Homeowners that find themselves facing difficult economic times are apt to make rash decisions, but it’s important for consumers to understand that they need to take their time when dealing with something as drastic as a foreclosure proceeding.

Many struggling individuals must choose between filing bankruptcy and pursuing some type of home loan modification program and it is important to compare and contrast the two options. An excellent way to compare these is to understand the different impacts they will pose on a credit rating and other long term effects.

Aurora Lillo Editor of the “Loan Modification Foreclosure” website — http://www.LoanModificationForeclosures.com — pointed out;

“aIt is critical that consumers realize that a bankruptcy is not going to stop legal filings, rather it will simply delay the inevitable and allow an individual to procrastinate. There simply is no way that going bankrupt is going to provide freedom from a mortgage. The majority of individuals who opt for this method of dealing with the problem mistakenly believe that they might get to keep their home, and the unfortunate truth is that the entire process will only allow them to stay a little bit longer. A mortgage loan mod, on the other hand, is a more permanent solution and will help a person make arrangements to keep their residence by designing a monthly payment that is easier to afford given the current financial circumstancesa”

Another major difference between bankruptcy and a home loan modification is the impact to a credit score and financial history. The negative effects of seeking total relief from all outstanding obligations is going to exist for seven to ten years and will make it very difficult to obtain new loans or apply for credit in the future. Modifying a mortgage will not cause the same harm to a person’s credit rating and can actually help build a foundation for the consumer to rebuild their solid financial picture upon. Future lenders are not going to treat individuals that have pursued some sort of loan modifying program in the same way as individuals that have taken the easy way out.

“aFew people want to lose their home and have to move, so it only makes sense that consumers should contact a professional to seek advice. When dealing with something as important as living arrangements and credit standings, it should not be a guessing game. Bankruptcy is a drastic measure that will have severe repercussions, but a home loan modification could be the answer to a struggling homeowner’s prayersa” added A. Lillo.

Further information about how to get professional assistance with a mortgage loan modification by http://www.LoanModificationForeclosures.com

Wells Fargo Modification Denied – 3 Secrets You Must Know

It is not uncommon to have Wells Fargo deny a request for modification. What’s important is how you react right away when you get the news. If you’re correctly prepared and spring into action you may be able to turn that denial into an approval very fast. I have broken this down into what I feel are the 3 most important things to know if your Wells Fargo loan modification is denied.

1. Know what program you were denied for – Wells Fargo has many different loan modification programs they offer. Each program has its own guidelines and just because you were denied for the first option does not mean your numbers may not be perfect for another. Ask them what program you were denied for and ask why. The representative should give clues as to a specific reason for your denial and provide valuable insight on your next approach.

2. Do not give up on Making Home Affordable (HAMP) – Most of the time this program will be your best option to reduce your mortgage payments and likely will be the first option Wells Fargo will try to qualify your loan for. If at first they deny your loan for Making Home Affordable (HAMP) you will have a short window to update your financial statement to fit within HAMP guidelines. This should be done within the first seven to ten days of receiving word that the modification has been denied to avoid having the review closed. If they close the review you may need to start at the back of the line with all new updated documents, so prompt action can certainly save a lot of time and frustration

3. Things are always changing at Wells Fargo - In an effort to deal with a massive amount of loan modification requests Wells Fargo is constantly trying to update and support their approval and qualification systems. In addition its not uncommon for new programs to become available that may not have been around when your loan was originally denied.

Wells Fargo remains one of the largest mortgage servicers in the country. For some the loan modification experience is relatively painless, many others report a long and torturous process.

In order to be successful you will always need to be prepared to update your financials in a flash, should another option or program become available. A denial is not always a bad thing and many times it may let you know exactly what to change in order to have the modification approved. Some fast thinking and a little persistence could lead to some major positive changes in your household finances.

How Georgia Homeowners Can benefit from the New Home Loan Programs

The Federal Making Home Affordable Program has created a number of home loan programs that will help keep Georgia families in their homes, stabilize Georgia’s communities and assist Georgia homebuyers during these troubled times. Under these new home loan plans, Georgia homeowners can:

• Refinance their mortgage to a new, lower, fixed interest rate.
• Refinance even with declining property values.
• Refinance with lower income and asset verification requirements.
• Refinance Multiple Investment Properties.

