcement made March 3 can help you with your payments. Citigroup has created a new program whereby it will temporarily lower mortgage payments for borrowers who have recently lost their jobs. 
Qualifications:
1. Recent job loss (you must provide proof of unemployment and sign a form indicating you are seeking new employment)
2. Borrower must be at least 60 days behind in payments
3. The home must be your primary residence (you must live there)
4. The program applies only to loans lower than or equal to $417,500
The payments will be lowered to an average of $500 a month for up to three months, and interest and penalties will be waived during this time. Citigroup currently holds over 1.4 million mortgages and services four million additional loans which will NOT qualify under this program.
Citgroup indicated that they believe this new plan will assist thousands of borrowers, and help prevent more foreclosures as the downturn in the economy leads to job losses. They are also hopeful that their program will prompt other lenders to follow in their footsteps. This big announcement follows Citigroup’s earlier news in November that it planned to modify loan terms by as much as $20 billion for borrowers who are at risk of falling behind on loan payments, but are currently not in default as of yet (how effective this program is remains to be seen). Both plans on Citigroup’s table were created from within the company, and the company denies the federal government had any role in it’s programs.
This appears to be a good faith effort on Citigroup’s behalf to assist troubled borrowers. It is a win-win situation to attempt to help borrowers in any way, as foreclosures effect not only the borrowers but have a great financial impact on the lender as well. With unemployment rates climbing monthly (the Labor Department figures show an increase to 7.6% in January, up from 7.2% in December 2008), this may be a lifeline to Citigroup mortgage holders to buy them some time for find alternate employment. Let’s hope other lenders follow their lead in the coming days.
Related Posts: Foreclosures, Home Loans, Homeowners, Mortgage News, Uncategorized
Important NEW Information About the Homeowner Affordability and Stability Plan (Part 2)
Posted by Rachel LaMar, J.D. | Leave A Comment »
For those of you who read my post of a few days ago (How the new Homeowner Affordability and Stability Plan Can Help You, February 24), you should know that over the last several days there has been a great deal of information released on the details of this plan, of which I feel the need to share. I would encourage you to read the prior post in conjunction with this one.
As the author of a book written to help people through the foreclosure mess (www.MortgageWalkawayOptions.com), I was particularly optimistic about the new plan, thinking that so many people would have a new option available to them, and would thus get help. Since the plan goes into effect next week, on March 4, there have been many questions, information released on a daily basis, and much argument on late night political and news shows over the plan. Today I spent a lot of time pouring over some of the information, which I will summarize.
1. How is Eligibility Determined Under the Program? It is important to know that ALL of the details will be announced on March 4, however from the information available it is easy enough 
to figure out some of the key points of the plan, but here are the main requirements:
a) You must make enough income to be able to afford new payments
b) The program is limited to loans held or securitized by Fannie Mae or Freddie Mac. To find out if your loan is held by either of these entities you can call your lender after March 4.
c) Your home must be your primary residence (no second/vacation/rental properties). Multiple unit properties WILL qualify as long as you live in one of the units as your primary residence.
d) Your loan cannot exceed current Fannie Mae or Freddie Mac loan limits (this could eliminate many people).
e) Your lender is NOT REQUIRED to modify your loan–the program is voluntary. As I mentioned in my other blog there are financial incentives to lenders to offer the modifications.
2. Will Principal Balances on the New Loans Be Reduced? NO. While the wording in the plan did not indicate this, it has become clear that the new loan that is created will lower your payments (because you will have a new, lower interest rate), BUT there will be no reduction in your principal balance. As I mentioned in my other post, you will have the opportunity to reduce that principal balance by $5,000 at the end of 5 years if you are current on all your payments at that time, but other than that the balance will be unaffected. Caveat: If you are a borrower paying interest only payments and you refinance to a lower, fixed rate you may not see your payments go down, BUT you will likely save a great deal over the life of the loan.
3. What if You Have Both a First and Second Mortgage? The ball is in the lender’s court on this one. As long as the amount due on your first mortgage is less than 105% of the value of the property, the lender of the second loan can choose whether or not you will be able to refinance; this will basically depend on whether the second lender can remain in second position and on whether you can afford the new payment terms on the first mortgage.
4. Interest Rates on the New Loans: These will be determined by the market rates and will typically be 15 or 30 year term mortgages with fixed rates. Good news: there will be no prepayment penalties or balloon payments.
5. Do you Need to be Behind on Mortgage Payments to Qualify? No. As long as you have sufficient income to make payments on the new loan and are at risk of imminent default you can qualify under the program (assuming you meet the other criteria).
I hope this is a start to clarifying the program for everyone. It certainly has opened my eyes. The best piece of advice I can offer you is to GET EDUCATED and understand other possible options that may be available to you. My book provides this information in a very basic format if you need more information. You can download it at www.MortgageWalkawayOptions.com.
I thought maybe this book might become obsolete in light of the new program, but now more than ever it is important to understand all options. To find out if you qualify under the new legislation please call your lender after March 4 and tell them you would like to be considered under the new Homeowner Affordability and Stability plan. Best of luck to you.
Related Posts: Financial news, Foreclosures, Home Loans, Homeowners, Mortgage News, Real Estate News
How the Homeowner Affordability and Stability Plan Can Help You
Posted by Rachel LaMar, J.D. | Currently 2 Comments »
As you likely know, the Obama administration has instituted a new plan to help homeowners facing foreclosure-the Homeowner Affordability and Stability Plan. The good news is that the plan actually reaches beyond merely helping those who are behind on their payments–it will actually help those who are current with payments but have declined property values. It also is going to help the pre-foreclosure process in general, mainly loan modifications. There are three different sub-categories of assistance.
