“Finally there is good news for California homeowners and help them avoid foreclosure. The new
The California Foreclosure Prevention Act, signed by Gov. Schwarzenegger in February, adds 90-days between the time a homeowner defaults on a loan and when banks can initiate foreclosure proceedings,” states Art Franklin, V.P. AboutCaliforniaLoanModification.com.

AboutCaliforniaLoanModification.com attorneys help homeowner obtain loan modification agreements. These agreements make monthly mortgage payments more affordable.

Assemblyman Ted Lieu, D-Torrance, who wrote the bill states “The goal is to compel banks to do systematic California loan modifications that will reduce the foreclosure rate. California has the highest foreclosure rate in the nation. Until we slow that down, the state’s economy cannot recover.”

Franklin continues “This new law which took effect June 15th. puts the onus on lending institutions to work with homeowners and develop a California loan modification agreement.”

A loan modification agreement usually includes lowering the interest rate, reducing the monthly payment and sometimes substantially reducing the loan balance of the current loan. Homeowners are urged to take advantage of this new law quickly.

Mr. A. from Ontario, California, one of Franklin’s clients that came close to losing his home, states “I know I left it far too late before I called Art. Why is it that, as intelligent humans, we consciously do things that are contrary to our health, wealth or happiness? Not only do we make these decisions but we also rationalize them. For instance, I know I shouldn’t smoke BUT it helps me to relax!”

“I was three months behind with my mortgage payments and didn’t take any action whatsoever. It’s not like I didn’t know what was happening. Was I expecting a knight on a white horse to come up my driveway and make my payments for me? Realistically I knew that wasn’t going to happen and still I was mentally paralyzed. Art’s staff at AboutLoanModification.Com calmed me down, planned a course of action, followed through with that plan and obtained a Loan Modification for me professionally and quickly even though I had already received a Notice of Default.”

Just because you ignore the gas gauge on your car doesn’t mean the situation will improve the longer you leave it. In fact the situation gets worse. If your car runs out of gas on the freeway then you have to address the situation. It also creates more problems. It doesn’t matter what other plans you have that day, you immediately stop your plans, walk to the gas station, get gas and then walk back with a heavier load.”

Franklin continues, “Mr. A. didn’t call us until he received a Notice of Default. He had to take immediate action or be faced with the reality of losing his home. We didn’t let him “Run Out Of Gas” and were able to get an offer on Mr. A’s California Loan Modification from the lender in less than 30 days but the Loan Modification approval can take longer. Most of our clients get an offer for a Loan Modification in 30 – 90 days although we have had approvals in less than 30 days as was the case for Mr. A”.

“We are able to help homeowners through the process physically and mentally because all of our loan modification consultants are mature professionals that are homeowners. Our consultants understand what it means to make a monthly mortgage payment. Our consultants know how it feels to be on the verge of losing your home and can assist clients get through the emotional aspect of the situation.”

Franklin concludes, “Homeowners should move quickly because we feel this new law will create a different kind of run on the banks.”

For more information on California loan modification agreements please all Art Franklin, AboutCaliforniaLoanModifcation.com 877 863 5362 or visit their website at www.aboutcalifornialoanmodification.com

Mr A is willing to discuss his situation and can be reached through Art Franklin.

Serious delinquencies jumped to 6.2% of mortgage-servicing portfolios, an increase of 16.7% from the previous quarter. The number of prime borrowers in trouble continues to mount as 3.6% of prime mortgages were more than two months behind on payments, more than double the number in default a year ago.

Foreclosures in process reached 3.2%, an increase of 9.4%, with more than 1 million foreclosures in process.

Loan Modification Efforts Improving

Yet on the bright side, more people are getting help with home loan modifications. National banks and thrifts implemented more than 680,000 home loan modifications and payment plans in the third quarter of 2009. That’s up 67% from the second quarter, so it appears lenders have finally gotten their act together to help people in trouble with their mortgages.

Between Jan. 1, 2008, and Sept. 30, 2009, lenders implemented more than 2.4 million loan modifications, trial period plans, or payment plans including actions taken under the Obama Administration’s Home Affordable Modification Program. But even with loan modifications, many home owners are finding it impossible to make their payments.

“Despite growth in the number of modifications, modified loans continue to re-default at high rates,” the report said. “Measuring re-default as 60 or more days delinquent or in foreclosure, more than half of all modified loans re-defaulted within six months of modification.

The newer modification programs, however, seem to be showing greater signs of success. “Early indicators suggest more recent vintages with a higher percentage of modifications that reduce monthly payments are performing better than older vintages,” the report continued. “More than 80 percent of all loan modifications implemented in the third quarter reduced monthly principal and interest payments for the borrower. Modified terms were primarily interest rate reductions and term extensions.”

