FreeDIYkits Loan Modification Blog

Q: I like your advice, and you seem to have a lot of it regarding the current loan modification program. I have applied for a loan modification, but I’m in the waiting period.

However, since mortgage servicers receive $1,000 for every loan modification request they put in, does it really make sense for them to process the request and then sell the loan to someone else?

It would be really shady for this to be happening, but I’m starting to think that is the current game. Is this what’s going on?

A: A senior official from the Treasury Department tells me that lenders do not receive $1,000 just for requesting a loan modification or submitting an application. I’m not sure where this rumor started, but it is certainly making the rounds.

A great video posted by the Government’s Making Home Affordable Website. This educational video teaches you how to survive your trial modification period, so that your loan modification stays permanent. Gives a complete list of all required loan modification documents, and much more. A must see for anyone who is in a trial loan modification period.

WASHINGTON – The U.S. Department of the Treasury and Department of Housing and Urban Development (HUD) today kick off a nationwide campaign to help borrowers who are currently in the trial phase of their modified mortgages under the Obama Administration’s Home Affordable Modification Program (HAMP) convert to permanent modifications. The modification program, which has helped over 650,000 borrowers, is part of the Administration’s broader commitment to stabilize housing markets and to provide relief to struggling homeowners and is a primary focus of financial stability efforts moving forward. Roughly 375,000 of the borrowers who have begun trial modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year. Through the efforts being announced today, Treasury and HUD will implement new outreach tools and borrower resources to help convert as many trial modifications as possible to permanent ones.

The Obama plan includes tools to modify existing bad loans, reports Bill Plante, but economist Mark Zandi tells Harry Smith there may not be enough money to end foreclosures.

If you’ve fallen behind with your mortgage and facing foreclosure, don’t panic and do nothing. It isn’t the time for in-action because with guidance, you may have options. Here’s what you need to know if you want to save your home from foreclosure.

Officials from the Treasury department met with lenders yesterday in yet another attempt to get them to step up the pace of loan modifications. As of the end of September, 14% of all home owners with mortgages are either behind in their loan payments or in some phase of the foreclosure process. This is a record level of mortgage delinquencies, for the ninth straight quarter.

Q: I worked out a modification with my loan servicing company, and a third-party loan counselor was involved as well. I signed the paperwork, made the down payment on time and then made the first payment according to the agreement.

But this week I received a letter from a law firm that said I had 90 days to be out of my house! Please tell me, can they do this?

The Obama Administration is gearing up to play hardball with mortgage companies that only temporarily lower struggling homeowners’ monthly payments. But as the drive to make more loan modifications permanent kicks off, there’s a weightier question to ask: Can the government’s $50 billion foreclosure-prevention initiative deal with the crisis as it now exists?

Many homeowners were excited to find out about the making home affordable home loan modification program back in February and March. The idea the program was to allow homeowners to lower their monthly mortgage payment to less than 31% of their household monthly income. Unfortunately, this process takes a great amount of paperwork and it is becoming very difficult for lenders and borrowers to understand.