After the mortgage dilemma a few years back, which caused thousands of people to go into foreclosure, the government initiated plans to assist those who were and are having problems keeping up with their mortgage payments.
The Making Home Affordable (MHA) was initiated to assist homeowners avoid foreclosure and help bring the country back to financial stabilization. HAMP is one of these programs.
Qualifications
You must be at least six payments behind on your mortgage loan (if you are up to date on your payments and just recently fell into hardship, you will not qualify).
You financed the loan before January 1, 2009
Your ...
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Has This Happened to You?
A typical Scenario of Financial Hardship
Todd is living a financially comfortable lifestyle, with a household gross income $85,000 per year. Todd is married and has two children. Both are attending middle school and they have made plans for a cruise vacation, which is coming next month. The travel agent has been fully paid in advance for the cruise.
In the interim, Todd's mother-in-law became ill and is hospitalized. The prognoses is that she will need to live in a nursing home, because she will need 24 hour care; however, they decide to bring her to home, as that would be the better option. After all, he has an extra bedroom.
Arrangements ...
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TAX RELIEF ON SHORT SALES ENDS – FILE BANKRUPTCY TO AVOID TAX CONSEQUENCES
In 2007, Congress enacted the Mortgage Forgiveness Debt Relief Act in 2007 — legislation that exempted from personal income taxes the portion of mortgage-related debts that were forgiven by lenders in the aftermath of the financial crisis.
Under the Internal Revenue Code, when the repayment of some or all of a loan obligation is waived — such as in the case of a mortgage cancellation, short sale or some other type of modification that reduces the unpaid balance of a loan — the IRS views the forgone amount the same as if it were paid as ordinary income, and it is fully taxable to the recipient. Congress saw fit to shield borrowers against ...
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Mortgage Crises Far From Over – Time to Re-Address First Mortgage Modifications in Bankruptcy
Today’s New York Times Op-Ed Lead reminds us that the mortgage crises is far from over, but it still neglects to address what has always been the fairest and most viable option - permitting Federal Bankruptcy Judges to restructure first mortgages, including rate and principal reductions, in Chapter 13 bankruptcy proceedings.
Early in the financial crises, a few members of Congress were brave enough to draft bills to modify the bankruptcy laws to permit modifications. Their efforts were shot down by the bank lobby and quickly died - never to be brought back to life in any viable form. Now is the time to put this option back on the table on a ...
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Do You Want Bank of America As Your Landlord?
Bank of America has announced that it is rolling out a test program in three states (including New York) in which the bank will accept a deed-in-lieu of foreclosure from homeowners in foreclosure and then rent the properties back to the homeowners for an unspecified period of time.
For those homeowners who have tried to modify, have been unable to do so, and remain too stubborn to file for bankruptcy, this may be an option - but it may come with strings attached.
First, BOA has not discussed anything about the tax consequences of the transaction. Even if a homeowner “surrenders” a property bank to a lender, the lender still has the right ...
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Details of Mortgage Settlement Still Unclear – Don’t Jump For Joy Just Yet
After months of wrangling, the long-awaited foreclosure settlement between the government and the banks appears to be at hand.
A $26 billion settlement was announced Thursday morning between the federal government, state attorneys general and the five largest banks in the mortgage market: Ally Financial (GMAC), Bank of America, Wells Fargo, JP Morgan and Citigroup.
While many of the details still have to worked out, the major points are fairly clear:
(a) The settlement will only impact mortgages that were held by the five banks. If a loan was sold to Fannie or Freddie it may not be part of the pool that may be eligible to share in the ...
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It May Make Sense to Get Over It – Mr. Obama Is Not Going To Save Your Home…
Earlier today, I was listening to a business report on the radio in which an economist actually recommended that homeowners who purchased a home in the mid-2000's with little or no money down, who are now at least 12 months behind on their mortgage and have been unable to modify their mortgage because of insufficient income, actually file for Chapter 7 bankruptcy and GET IT OVER WITH - MR. OBAMA IS NOT GOING TO SAVE YOUR HOME!!!
Unfortunately, this mantra is going to going to get louder in the coming months as (a) banks may have already modified the vast majority of those who can truly afford to make timely mortgage payments, and (b) State ...
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Are Mortgage Lenders Encouraging Homeowners to File Bankruptcy?
I know this sounds completely bizarre, but it may start happening more frequently in the near future.
In the past 30 days, I have encountered three new clients who have been "informally" advised by their mortgage lenders to file bankruptcy to deal with their unsecured debt PRIOR to completing a mortgage modification.
Lenders, in addition to the 31% rule (previously discussed in another post), are now taking a closer look at a homeowner’s total debt ratio - also known in the banking business as the “back end number.”.
In the cases I have encountered thus far, each client had a total debt ratio (mortgage payments, auto payments and credit ...
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7 Tips to Help You to Modify Your Mortgage
Many homeowners are getting burned by reputable loan modification agencies and are being forced to file Chapter 13 bankruptcy to try and save their home from foreclosure. South Carolina attorney Dana Wilkinson gives seven tips to avoid this predicament when you are in the loan modification process in her recent article on BankruptcyLawNetwork.com. Here is a brief summary:
Keep a copy of EVERYTHING – Keep a separate file for any correspondence between you and your mortgage lender. If possible, keep notes of every conversation.
If it’s Not in Writing, Assume it isn’t True – Borrowers must have any important information regarding their loan ...
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How Can I Qualify for the HAMP Loan Modification Program?
Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. President Obama introduced the Home Affordable Modification Program (HAMP) in February 2009 to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure. HAMP provides eligible homeowners the ability to modify their mortgages to make them more affordable.
The government just recently announced that mortgage lenders would now have an expanded flexibility to assist more unemployed homeowners and homeowners who are underwater on their ...
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