Saturday, February 14, 2009
Friday, February 13, 2009
Loan Modification Information
There's lots of talk with homeowners around Gilroy who are upside down on their mortgages and trying to figure out what to do. HUD (U.S. Department of Housing and Urban Development) has a lot of information. Here's some information from Rick Soukoulis, the President of Intero Mortgage, which is a sister company to our borkerage, Intero Real Estate Services. You may find it interesting.
...Any company offering Loan Modification services must be DRE approved. A lot of supposed Note Mod companies are springing up overnight, many not licensed, and a fair number being run by shoddy and often unethical operators.
There needs to be a Modification officer/originator involved in the process, one who is trained in Loan Mods, and one who will take responsibility for moving your case forward in a timely manner.
Next, the Loan Loss Mitigation Officer needs to be experienced and must be trained, must understand what various lenders want, what they’ll accept and what they won’t accept.
...Any company offering Loan Modification services must be DRE approved. A lot of supposed Note Mod companies are springing up overnight, many not licensed, and a fair number being run by shoddy and often unethical operators.
There needs to be a Modification officer/originator involved in the process, one who is trained in Loan Mods, and one who will take responsibility for moving your case forward in a timely manner.
Next, the Loan Loss Mitigation Officer needs to be experienced and must be trained, must understand what various lenders want, what they’ll accept and what they won’t accept.
And finally, there should be an Attorney working with the company who understands all the subtleties of Loan Modifications.
Having an Attorney or law firm involved in the process does not change the fact that anyone meeting with a consumer to help with a loan modification MUST be licensed by the DRE. These “Modification Originators” must follow all the same rule as any DRE licensee.
Let’s now go into some greater detail about modification themselves.
First, who qualifies? The simple answer here is that the more dire your circumstances, the more likely you are to qualify. The six commonly acceptable reasons are
Having an Attorney or law firm involved in the process does not change the fact that anyone meeting with a consumer to help with a loan modification MUST be licensed by the DRE. These “Modification Originators” must follow all the same rule as any DRE licensee.
Let’s now go into some greater detail about modification themselves.
First, who qualifies? The simple answer here is that the more dire your circumstances, the more likely you are to qualify. The six commonly acceptable reasons are
- High loan-to-value, higher than 90%
- Bad credit due to late payments on credit cards, mortgage, medical bills, ect.
- Adjustable rate loan has or will adjusted in the future
- You have a negatively amortizing loan
- Temporary or permanent financial hardship (i.e. job loss, medical emergency, divorce, income reduction ect.)
- High debt to income ratio’s.
What kind of modifications can the borrower expect? It could be converting the loan from adjustable to fixed, lowering the rate, extending the term from 30 years to, say, 50 years, or actually reducing the amount owed to the point where there is some equity and the borrower can afford the payments.
There can be variations and there can be combinations of the above.
Interestingly, loans mods have been going on for over a year now, and the banks are finding that the most effective way is to forgive a part of the amount owed. The borrowers who get this tend to perform better than the others.
The next big question is what the heck are the banks trying to accomplish.
As for the banks, their overriding goal is to avoid foreclosing and taking any more real estate onto their books. They’re not being nice guys necessarily. It’s just that they’ve found that their losses on Loan Mods are significantly less than foreclosing and trying to sell the property.
If you or someone you know is having difficulties with their mortgage, it’s a great time to try for a modification. To repeat myself, just make certain you go to a company with trained and knowledgeable Modification Officers and are experienced in Loss Mitigation , one who has an attorney on staff, and one that increases your odds of getting what you want and what you need.
Team Patereau can help you connect with appropriately licensed and capable loan modification companies. Please give us a call to discuss your specific needs.
There can be variations and there can be combinations of the above.
Interestingly, loans mods have been going on for over a year now, and the banks are finding that the most effective way is to forgive a part of the amount owed. The borrowers who get this tend to perform better than the others.
The next big question is what the heck are the banks trying to accomplish.
As for the banks, their overriding goal is to avoid foreclosing and taking any more real estate onto their books. They’re not being nice guys necessarily. It’s just that they’ve found that their losses on Loan Mods are significantly less than foreclosing and trying to sell the property.
If you or someone you know is having difficulties with their mortgage, it’s a great time to try for a modification. To repeat myself, just make certain you go to a company with trained and knowledgeable Modification Officers and are experienced in Loss Mitigation , one who has an attorney on staff, and one that increases your odds of getting what you want and what you need.
Team Patereau can help you connect with appropriately licensed and capable loan modification companies. Please give us a call to discuss your specific needs.
Monday, February 09, 2009
FICO Scores
We all know how important FICO scores are so here are some basics to enhance your FICO knowledge.
Good borrower credit scores help make it possible to qualify at better rates. This is how FICO Scores are weighted and structured:
35% by Payment History
30% by Balances Owed
15% by Length of Credit History
10% by New Credit
10% by Types of Credit in Use
And the overall calculated ranges:
720 - 850 Excellent, A-paper credit, the "good-guy" rates available
680 - 719 Good, not much of a compromise on rates
620 - 679 OK or Fair, clearly in range for FHA consideration
580 - 619 Low, bottom of the range for FHA consideration, "alternate credit" comes heavily into play
500 - 579 Poor, truly nothing can be done without credit rehabilitation
Good borrower credit scores help make it possible to qualify at better rates. This is how FICO Scores are weighted and structured:
35% by Payment History
30% by Balances Owed
15% by Length of Credit History
10% by New Credit
10% by Types of Credit in Use
And the overall calculated ranges:
720 - 850 Excellent, A-paper credit, the "good-guy" rates available
680 - 719 Good, not much of a compromise on rates
620 - 679 OK or Fair, clearly in range for FHA consideration
580 - 619 Low, bottom of the range for FHA consideration, "alternate credit" comes heavily into play
500 - 579 Poor, truly nothing can be done without credit rehabilitation
Just for your information, FICO stands for Fair Isaac Corporation, wtih Fair and Isaac being the last names of the two men who created the corporation as well as the scoring scenario.
If you would like to discuss your FICO score or other real estate mor mortgage questions, please contact us!
If you would like to discuss your FICO score or other real estate mor mortgage questions, please contact us!
Subscribe to:
Posts (Atom)