FreeDIYkits Loan Modification Blog

The Obama administration is facing increasing pressure from lawmakers and housing advocates to retool its troubled mortgage relief program a year after its debut as the housing crisis continues to deepen and spreads to more creditworthy borrowers.

The $75 billion program pays lenders to modify the mortgages of troubled borrowers, typically lowering their payments by about $500 a month.

But so far, fewer than 200,000 borrowers have received a permanent change to their loans, according to Treasury Department data released Wednesday, a small fraction of the 3 to 4 million borrowers who government regulators initially said the program could help before it expires in 2012. That may not bode well for efforts to stabilize the housing market. Credit Suisse has estimated that 3.2 million foreclosures would have to be prevented this year for home prices to rise modestly.

“Clearly the numbers that were discussed by the administration set up an expectation that just don’t deal with the reality we’re in,” said John Courson, president of the Mortgage Bankers Association.

Administration officials have acknowledged that the program, known as Making Home Affordable, got off to a slow start and has yet to reach its full potential. Many lenders didn’t begin enrolling borrowers until last summer, months after the program was launched. By then, the primary cause of foreclosures had shifted from the risky mortgages that helped spur the financial crisis to rising unemployment. The latter is tougher to address because jobless borrowers often have little money with which to pay any type of home loan.

Through January, nearly a million borrowers had gotten at least some reduction in their mortgage payments as part of the program, but more than three-quarters have yet to win a permanent modification and must still prove they qualify, according to Treasury data. The program “is doing the job it was designed to do, Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, said in a statement. “Struggling families are receiving payment relief and the housing market is showing signs of stabilization.”

Many homeowners are finding themselves with an underwater mortgage and are having trouble meeting their mortgage payments on a home with a value less than what the homeowner owes. This obviously causes frustration for homeowners seeing as how no one wants to owe more on a home than it’s worth.

However, despite homeowners who are walking away from their underwater mortgage, many are just looking for help in their monthly mortgage payment. Homeowners feel that the value of their home is bound to rise again, so if they could just make their home mortgage payment more affordable at the present time the underwater status of their home wouldn’t be so bad.

The trouble with having an underwater mortgage is there are few refinancing options as banks are unwilling to refinance a home whose value is less than what is owed in the original mortgage. Refinancing may be an option for a select few homeowners with an underwater mortgage in certain circumstances, but most homeowners will need to look into a home loan modification.

TAMPA – Attorneys and others are scrambling to become mediators following Monday’s Supreme Court order requiring foreclosure mediation for some troubled homeowners.

“There’s a lot of interest in this program,” said Rod Petrey, president of the Tallahassee-based Collins Center for Public Policy, a nonprofit group that trains mediators and assigns them to cases. “We have a roster of hundreds of mediators, and they’re all hungry for more work.”

Chief Justice Peggy Quince issued the order to help handle Florida’s glut of foreclosures. With an estimated 465,000 cases clogging the court system, mediation may help resolve some cases early in the process.

The order applies to new foreclosure lawsuits and requires that homeowners of primary residences be given the opportunity to have their case go to mediation with a third-party. The goal is to work something out between the homeowner and the lender in order to avoid foreclosure.

Choosing a mediator will be up to a judge, although the borrower and lender can request one. Judges typically work with nonprofits, such as the Collins Center, to assign mediators to cases.

Going through the home loan modification process is something that can greatly help you lower your monthly mortgage payment and avoid foreclosure. One of the companies that has done a good job of getting borrowers into a trial period for mortgage modifications is CitiMortgage. At the present time CitiMorgage has approximately 40% of the qualifying mortgages in the trial period.

If you are finding it very difficult to make ends meet financially and you can not make your monthly mortgage payment that a home loan modification might be right for you. Make sure to access the making home affordable website to find out much more information. There is quite a bit of information on this website so make sure to devote a significant amount of time.

There are several mortgage lenders that are having great difficulty getting home loans into modification. You will have to be very persistent with your lender and make sure you have all your documentation available and ready. One of the reasons the borrowers are finding it difficult to get mortgages modified is that they are not providing the proper documentation at the proper time.

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.

Mediation would be a good way to expedite a flood of mortgage foreclosures, a task force said Wednesday, but some panel members disagreed on the details in oral arguments before the state Supreme Court.

The Federal National Mortgage Association — better known by its nickname Fannie Mae — recently announced a new tool intended to keep people facing foreclosure in their homes. Fannie Mae calls this program Deed-for-Lease, and it is sufficiently proud of the program that it claims a trademark on the name.

The first wave of foreclosures in Northern Colorado struck people who were in bad mortgage products: subprime mortgages and adjustable-rate loans that buyers couldn’t pay even if they still had jobs.

With the present economic downturn costing many hard working people their jobs the reality that the housing market crisis could be around for a long time is setting in. Job loss can be the preliminary event in a sequence that leads to foreclosure