Unlike HAMP, which provides loans for people who are behind on their mortgage, HARP (Home Affordable Refinance Plan) provides assistance for those who are current on their mortgage payments (or have limited delinquencies over the 12 months prior to refinancing) and their loan to value ratio is over 80%, or their home is worth less than the amount of the mortgage loan. In addition, the loan must be owned by Freddie Mac or Fannie Mae.
Initiated in March 2009, HARP offers borrowers who have little or no equity in their homes the ability to refinance their mortgage into more affordable loans without new or additional mortgage insurance. HARP has ...
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What is HAMP?
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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FHA MORTGAGE AFTER BANKRUPTCY? THE ANSWER IS YES!
Over the past five years, many of my bankruptcy clients have surrendered underwater primary residences to their lenders instead of modifying their mortgages. In a majority of the cases, the numbers simply did not make any sense financially - even if they tried to keep the property, they would never be able to build any equity within a reasonable time frame.
The single most asked question in these cases has been "Will I ever be able to buy another home?" The answer is YES!
After the issuance of a discharge in Chapter 7 bankruptcy, an FHA applicant must wait out the FHA's minimum "seasoning" period. At the time of this writing, that period is ...
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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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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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5 Tips on Saving for a Down Payment on a Home
With tighter lending requirements the new standard, most new home purchases now require a 20% down payment. With an average home on Long Island costing $395,000*, a homebuyer would need to come up with a $79,000 down payment to secure a mortgage.
Find small ways to cut your expenses: Look for ways to cut your monthly expenditures and save the difference. Start clipping coupons for your food or lower your cell phone minutes if you don’t use them. Turn off all the lights when you aren’t using them. Start bringing lunch to work every day instead of eating out. Use coupon codes when shopping online. You’ll find these little things will add ...
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Lowest Rates in Decades? (5 Reasons Why Consumers are Being Turned Down for Home Loans)
Did that headline grab your attention? It seems to be grabbing attention across the country, but when homeowners apply for these rates to refinance their mortgages, they are being declined. What is going on? According to Jack M. Guttentag, The Mortgage Professor on Yahoo, millions of mortgages currently with rates of 6-9% or higher are being declined because of Fannie Mae and Freddie Mac, now in government conservatorships. They were too liberal in their lending for years and are now reacted to the aftermath by becoming excessively restrictive. As per Guttentag, these are the reasons consumers aren’t getting approved:
1. Credit Score Too ...
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