First, the plan is going to allow 3-4 million responsible homeowners access to low-cost refinancing and loan modifications, thus reducing monthly payments and creating a new loan that reflects the current value of your home. Hallelujah!
Second, the new plan is going to create a $75 billion stability initiative to help at-risk homeowners who are struggling to make their mortgage payments but cannot sell their homes (because the home’s value has decreased below the amount owed on the loans). The goal of this part of the plan is to help people stay in their homes, and to protect neighborhoods from foreclosures that bring prices down even further. Loan modifications will be allowed BEFORE borrowers miss payments (something that has not been done up until now), thus supporting responsible homeowners.
This second part of the plan has some fantastic built-in financial incentives for both lenders and borrowers. Lenders will be paid for every eligible loan modification granted, AND also will receive monthly fees as long as the borrower stays current on the loan. This will continue for three years. Service providers will also be paid for initiating modifications BEFORE a borrower has defaulted on their payments.
Borrowers will reap some benefits too–if they stay current with their payments on the new loan they will receive up to $1000 a year for five years toward reducing the balance of the principal on the loan. So if you fall under this category and get a modification, as long as you keep current on your payments for five years you will have your principal balance reduced by $5,000 at the end of that period…can you say “FANTASTIC!” Really, how often does the government just give away free money?!
The final BIG news under this second part of the plan is that the government is going to create CLEAR and CONSISTENT GUIDELINES for loan modifications. This means that all lenders will have the same set of rules to follow when granting modifications. You have NO idea how much this will help you if you are a struggling homeowner, but let’s just say this is amazing–no more bending over backwards to figure out what your lender’s program entails (only to find out that since yesterday the plan or offer has changed–you might laugh but this is common practice).
There will be strict reporting and oversight between the Treasury, HUD, the Federal Reserve and other committees to make sure all the above guidelines are followed. Judicial modifications of home mortgages will be allowed in bankruptcy cases, renters of foreclosed properties will receive financial assistance and help with moving, and other government programs already in existence to help homeowners will be improved.
Third, the plan will support low mortgage rates by building confidence in Fannie Mae and Freddie Mac. This will increase stability and liquidity in mortgage-backed securities and help stabilize the housing market.
This plan is made to really help homeowners and our housing market. With strict oversight and adherence to the guidelines established by the administration, I think this plan could have a big impact on the housing market. But what I am most excited about is that it will help millions of people stay in their homes. [PLEASE SEE PART 2 OF THIS POST, WHICH COVERS DETAILS OF THIS PLAN, IN MY FEBRUARY 28 POST]
Related Posts: Financial news, Foreclosures, Homeowners, Real Estate News, Uncategorized
25352 Rue De Fleur Escondido, CA 92026
Posted by Pam & Joanna | Leave A Comment »
Ring Tailed Tooter of The Week
How much would you think you would pay for an entertainers paradise?
3,547 sqft home, 2.5 acres sitting high on a hill in a gated community with breathtaking views in every direction, immaculately maintained with the highest quality upgrades and furnishings including a resort style pool, waterfall and spa? $1,500,000 to 
$2,000,000 perhaps? Well maybe in Rancho Santa Fe or Del Mar, but not in this hidden little jewel of a community tucked away in North Escondido. This home located in the gated community of Montreux, just sold for ONLY $680,000 .
Now that is something to shout about!
What fabulous values are you missing out on?
If you are even thinking about jumping into this unbelievable market we are currently experiencing, give us a call right away so we can help you find your dream home or investment property before someone elses finds it first!
Pam and Joanna
760-580-1615 or 760-580-1630
Related Posts: Foreclosures, Great Real Estate Deals
Promising Mortgage Workout Plan in the Works
Posted by Rachel LaMar, J.D. | Leave A Comment »
Hot off the wires: there is a bill pending that would help people facing foreclosures in their ability to work out new mortgages. It would allow judges to authorize loan terms for primary residences after the owners have declared bankruptcy. This is a brilliant idea and in my opinion has the most potential of anything I have seen so far in the foreclosure assistance arena.
The argument against the bill is that many lenders would likely be hit hard. Not only would they lose the authority to negotiate new loans with lenders, but they could also be dragged into bankruptcy court by millions of defaulting borrowers. This would likely cause lenders to lose even more money than they would if they actually worked out the loans sitting on desks of thousands of loss mitigation department employees.
Naysayers insist that the bill would trickle down to new homebuyers via higher interest rates coupled with larger required down payments. This would obviously be a result of lenders making up for their losses by trying to prevent the same thing from happening in the future–the risk of a judge taking over their job would be great.
Those supporting the bill, including President Obama and most of the Democratic House and Senate members, feel this program would spare taxpayers money since it would be handled by the courts and not take money from bailout programs that earmark funds for mortgage modification programs. It would most likely prove to be much more efficient than individual lender workouts; for one because many lenders have way too many files to deal with and cannot dedicate the time needed to each borrower, and secondly because many lenders change policies and/or flat out change their minds in the middle of the loan modification process. Unfortunately as many people facing foreclosure know, it is a nightmare to attempt to deal with the lender.
If you are in the middle of attempting a workout with your lender, or if you forsee the need to do so in the future, hold onto your hats. If this new bill is passed there is no telling how quickly it may take effect. But if the new administration gives any indication hopefully it will help millions of homeowners in a more efficient way, allowing more people to stay in their homes.
For up to the minute updates on this and other pending legislation and program review, go to www.MortgageWalkawayOptions.com. If you purchase my book on foreclosure options you will be able to access our update link, which provides constant updates on everything related to foreclosures and mortgage workout programs.
Related Posts: Foreclosures, Homeowners, Mortgage News, Real Estate News
