How the new mortgage plan works Q & A

My comments/summary:

  • You must not have missed a payment to qualify. Ok, so you have to keep making payments to again be disappointed by the outcome the mortgage company provides. Seems to me it is another way to squeeze some more money out of you the troubled homeowner. Remember there are no guarantees with any of these programs and I still believe it comes down to cut your losses now don’t wait. Clean up your credit after the short sale (roughly 2 years) and position yourself to buy another home. Only you can know if this is right for you or not.
  • It gives unemployed people a 3-6 months break on paying their mortgage to find another job. In this economy? You have to be kidding. Jobs are not exactly falling off the shelf.
  • If you don’t find a job within the 3-6 months they will consider you for a short sale. Again my advise short sell it now since values are not going up that fast.
  • You can not spend more than 31% of your monthly income on your mortgage.
  • Mortgage companies that already participate in the government’s foreclosure prevention program will have to consider reducing the mortgage amount for borrowers who owe at least 15 percent more than their home’s current value. Those reductions will happen gradually over three years and apply only if you miss no payments. Those companies will receive expanded incentives to do so. They do not say how much they will reduce your mortgage amount. I will wager you will still have tons of negative equity since they are not in business to give away money. They have always provided the lease amount of assistance possible period.

The Florida Association of Realtors has put together this explanation. http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=236761

More mortgage aid information

This article writes about the new aid for homeowners. It details this will delay many foreclosures since many will not qualify for the aid. I stress this could lead you as a homeowner to an actual foreclosure not a short sale, why? If you have an HOA that is not being paid it becomes more and more overdue. This creates a huge problem when negotiating the short sale. To find out why see my videos.

http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=236723

Article on how most programs delay foreclosure

This is why I always say do the math and does it really make sense. Experts are agreeing. This is why I say short sell it now rather than delay the inevitable.

DELAYING FORECLOSURES?

In its latest monthly report, Treasury said there were 1,003,902 active loan modifications through February and 168,708 of those have been made permanent. That was up from 946,735 active loan modifications and 116,297 permanent loan modifications through January.

But just 2.8 percent of the 6 million borrowers with loans delinquent more than 60 days have had their loan modifications made permanent through February.

And the number of homeowners with loans delinquent more than 60 days is rising far faster than the number of loans being made permanent each month.

As of January, there were 5.6 million homeowners who were 60 days or more behind on their payments. That means about 400,000 more people fell behind on their payments from January to February, compared to about 50,000 who received a permanent modification in that same period.

Approximately 2.8 million homeowners received foreclosure filings just in 2009, and millions more are expected in 2010, with some estimates predicting that the number will eclipse the already staggering 2009 number, the report said.

Barofsky urged Treasury to develop other performance metrics to measure over time the implementation and success of HAMP.

He suggested Treasury could set goals for mortgage servicers to achieve a certain percentage of modifications relative to the number of loans in default or measure the number of loan modifications relative to overall foreclosures.

“If HAMP ends up being a foreclosure mitigation program that merely delays foreclosures rather than preventing them, the program will be of questionable value, particularly in light of the huge investment of taxpayer funds,” Barofsky wrote.

New Obama plan – April 5th What it means to you

Careful assumption this plan will help you should be undertaken.

  1. If you have a Fannie or Freddie loan then you do not qualify. This is roughly 60% of you. You can go to http://loanlookup.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/ to find out if your home qualifies.
  2. You will not qualify if this is a 2nd home or you are an investor.
  3. Remember these are guidelines not law so the lender can do what they want still.
  4. The plan says 2nd mortgages are to get $3000 and waive their rights to any further collections. Right now we typically get them more than $3000 and they still don’t waive their rights in writing. Remember they are in business to make money.
  5. Consider how much negative equity you have in your home. How long will it take for your home to increase in value? I can tell you from a real estate professional standpoint it will take a long time. Values in Florida are not going up that fast. Not anymore.

These new plans the government implements are very frustrating for all of us involved. They typically help 10-15 percent of distressed homeowners. I suggest if you think you qualify you try it and see what the results are before working with us to do a short sale.