Each of the above possibilities require that Georgia Homeowners be current on their existing home loans. However, for those Georgia families that have already fallen into hard times and are behind on, going to be behind on, or have an impending ARM adjustment/balloon payment with, their existing home loans can;

• Obtain a modification on your mortgage that can potentially reduce your monthly payment, or offer other alternatives that can help you keep your home.

Finally, for those Georgia families that are looking to purchase their first new home, or even upgrade their current home, programs are available for them to;

• Purchase beautiful Georgia homes with credit scores as low as 580
• Purchase their new dream home with no out-of-pocket money down

The U.S. Treasury, Fannie Mae and Freddie Mac have developed these programs in an effort to help both troubled and current Georgia borrowers, to get back on track and improve their current financial situations.

So How Do They Work? Refinance

For Georgia Homeowners that are current on their mortgage payments but unable to refinance because their home value has decreased, you may be able to refinance to a lower rate, or a lower-risk, loan through the refinance solution that is part of this program. Examples of how the refinance program can help Georgia Homeowners:

• Fixed-rate mortgage to fixed-rate mortgage
• Adjustable-rate mortgage (ARM) to fixed-rate mortgage
• Super conforming fixed-rate mortgage to super conforming fixed-rate mortgage

Loan Modification

For Georgia homeowners who are behind in their mortgage payments, in the foreclosure process, or are current on their payments but have recently experienced a significant hardship, you may be able to modify your loan to a lower rate through the Loan Modification Program. Significant hardships are set as circumstances that may make it difficult for you to pay your mortgage going forward.

Purchase

For Georgia area families and individuals that are in search of a loan for their new dream home, financing and programs are available to help them purchase;

• Bank owned foreclosures at below market value
• With 580 credit scores
• With no, or little, money down
• With down payment assistance

How Do I Know If I Qualify?

Georgia Loan Pro can help you move through the qualification process, and help you find the homeowner lending program that fits you best. Georgia Loan Pro will work with Georgia Homeowners to assist them in putting together the best purchasing package, and discover whether loan modification or a refinance, is the best option for them.

For more information, please contact Georgia Loan Pros via email.

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Part 6 (Excerpts)

Arizona is not a recourse state, so chances are you will not owe 1099 C Income

In Arizona, typically its not a recourse state, so if they are telling you that theyre going to garnish your wages because you didnt pay back your entire mortgage, there is a local bank ,that was threatening a very good colleague of ours about a small second mortgage that person had taken out. Threatening to send it to collections and garnish her wages. It simply isn’t going to happen.

But nevertheless, there is still the tax implications that apply, if you need to navigate through this maze. There is a lot to it, you need to protect yourself. You talked about bankruptcy is one of those exclusions, right? One of the problems with bankruptcy is people dont understand the bankruptcy laws. They are so tight now and your feet are really held to the fire from the federal government right now. It’s not like you just didn’t make your mortgage payment, so you go file bankruptcy, it’s just not realistic. Assuming bankruptcy is the last resort option for everybody. And we certainly want to avoid that, it would not be sound financial advice from any credible source that I can think of.

Let’s walk through a case scenario, somebody who is listening to this broadcast, their head is spinning right now, they’re thinking, oh my gosh. I should have known about the tax implications, a short sale versus loan modification. Let’s start at the top and work through a quick scenario. And then we’ll point out the specifics of what they should be considering right now.

For example, we talk about this all the time and to your credit Michael Barnes and to Velocity Financials credit, you were early in bringing out the loan modification for people who were in a distress situation regarding a mortgage, maintaining or keeping up with the mortgage payment. So you started going down the path where the refinance started to become a much more difficult option, with new constraints and all the other factors that led to part of this economic crisis, a loan modification has become a buzz topic today. Driving to the station today, driving down Camelback Road, I see a sign on the corner. You know, one of those stick in the ground, homemade jobs, that says don’t refi a Loan, modify, with some success rate and the phone number.

Hang on there I want you to say the success rate. The sign literally said, 99% success rate, and it goes back to the point that you made when they say that they can reduce your mortgage principal by tens of thousands, hundreds of thousands of dollars, thats the absolute last resort for any lending institution. Thats not what this is about, so let’s start with that, then we will work on the tax ramifications of how that might work in the overall financial strategy.

