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Archive for the ‘Loans’ Category

Your best tool to negotiate with your mortgage company is the discovery of a Truth in Lending Act (TILA) violation, which in some cases may give you the right to rescind the loan. State and Federal laws require mortgage companies to follow specific guidelines when originating home loans and as a result many mortgage loans have TILA and/or RESPA violations which can be used as bargaining tools when negotiating a loan modification with the mortgage company.

Many of the home loans originated by brokers and lenders over the last few years have unexplainable fees and charges or were manipulated by overstating the borrowers’ income or inflating the property value to allow the lender to illegally profit from the sale of mortgages to investors in the secondary market. Subprime mortgages with hidden interest rate adjustments and pre-payment penalties or Option ARM loans with minimum payment options allowed borrowers to differ interest to a point in future when the loan recasts and forces the borrower into hardship by paying a much higher mortgage payment. In most cases refinancing is not an option due to declining property values or high debt to income ratios. Only a Forensic Loan Audit can discover and document these violations, which may be used against the lender when negotiating a loan modification.

Another common violation occurs when the creditor fails to properly provide a notice of the borrower’s right to cancel. The right of rescission may be extended for up to three years in certain circumstances. When the right is extended for three years you can rescind the loan at any time before the three years are up meaning that the loan is treated as if it never existed. This means that the creditor must refund all interest paid, all closing fees, all broker fees, and even pay for your attorney fees.  Read more... (357 words, estimated 1:26 mins reading time)

FHA loan programs were created to help increase homeownership during the great depression and can help almost any homebuyer purchase a home regardless or income or credit. With the flexibility inside the programs no other home loan program can compare.  FHA mortgage programs makes buying a home easier and less expensive than other types of home loan programs. Here are just some Examples of how FHA can help you buy a home,

Minimal Down Payment and Closing Costs.

·      Down payment less than 3% of Sales Price with 100% financing options available.

·      100% Financing options available

·      No reserves or required.

·      FHA regulated closing costs.

·      Seller can credit up to 6% of sales price towards buyers costs.

·      Easier Credit Qualifying Guidelines such as:

·      No minimum FICO score or credit score requirements.

·      FHA will allow a home purchase 2 years after a Bankruptcy.

·      FHA will allow a home purchase  3 years after a Foreclosure. 

·      Easier Debt Ratio & Job Requirement Guidelines such as:

·      Higher Debt Ratio’s than other home loan programs.

·      Less than two years on the job is allowed.

·      Self-Employed individuals o.k.

How FHA Loan Programs Work?

FHA does not fund loans to homebuyers; instead FHA insures loans made by private Florida mortgage companies. The FHA insurance provides protection against mortgage defaults. FHA loans have loan limits depending on the Florida county and city. Because FHA loans are insured lenders can give applicants betters terms on the mortgage being offers. FHA insurance saves borrowers money and allows first time and move up[ buyers to purchase a home with as little as three percent down.

What kind of home can I buy?

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Here’s a list of loan modification do’s and don’ts to help you avoid common pitfalls.

Do know your rights.

More than 80% of mortgage contracts violate one or more lending laws—and most of them go unnoticed. But these violations can be your biggest weapon in the loan modification process. They can give you the leverage you need to negotiate with your lender and stop foreclosure. Your loan modification attorney can help you understand your rights and use them to get the results you want.

Don’t wait too long.

The foreclosure process is designed so that you have time to get back on your feet and save your home. But that doesn’t mean it’s safe to procrastinate. The longer you wait, the harder it gets to get you out of that fix. As soon as you decide you need mortgage help, call for a loan modification help and get started.

Do work with your lawyer.

Your Home Loan Modification doesn’t rest in the hands of your lender, your broker, or your loan modification attorney. These people can help, but you have to do your part and cooperate with your lawyer. Make sure to submit your paperwork on time, answer questions honestly, and give them a clear picture of your financial situation.

Don’t file for bankruptcy, unless you really have to.

Many people think that filing for bankruptcy can help them stop foreclosure. But data from the American Bar Association shows that it doesn’t work that way. In fact, 96% of the people who file bankruptcy end up losing their homes anyway—so they’re left with a foreclosure AND a bankruptcy on their records. In some cases, bankruptcy is still a viable option, but don’t make any decisions without getting professional advice.  Read more... (408 words, estimated 1:38 mins reading time)

A Home Loan Modification can help you stop foreclosure and stay in your home. But if you’re like most homeowners, you’re probably wondering how it will affect your credit, and whether in a good or bad way. Unfortunately, there’s no single answer—it all depends on how far behind you are and the kind of mortgage loan modification you’ll be granted.

Best-case scenarios

Technically, since you’re not borrowing any money, a home loan modification won’t hurt your credit score. If you’re paying less in interest, you have a smaller debt burden. And since most lenders prefer an interest rate reduction, there’s a pretty good chance that a Home loan modification will improve your credit score.

The implications are even better if your lender forgives part of the principal, although this is less common. If they write off $50,000 from your loan amount, it will show up on your report as a smaller loan, which can increase your credit score.

The lender factor

Unfortunately, it doesn’t always happen that way. It also depends on how your lender reports the home loan modification to the credit bureaus. Many of them will consider it paid for less than the original amount owed, which will count against your score. If you’re already in foreclosure, the impact on your credit can be substantial. Of course, compared to a short sale or a foreclosure, a Mortgage Loan Modification is still the best way to maintain your credit standing.

Tax implications

One of the early problems with Loan modification is that the amount forgiven is usually taxable. That means if your debt is reduced by $50,000, the IRS views it as income and imposes the corresponding tax. This can catch homeowners off guard during tax season, as many of them don’t know the tax implications at the time of the modification.

Homeowners hoping to get a loan modification with Countrywide may want to rethink their options. Countrywide Financial, best known for excessive lending practices that led to widespread defaults, now has so many bad debts on its books that it may have to tighten up its loan modification service.

Home Loan Modification allows defaulting borrowers to work out new terms with Countrywide, so that they can avoid foreclosure and stay on track. Countrywide began offering the service through their Home Retention Department at the height of last year’s real estate bubble. However, due to the volume of requests coming in, many cases were delayed and resulted in foreclosure. The company hit an all-time low in 2008 and was recently bought out by the Bank of America.

In line with the change, the Loan Modification Department of the Law Offices of Marc R. Tow is also taking measures to protect its clients. The firm, one of the leading loan modification services in the country, will only negotiate modifications with Countrywide for clients with viable cases and those who are in serious financial trouble.

Changes are also expected in national Loan Modification policies. While loan modification is still open to borrowers not in default, new laws may soon limit the service only to those in bankruptcy or serious delinquency. This will allow lenders and loan modification companies to focus their attention to clients who are most in need.

The firm will continue to help clients with loans serviced by other companies. Besides loan modification, the Law Offices of Marc R. Tow also offers assistance with loss mitigation alternatives such as short sales.