More Good News!

If you're mortgage is with Bank of America, and you are in trouble, I have news for you! B of A yesterday announced that effective immediately it will reduce the principal amount of your mortgage loan balance. There are qualifications you must meet.

You must have missed at least two months payments on your mortgage, and the mortgage balance must exceed the value of your home by at least 20%. According to B of A, this will affect about 45,000 borrowers, or about 30% of its overall mortgage portfolio.

Also, it should have the effect of applying other major lenders to follow the same path. Wells Fargo announced it has already done so for 52,000 borrowers to the tune of about $2.6 Billion, while both Citi and JPMorgan Chase refused to say if they'd attempt a similar program.

Brief Notes

Well, things are apparently slo-o-o-o-w-ly improving. The latest updates from the government and the banking industry indicate that more and more lenders are working with borrowers who are either in trouble already or just barely avoiding it. Latest statistics show that more loan mods are getting put together, and at a somewhat faster pace than just a few months ago. How long this trend continues is anyone's guess, but it just makes good sense to do so, as any loan that is modified & avoids default and foreclosure benefits the lender as well as the borrower. Stay tuned, and we'll bring you the latest on this and other trends as soon as it becomes available.

Brief Notes

Hate Those Fees!

Hate those fees that people charge up front to help get a loan modification? While some are legitimate and from legitimate firms, there are an increasing number that aren't. You pay your money and--that's all that happens. You pay your money! No loan mod, no nothing, except a bigger hole in your wallet.

Well, take heart! The Federal Trade Commission is proposing a rule that will ban any fees from loan mod firms until AFTER they have a letter documenting a legitimate modification offer from the lender involved. Stay tuned for more as it develops.

Good News From Bank of America

BofA has just announced that it will become the first mortgage servicing entity to agree to do loan modifications on various types of second lien paper. This will include regular second mortgages and home equity lines of credit. What makes this announcement particularly encouraging is that BofA is NOT conditioning its agreement on a homeowner having its first mortgage also with BofA. As long as the second lien in question is a BofA loan, the primary mortgage can be with any lender, even if it's someone other than BofA.
The reason that this is of major importance is that, according to the Treasury Department, roughly half of all homes with first mortgages in default also have a second lien. This could imperil the homeowner even if he were able to negotiate a loan mod for the first. BofA's action could lead the way to an improvement in the overall mortgage finance market where default situations exist.

Good News From HUD

In an announcement this past Friday by HUD, it was announced that homeowners with FHA loans no longer have to become delinquent on their payments before gaining eligibility for loss mitigation assistance. Under the new guidelines, these homeowners must fit the definition of one "facing imminent default". What that means is that the borrower must be facing reduction of income or some other form of financial hardship that will result in the homeowner finding it difficult to make the next scheduled payment. Conceivably, such other hardship could be something such as death in the immediate family or a health crisis uncovered by insurance.

This could cause the FHA's forbearance program to kick, thus allowing the lender involved to postpone, reduce or suspend scheduled payments on the loan. Questions? Get in touch with your lender NOW--before you fall into default.

Good News in Florida!

Happy New Year and here's hoping things get better in the new year for all of you! Moving to the latest bit of good news for people facing foreclosure, in Florida, the state Supreme Court has started a mediation program between lenders and homeowner/borrowers in hopes of reducing the number of foreclosures. The court's order requires that ALL foreclosure cases in the state's courts involving residential property be put through a 'managed' program to mediate a non-foreclosure solution for the case. This will have to be started for a given case within 120 days of it being filed in court, and the costs will largely require that the lender be responsible for payment. How well will it work? Time will tell, but, once again, we see that a little bit of ingenuity can go a long way to easing this terrible national crisis.