I am familiar with the loan modification industry here in Arizona. There is no regulation, unfortunately. We at Velocity Financial work with a national network of attorneys, so if you’re the guy in El Centro California, or youre in Phoenix, or youre in Alaska it doesn’t matter where you’re at. We have someone who is an expert in that field in that state because the laws are different. But without the regulations some person with the ugly yellow sign on the side of the road says he has a 99% success rate, I don’t believe him it’s probably not using an attorney, who knows, dont buy into that garbage. Were going to tell you the truth, if we cant do a loan modification, we will tell you that we cant do it. And if a loan modification is not the best thing for you, you can find the some of these other options.

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Part 2 (Excerpt)

The median income family can afford twice the median priced home; prices drop over 50%

And now I mentioned Dan Havey is back in the studio with us, Dan has done a lot of great things in the mortgage industry. He left us about a year and a half ago, is that right Dan?

Yes, I left the mortgage industry in October of 2007. Tell us a little bit more about yourself.

As you know I came originally from Wisconsin, where I got a degree in Business Finance and I came out here in 1989 and started working with my brother selling real estate owned-REO, bank owned properties for Fannie Mae, Countrywide, and the Resolution Trust Corporation-RTC which was the government entity that was put in charge of disposing of all the real estate owned by the 1800 S&Ls that had failed. I did that until about 1995 when I moved into the mortgage industry and there for 12 years I worked predominately with bankruptcy attorneys helping their clients get out of bankruptcy and foreclosure. I left the mortgage industry in October of 2007. Now I am working predominately in the arena of marketing for real estate and mortgage companies, helping out companies, just like Im here helping out Michael today, to get people to realize that right now actually is a really good time to buy.

There are a couple of points I want to make and it was something that Michael had said earlier. The first one was that 4% interest rate. Originally Obama said a couple of weeks ago, when he rolled out the mortgage plan, that they were going to take the $200 billion and use it to buy mortgage backed securities, well the article I was reading today said it appears that plan may have changed. Instead of buying the mortgage backs they were actually buying the stock of Fannie and Freddie to help support the company and keep these companies going under. I dont quite understand why being how they own them now.

Well youve got to hand it to the government they have really done a heck of a job helping Fannie Mae out, for instance today the stock is up to $0.41. Wow, doing so well, I remember when it was $150 or so, where it was at the top of the market.

Today, right now is definitely the best time even if rates dont get down to the 4% point. The beauty of it and were going to talk more about this in a later segment, is that we have seen a 51% decline in home values from the peak of the market. So you dont have to have the absolute greatest interest rate in order to be able to buy a house today. The median home price right now is $130,000 in Maricopa County, it was $264,000 just two years ago.

So the median home price is $130,000? We are going to talk a little bit about what a person has to make to actually qualify for that. Well it is definitely well within the means of a median income family. Right now a median income family makes about $64,000 in the state of Arizona according to the US Census Bureau and HUD. I ran some numbers today, I think at 6% interest and at that rate they can buy a $280,000 house. So you can buy twice the median home price if you are making just what the median income family would be in the state of Arizona. So the median household income buys double the median priced house in Maricopa County. That is correct, at 6% interest.

And the reality of it is interest rates are not even that high right now. So for people to be waiting for that perfect interest rate of 4% it doesnt really matter if it gets here or not because right now is such an incredibly fabulous time to be buying a house. There are so many foreclosures out there on the market right now, there are so many short sales out there on the market right now, and the point you made earlier is very important, that people have to get in and get prequalified, know exactly what they can buy. Now in many cases you are going to need a down payment, so get with your mortgage broker, get with Velocity Financial and start working on that program of getting those funds together for the down payment as well.

Dan Havey we talked in the past about whats available for financing these days, interesting to give little pat on the back for Velocity Financial is one of less than 15% of all of the lenders in the state of Arizona that are qualified to do FHA financed homes. Now FHA financing, people used to think it was only for first time home buyers, thats no longer the case. The FHA loan which only requires 3.5% down payment it doesnt matter if you have owned a home before and in many cases you can own another home now so long as your new purchase is going to be your primary residence you can utilize FHA financing and put only 3.5% down.

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