I had heard of loan modification for many years. In a few cases I actually helped some of my customers with loan modifications. In most cases however, I felt and guided my clients to other avenues that I felt would help them best. However, with the economy and credit and all the other new things going on in America right now, I have taken a second look at this whole Loan Modification idea. After searching high and low, I have found a program that I believe satisfies a client’s needs in a straight forward way.
Since the time the world economic crisis hit the American society, numerous American homeowners found themselves struggling to make their monthly mortgage payments due to the increase of their interest rate or because of the households’ significant income reduction. On many instances the things went so bad that some families moved close to facing the horrifying threat of their homes running the risk of being foreclosed.
A home loan modification is much like a mortgage refinance in that the objective is to find you a more affordable mortgage payment for your financial situation. In fact, it is often called a modified refinance. The primary difference is that instead of looking for a “new” loan you will just simply “modify” the terms of you existing mortgage with your current mortgage lender. Rarely does a person change their mortgage company when they seek a Home Modification Plan.
Some of the more common loan modification qualifications are:
- You have had a documented hardship of major change in your personal financial circumstances
- You have missed 3 or more payments, usually referred to as 90 day delinquent.
- You own and live in the property as your primary residence
- You have not filed bankruptcy
- You don’t purposely default to get a loan modification
- Actively seek to be responsible in working with your lender
On October 1st, 2010, HAMP officially implemented the new PRA or Principal Reduction Alternative guidelines for HAMP loan modifications. If you are struggling to make your mortgage payments and your house is underwater (you owe more than it is worth) you should be getting excited! Under the new Principal Reduction Alternative Guidelines, servicers evaluating HAMP modifications must do a mark to market loan to value (MTMLTV) ratio on any loan greater than 115 percent. If the loan is applicable, a principal reduction then becomes the next step to reducing your monthly payments to the 31% monthly income cap.
Under the previous guidelines, to make the 31% monthly income cap servicers would reduce the interest rate, extend the loan terms (30 to 40 years) and only use principal reductions as a last resort.
This should dramatically increase the amount of principal reductions for homeowners who are having trouble making their monthly mortgage payments. Homeowners must make timely mortgage payments after the HAMP principal reduction alternative program has been completed for them to receive the full benefits of this program.
These solutions offered by the Home Affordable Modification Plan should dramatically help many consumers. This federal government sponsored program is intended for helping millions of homeowners to save their homes. Of course, this is being backed by the Federal Government and that means it is being participated by the majority of lenders across the USA. Even if the program doesn’t cover all borrowers, still many of those who are able to provide proof of their income along with meeting certain other criteria do qualify for having their mortgage loan modified, in some form, provided they take the necessary steps and apply for their loan modification instead of waiting in hope their situation will get settled on its own.
Loan Modification Wizard – You can do this – A fast, effective program that takes you step by step through the Loan Modification Program. You just can’t go wrong. Learn more about the Loan Modification Wizard.
If you failed with making one or several scheduled monthly mortgage payments or if you feel the hardships you are experiencing are likely to make it hard for you to fulfill your mortgage repayment obligations in the near future unless the interest rate on your loan is reduced, it is extremely important that you do not wait another day. You need to get with someone that can help you with negotiating your loan modification terms with your lender based on the new Home Affordable Modification Plan provisions.
If foreclosure is in your horizon, do not worry. There may still be some opportunities for you. The Federal law provides that the foreclosure process must be stopped while you are being considered for the HAMP.
If this is your first mortgage on your primary residence, which originated before 1 January 2009, and if your monthly mortgage payment also exceeds 31% of your gross monthly income, you should contact someone today about the HAMP program or if you are inclined to do this type of thing yourself and have the where for all, you need to act quickly so that a loan modification plan can be worked out for you.
Monetary incentives are abounding for the banks and other mortgage lending companies through the current HAMP program. Currently there are 75 billion dollars in subsidies coming through HAMP. As I said, this makes for a very lucrative monetary incentive for the banks to co-operate with borrowers who qualify.
Here is the checklist of the financial documentation you are advised to have in your disposal while talking to your loan servicer asking to consider you for loan modification under HAMP:
- Information about monthly gross income, including recent pay stubs, if you are the borrower who receives salary
- Documentation confirming income you receive from other sources, if any
- Your latest income tax return
- Information about your assets
- Documentation confirming any subordinate lien mortgage on your home
- Account balances and minimum monthly payments due on all of your credit cards
- Account balances and monthly payments on all other debts (say, car loan)
- A hardship letter explaining why your mortgage has become not what you can currently afford (for example, your expenses could have increased because of the urgent need to undergo an expensive medical treatment)
These should cover also other borrowers, if any.
Have questions? Looking for assistance? No need to hire an attorney – you can have your loan modification done with ease using the Loan Modification Wizard, designed to lead you step by step through the entire process of your home loan modification.
Congress made a change in the credit card laws. This credit card change will apply both to the consumer and to the companies that issue credit cards to consumers. First we should give you the definition of this law that was changed. The law that I am speaking of is called The Credit Card Accountability Responsibility and Disclosure Act of 2009. In short it is defined as the “Credit Card Act of 2009” or the “CARD Act”. The definition of the CARD Act is this: a major credit card reform legislation that will establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.