More banks and thrifts are considering decreasing principal balances as well. Mortgage modifications that include principal reductions increased to 13% of all modifications, up from 10% in the second quarter and 3% in the first quarter. Reducing a loan’s principal to a number closer to the home’s true market value not only decreases the monthly payment, but also gives the homeowner more reason to stay in a home that has lost value.

Other Key Trends Found by the OCC and OTS

Payment Option Adjustable Rate Mortgages (Option ARMs) continued to perform worse than the overall portfolio as a result of the added risk characteristics and geographic concentration of these loans. At the end of the third quarter, just 67.7% of Option ARMs were current and performing; 16% were seriously delinquent; and 11.9% were in the process of foreclosure.
Mortgages guaranteed by the U.S. government, primarily through the Federal Housing Administration and the Department of Veterans Affairs, also showed higher delinquencies than the overall servicing portfolio. Serious delinquencies increased to 8.2% of all government-guaranteed mortgages, up from 7.5% in the previous quarter. An additional 2.5% were in the process of foreclosures
Servicers used a combination of actions when modifying loans to achieve payment sustainability. Interest rate reductions were used in 81.1% of all loan modifications implemented in the third quarter of 2009. Term extensions were used in 48.0% of the modifications, while 13.2% included principal reduction. Because 73.6% of all modifications changed more than one term, these percentages exceed 100%.
The Elephant in the Room: Unemployment

Based on these statistics, it does appear that lenders may finally be closer to finding a solution for the home mortgage crisis. Now the question is, how fast can they work to stem foreclosures? Until we see a reduction in the number of foreclosures, we can’t even hope to see stability in the housing industry.

Even with this progress, the elephant in the room that hasn’t been addressed is how to help the millions of people who have lost their jobs stay in their homes. Congressional leaders are pushing to use leftover money from the Troubled Asset Relief Program for mortgage relief for jobless Americans. U.S. Rep. Barney Frank (D-Mass.) wants $3 billion to be allocated to such a program.
His proposal is similar to a more than 20-year-old Pennsylvania program that offers unemployed workers low-interest loans to pay their mortgages. Under that program, borrowers are eligible for loans of up to $60,000 that can be repaid over an extended period with payments as low as $25 a month. The Pennsylvania program has helped about 80% of its participants to stay in their homes.

With 7.5 million people out of work and indications that job creation remains weak, some program to help the unemployed stay in their homes is mandatory if we truly want to stem foreclosures.

Article Source: Daily Finance

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.

But I do know that you can’t just wait for your loan modification to be approved. You have to aggressively stay on top of the situation by calling your lender every couple of days to make sure that the lender has all the information it needs from you and that it’s all together.

According to Obama administration officials, roughly one-third of borrowers who are seeking a modification have failed to provide

lenders with the completed paperwork needed to make their trial loan modifications permanent.

If my mail is an accurate indication, it isn’t just borrowers who are at fault; loan servicers are losing documents and not requesting all the documents needed at the same time.

If you want your loan modification application to get higher priority, send the CEO or president of your loan servicer a letter detailing the runaround you’ve been given. Send the letter by overnight mail to the company’s corporate headquarters, and be sure to copy the Office of the Comptroller of the Currency (OCC) and the Treasury Department.

Q: I own 5 acres (about half of which is usable) and am thinking about buying a one-acre lot adjacent to my property. Is this a good investment?

The developer has had two houses he built taken back by his lender because he couldn’t sell them. Now he owns five lots in our community and wants $65,000 for the one-acre lot next to ours. The county tax assessor has the vacant land assessed at $45,000. We paid less than that when we bought our lot.

We may use the land eventually, but what do you think the chances are of making a profit if we decide instead to sell it in the future? I would love your input.

A: If you paid less for your land than what the developer is now trying to get for a lot that is far smaller than yours, you might find that the purchase isn’t such a great investment.

Is the lot worth twice what you paid for yours for half the usable space? You know that, in the current real estate downturn, homes in your community are not selling and that the developer’s lender has taken back homes. Given what has generally occurred in the market, I doubt the land has appreciated that much in the past couple of years. It may even be worth a lot less than what you originally paid for it.

If you love your home and feel that adding more land to your property enhances its value, you might buy it for that purpose. But you already have 5 acres of land, and adding one more acre may not add too much value.

Regardless, you won’t make any money on this lot until the real estate market improves and homes in your community are selling.

The real estate agent who helped you buy your property might be able to tell you what other properties are selling for in the area and give you a better idea as to the value of the lot you want to buy.

It all boils down to the numbers. You have to work out on paper exactly what it will cost you to buy this land (including the opportunity cost of not investing the money elsewhere). You also need to figure out what you think the land will be worth some years into the future. If you live in an area where land is plentiful, investing in the land may not be worthwhile.

(Ilyce R. Glink’s latest eBooks are “Save Your House From Foreclosure” and “Divorce and Your Finances,” which can be purchased at www.thinkglink.com. If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST or contact her through her Web site, www.thinkglink.com.)