Loan Modification Information

PMI INTRODUCES NEW VIDEO TO HELP DISTRESSED HOMEOWNERS

Navigating the U.S. Treasury’s Home Affordable Modification Program (HAMP)

Walnut Creek, CA, November 19, 2009 /PRNewswire/ — PMI Mortgage Insurance Co., (NYSE: PMI) today introduced a new video to help homeowners experiencing financial hardship understand the benefits of the Home Affordable Modification Program (HAMP) and how they can take advantage of this important program. HAMP is the national loan modification program offered in the Obama Administration’s Homeowner Affordability and Stability Plan which mortgage servicers are implementing broadly to bring long-term affordability to homeowners struggling to keep their homes. Navigating the Home Affordable Modification Program, one of the first videos available for homeowners, explains the benefits, eligibility requirements and types of adjustments that can be made to mortgage loans. The video also provides a realistic example of a couple’s experience before-and-after receiving a HAMP modification.

“Foreclosure prevention is critical to the U.S. housing market and the stability of communities,” said John Jelavich, head of PMI’s Homeownership Preservation Initiatives group. “Distressed homeowners who are facing the prospect of losing their home need to know that help is available for those truly interested in saving their homes. This instructional video leverages the growing popularity of internet-based video to give homeowners an overview of how HAMP works and their important role in the process.”

Navigating the Home Affordable Modification Program is divided into two parts. Part I is a basic orientation for viewers who may not have heard of HAMP, the objectives of the program, how to determine if your loan is owned by Fannie Mae or Freddie Mac, and how to find out if you qualify. Part II discusses the information homeowners need to provide their mortgage servicer, demonstrates how affordability is achieved through a realistic example, and the steps homeowners need to take to ensure success in modifying their loan.

Additional information about alternatives to foreclosure can be found on www.HomeSafePMI.com. Sponsored by PMI Mortgage Insurance Co., the site offers a Mortgage Options Assessment Tool that enables homeowners to organize, calculate, and produce reports on their current financial situations prior to meeting their servicer or counselors to discuss solutions to foreclosure. This free tool is available to anyone.

About PMI Mortgage Insurance Co.

The PMI Group, Inc. (NYSE: PMI), headquartered in Walnut Creek, CA provides credit enhancement solutions that expand homeownership while supporting our customers and the communities they serve. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products. For more information: www.pmi-us.com.

Why Is HAMP Not Working?

Great interview Brian Lehrer from WNYC did about HAMP and modifications.

http://www.wnyc.org/shows/bl/episodes/2009/09/15/segments/140724

Want To Modify or Short Sell Your House? FICO Wants to Knock 50+ Points Off Your Score

In the Friday’s edition of the South Florida Sun-Sentinel, Harriet Johnson Brackley had a great article about FICO penalizing homeowners for trying to navigate their way through this housing mess.

As if there weren’t already enough to worry about on the foreclosure front, let me warn you about yet another troubling detail you may not have heard about, if you’re trying to modify your mortgage:

Starting in September, there’s a new guideline for how lenders can report a loan modification to credit bureaus. They can…

http://www.sun-sentinel.com/business/realestate/condos/sfl-credit-harriet-brackey-081609,0,514033.column

New Software Automates Loan Modification Applications

Compliance Consulting Corporation has just released Modification Assistant, a new software program that simplifies the preparation of loan modification applications.

Modification Assistant contains a modification calculator and all the standard documents required on loan modifications, including the borrower’s authorization, loan summary, financial needs analysis, and an affidavit of hardship.

The modification calendar is a key feature. It analyzes the borrower’s current financial situation and generates proposed terms for presentation to the lender. Modification Assistant uses these terms to create a detailed executive summary containing strong reasoning in favor of modifying loan terms.

“Every professional modification application package should contain an executive summary of the borrower’s financial situation, proposed terms, a current valuation of the property, and the potential benefit or loss to the lender,” says Christopher Lovell, Executive Vice President of Compliance Consulting Corporation. “We have found that many talented modification specialists hit a wall when trying to craft the executive summary.”

Modification Assistant automates the process of creating an executive summary, summarizing information that mortgage professionals enter when using the program. These professional can evaluate the program by downloading a free, limited-use version from the Compliance Consulting Corporation website, www.complianceconsultingcorp.com.

For more information about Modification Assistant, please call 561-586-3645.

Mass AG Makes $50M Home Rescue Pact

AG: Wall St. giant to cut loan amounts, payments

Under the terms of the agreement, Goldman will reduce the principal of 714 first mortgages they hold (or service) by up to 30 percent and reduce second-mortgage amounts by 50 percent or more. This will allow borrowers to replace ….