Okay then, what does this mean to you as the consumer who uses credit cards on a regular basis? If you are a high risk consumer and have bad credit, this credit card change will not be good in how it applies to you. One of the biggest credit card changes you will see is the lowering of high fees on credit cards. These are credit cards that are given to people with poor credit. This credit card has a low limit but then adds charges of extremely high fees right up front. The credit card company feels justified in doing this as these people are high risk and they need the money from these consumers as they feel that they may not get any money paid back to them. Now think about this for a second. If you know that they are a high risk, why even give them a credit card to begin with? The answer is people with high risk should not be given credit cards at all. These people should stick with prepaid credit cards or obtaining a secured card through their bank.
Another issue might be to look and Survival. What I mean is that if you are having a lot of troubles paying all your monthly credit bills, look at a means of surviving the future onslaught of collectors that are about to swoop down on you and your family. You can learn how to frustrate debt collectors and collection attorneys, avoid a credit card debt summons and most importantly, stay out of bankruptcy.
Here are a few things you should focus on:
- Not having to choose between monthly necessities and credit card bills.
- Stop worrying about not paying your credit card debt.
- Not having to cave into debt collector demands and payment schedules.
- Knowing the best answers for your particular problem if and when you need them.
- Not making bad decisions, if debt collectors are at your doorstep.
- Saving time when there is little time to respond to a debt collector or collection attorney.
- Being able to preserving the privacy of your financial affairs.
- Avoid bad-debt consequences and maintain control of your life.
- Not losing money you do not have to pay debt settlement, debt negotiation or debt consolidation companies.
Here is a great resource for Surviving Credit Card Debt
So what does the CARD law mean to you if you are not a high risk person, you have good credit? Well, if you are one that looks at lower interest rates that cards offer and transfer balances frequently, you will not have this luxury any longer. It will not be gone completely, but the lower rate will be for a much shorter period of time. You may not think that it will even be worth doing the transfer to begin with.
If you are a small business owner and have company credit cards, the CARD Act may not apply to you. As of now, the CARD Act applies only to consumer cards. But don’t hold your breath thinking you are out of the woods. Credit card changes could be coming down the pike even as we speak.
As for small businesses, there is a Gold Business Select program that guarantees you access to a team of experts in the field of business credit who can walk you through the process of what it takes to establish hundreds of thousands of dollars in Business Funding. You can reach them at Business Select Program.
What if you do not have any credit cards, but you do use your banking credit card, which really is a debit card? One good that I see in continue using a debit card is that you can no longer be charged for overdraft fees. Your bank must give you a form to sign stating that you do not mind being charged overdraft if you do go overdrawn. In other words, you “opt in” before the bank can charge you these fees.
What if you use a gas credit card offered by an oil company? The CARD Act will influence this type of card. For instance, if they offer a revolving feature in payments of the card, this will be more expensive for you in higher interest rate. They will also lower the refund amount in which you get in return for using their credit cards.
If you are one to use prepaid credit card or gift cards, the CARD Act will allow the company to have pre-purchase disclosure fees. This might include an inactivity fee. Most of these cards will now have an expiration date. They may also limit you on the amount of money you can load onto the card. The companies that issue these cards feel that they have no choice in enacting these fees as they really do not make much money on them to begin with.
If you have credit cards that offers you rewards for your purchases, this will have changes as well. No longer will rewards just be given to anyone, but rather, you will have to apply and see if you qualify for the program up front. Companies are screening their customers more closely to see who should be allowed the rewards and who should not. Companies are looking more of doing away with rewards and cater more towards the individual spending habits of their clients and issue “rewards” on their personal likeness.
Student credit cards will now be a thing of the past. The CARD Act prohibits marketing of credit cards to anyone under the age of 21. A student must now show proof of income or have a parent co-sign to get the credit card. These cards have low credit limits and higher interest rates. Some companies are offering discounts on coffee or textbooks if you are good and pay your bill on time. This way the student can use the discount immediately. However, more students are given prepaid credit cards or gift cards instead of credit cards.
The CARD Act creates lots of changes for all kinds of credit card users. It really depends on which type of credit cards you use to determine how you are affected.
I hope this gives you a better understanding of the changes in the law and how it relates to you. Let me know if this information was good for you.
What is fast debt reduction? Fast debt reduction is really another name for debt management and it is different than debt consolidation. However, most people believe that fast debt reduction is the same as debt settlement. This is not true. Fast debt reduction is reducing your debt fast.
Fast debt reduction, or debt management can be done by you. I have not found any company out there that will give you help in fast debt reduction without doing some sort of debt settlement. We do not want to do debt settlement. We want to have debt relief by getting rid of all our credit card debt and pay off our credit card debt as we know that we owe the money. Let’s face it, we used the credit cards and acquired debt to buy things that we wanted and it only makes it right that we pay back what we actually owe.
Paying back the money that you owe and that you actually borrowed from the credit card company is very different than what it is they say that you currently now owe. This is also assuming that you have been delinquent on making your monthly payments. The credit card companies have increased the interest rate so high that it nearly makes it impossible to ever pay back what they say you owe. This is when you get into real financial trouble and need to do something to get your finances under control. This is when you really want debt relief.
So what is fast debt reduction? It simply is another form of debt management, debt consolidation or even debt settlement to obtain debt relief in a short period of time. Some people even consider fast debt reduction an actual debt consolidation loan as they now only have one payment to make each month rather than many.
If it is fast debt reduction that you are seeking, I have several companies that I can recommend to you. It will depend on what you are really looking for. If you are looking for debt management, then debt consolidation or a debt consolidation loan might be the answer for you. This process will help you to manage your money and teach you how to live on cash. This is a good way for true debt relief from your credit card debt. The key is to get rid of the credit card debt, learn from it and never to rely on credit cards again.
Good Luck with whatever you choose to do. Let me know if I have been of help for you.