Tag Archives: mortgage
New Steps Towards Conclusion Of Loan Modification
The Obama government is now putting pressure on the mortgage firms to speed up the process of confirming the mortgage loan modification procedure for the numerous homeowners. Many applicants have criticized that banks and lenders are beating about the bush. They are not responding to the calls and applications from homeowners. The companies are losing their paperwork, or delaying evaluations.
The treasury department has initiated some new measures to speed up the loan modification procedure. Lenders are required file their attempts to finalize the loan modifications of homeowners who have accomplished the three-month trial period. Also, the department has asked the lenders to put up new resources to help new homeowners who want apply for home loan modification. More than 650,000 homeowners started with the Obama Home Affordability program. However, very few of these homeowners have shifted to the permanent program, despite the fact that they have successfully completed the ninety-day trial period. The administration is making every effort possible to accommodate the homeowners who have recently applied for mortgage modification to stop foreclosure.
Mortgage firms are required to submit a report on the homeowners who are on the verge of completion of their trail period, and a schedule to transfer the successful cases onto a permanent scheme. The service providers are also obligated to submit to the treasury department documents supporting the same, and inform their decisions to the respective homeowners. Lenders who participated in the program, but fail to meet the requisites may be penalized.
The home loan modification program came into effect in March, 2009. The government had pledged $75 billion into the project. Already, $30 billion has been invested. The plan focuses on lower mortgage payments, and save home of every possible homeowner in distress. Interest rates were reduced awfully low, and monthly installments were brought down to less than 31 percent of the monthly income of an individual. These adjustments will be made permanent once the homeowner is current on the loan for the three-month trial period. However, there are extensive complaints of homeowners being asked to verify their documents again and again. On the other hand, lenders have reported that they are overwhelmed by the response and hence, unable to keep track of the proceedings.
To help mortgage firms speed up the loan modification process, the administration said it will work with them to set more rigorous performance measures, such as average waiting time for borrowers, document management, and response time for successful applications.
Refinance Your Home Loan-Some Useful Advice (Page 1 of 2)
To say that hundreds of thousands of Americans are struggling to keep up with their mortgage payments in the midst of the current housing market crisis would not be an exaggeration by any means. Foreclosure statistics at present are nothing short of alarming, and families continue to lose their homes at a very saddening rate.
Should you find yourself in a similar position, burdened by the weight of a mortgage commitment that you are battling to cope with, one option which may well be worth your consideration is home loan refinancing. Home loan refinancing is not the ideal solution for everyone, but it can certainly result in circumstances that are easier to manage and maintain in a number of cases.
When is refinancing appropriate?-There are various situations in which refinancing your home loan is worthy of consideration. In cases where an adjustable-rate mortgage is in operation and the interest rate has reset to a higher rate than the initial low rate, it may be a good time to refinance. The good thing about adjustable-rate mortgages is that the interest rate can be tweaked over the loan term. That can be advantageous at times when rates are in decline. However, it is important to bear in mind that you may still be paying more each month in spite of this flexibility than you would be with a fixed-rate mortgage. It depends on what interest rates are doing at any given point in time.
Considering the cost factor-When seriously contemplating the refinancing of your home loan, it’s important to consider how long you realistically see yourself living in your home. Closing costs associated with mortgage refinancing can often run into the many thousands of dollars. You need to think about what period of time it would take for you to break even again.
For example, consider a situation where a 1% drop in the interest rate would lower your mortgage payment by one hundred dollars. That represents a significant saving for many people. However, if the closing costs associated with your loan refinancing add up to three thousand dollars, it means that it will take a period of 30 months before you recover the cost. This is less of an issue if you know that you will be living in your current home for many years to come. The converse is also true of course. If you feel that there’s a strong chance that you would be moving in the next 2-4 years, then that refinancing option begins to look less attractive.
The equity in your home-Another important factor to bear in mind is how much equity you have in your home at the time you are thinking about refinancing. Most lenders will not entertain the idea of refinancing if there is less than twenty percent equity in your home. While it’s true that having an equity amount below twenty percent does not necessarily disqualify you, it does mean that you will not receive the best rate possible.
Furthermore, if you’ve been living in your home for quite some time and have accumulated a significant amount of equity, you may well be able to save even more by refinancing an amount that is significantly smaller than the initial loan that you qualified for. At the end of the day, that means more money in your pocket at the end of the month.