Read the rest of the article here:

http://www.bostonherald.com/business/real_estate/view.bg?articleid=1171679&srvc=business&position=0

Gretchen Morgenson from The New York Times wrote a great piece about Mods. Here’s the link if you missed it.

A Reality Check on Mortgage Modification

WE are almost two years into the housing storm and foreclosure floodwaters continue to rise. A record 800,000 homes received….

http://www.nytimes.com/2009/04/26/business/26gret.html?_r=1

CNBC’s Diana Olick wrote about MFI-Mod Squad on her blog!

It’s a really cool article.  It’s about a solicitation letter a mod company was sending to immigrant homeowners here in South Florida that I managed to get my hands on.

http://www.cnbc.com/id/30193867

CNBC Features MFI-Miami Owner

Steve Dibert, owner of MFI-Miami and MFI-Mod Squad, appeared on CNBC on Tuesday, January 27, 2009. Click here to view the TV segment featuring Steve.

Click here to view the TV segment featuring Steve.

What is a Loan Modification and what questions should I ask the Modification company?

What is a loan modification? A loan modification is as the name suggests a modification of your current loan without going through the process of refinancing our home or property. The responsibility of a loan modification company is to act as a negotiator for you with your lender. Because a new loan is not being written, many states have not instituted or modified their mortgage and banking laws to regulate the loan modification industry. This means anyone can open a loan modification company, even those who have revoked mortgage and real estate licenses revoked or have multiple felony convictions.

Several states have begun to reign in loan modification companies by requiring licensing and background checks. Unfortunately, in the rest of the country, it’s still caveat emptor or “Buyer beware”.

Below is a list of questions you should ask when considering a loan modification company:

1. Have you or any of your employees ever been convicted of a felony?

You can follow this up with do you do criminal background checks on your employees? If they have employees with criminal records or they don’t do criminal background checks, look for another company.

2. Do you have a background in mortgage lending? If so what is it?

This is always a good question to ask because it shows the level of their competency and how they operate their business.

3. Can you provide references?

Don’t be afraid to ask to speak to real people. Some companies will post questionable testimonials on their site signed by “Homer S.”, “Monty B.”, “Ned F.” or “Moe S.” For all you know the owner or of one of his employees could have written these testimonials.

4. Is your processing done in house or is it contracted out?

This is a good question because it will tell you if the company is acting as a “middle man” and simply collecting a referral fee. Some services are legitimately contracted out such as the loan auditing or fraud investigating.

5. Do you have an attorney on staff?

This is a great question for two reasons. If they say, yes, then ask for their name and feel free to check them out with the state bar association. Having an in-house legal staff also gives the loan modification company legitimacy because it means they can handle any legal situations that may arise during the negotiations of the modification. If the loan modification uses outside attorneys, it’s a sign that the loan modification company could be acting as a soliciting agent for a law firm which is illegal in most states. Consumers also need to keep a watchful eye on attorneys who allow the loan modification company’s staff to use their letter head and fax cover sheets. In most states this considered unethical behavior by the attorney. If you suspect this do not hesitate to contact the state bar of where that attorney is a member.

6. Do I need to be late in order to make this work?

No. Although it may help expedite the process in certain cases, it is not mandatory

7. How long does this process take?

It can take anywhere between two weeks to six months depending on the lender and the complexity of the file.

8. If I can’t get a modification completed – what can be done?

There is a whole menu of resolutions available. There is litigation (in cases of deceptive practices), short-sale, short-payoff, deed-in-lieu, or forbearance.

9. Are there any guarantees?

Be careful of loan modification companies that offer or guarantee specific results because they don’t know what the final terms will be.

10. What are my costs and can you put this in writing?

There are two ways loan modification companies charge. They either charge a flat fee or a fee based on a sliding scale depending on the size of renegotiated payoff or by the size of your first payment. If they are unwilling to spell out the terms to you up front, keep shopping. Also, don’t be afraid to shop around. New loan modification companies are popping up everyday which means more competition and better pricing. A loan modification fee should not exceed $2500 and include a forensic mortgage audit.

11. Are you licensed in my state?

More and more states are requiring Loan Modification companies to be licensed in the state the property is located. California, Colorado, Florida, Maryland, Massachusetts and New Jersey, and New York all have very strict state specific requirements for modification companies. Most Loan Modification companies are NOT licensed outside of the state they are located in. The modification company will offer you a plethora of excuses on why they don’t need to be licensed in your state. If in doubt, call your state capital and find out. Only you can protect yourself by asking the right questions!