Archive for the 'Avoid Foreclosure' Category

The economies of Pasco, Richland and Kennewick in Washington were able to survive the worst of the national recession. But because the impact of unemployment is so widespread, many homeowners found themselves struggling to pay their mortgage payments and in danger of house repos.

The federal loan modification under the Making Home Affordable program of the Obama Administration has helped many homeowners in the Tri-City remain in their distressed properties.

Loan modifications involve changing the length or terms of the troubled mortgage to make monthly payments affordable and easy on the pocket of financially-strapped homeowners. The program introduced by the Obama Administration is designed to help as many as 9 million distressed homeowners modify or refinance their loans to affordable terms.

Nationwide, the program has already modified about 230,000 troubled loans. The federal government said that the modification initiative is on the track to help about 3 to 4 million borrowers in three years time.

Consumer Credit Counseling Service housing program director Liza Beam said that the modification program has helped many distressed homeowners remain in their properties. But she pointed out that despite the willingness of lenders to help homeowners, they are behind on their loan modification efforts. She added that the process for loan modification typically takes as long as six months.

Since October, the CCCS was able to help 70 homeowners who have trouble with their loan payments. The CCCS is certified by the U.S. Housing and Urban Development (HUD) to provide loan counseling services.

According to industry experts, many mortgage companies are now lenient when it comes to modifying troubled loans. Previously, homeowners should be 3 months or more delayed on their mortgage payments before mortgage companies would start making changes.

Some mortgage companies offer various forms of modifications. Homeowners can opt for forbearance which would allow lenders to divide the total missed payments to be paid incrementally on top of regular payments. Some lenders also modify troubled loans by reducing interest rates or extending the length of the mortgage loan.

Another way to reduce monthly payments is to file for partial claim. This method involves mortgage companies allowing homeowners to pay a portion of the principal and interest, deferring the remaining due amount until such time that the distressed property is sold.

Struggling families in Colorado who are facing foreclosures and trying to deal with the impact of recession have found some help that could alleviate their miserable condition.

First off is the Help for Working Families Fair where distressed homeowners received advice on repo home prevention, finances, unemployment benefits, housing, home weatherization, utility assistance and health care.

The advice is given out for free to distressed homeowners by representatives of about 25 nonprofit organizations.

Another development that gave hope to homeowners who want to avoid repo home and are trying to survive the recession is Governor Bill Ritter’s signing of several bills into law.

One bill, the House Bill 1276 offers distressed homeowners who are facing foreclosure with a 90-day moratorium to work out solutions to make their account current. The bill, sponsored by Senator Morgan Carroll and Representative Mark Ferrandino, allows homeowners to communicate with foreclosure counselors under the Colorado Foreclosure Hotline program.

Under the bill, homeowners who are eligible for the repo home prevention program will have the opportunity to negotiate with their lenders to work out ways that would help them remain in their homes and avoid foreclosure.

The Colorado Foreclosure Hotline was one of the participants in the Help Fair. The agency helps troubled homeowners who have missed a payment or two or are on the brink of foreclosure. It warns homeowners against missing monthly mortgage payments and fraudulent lending practices.

Colorado Housing Assistance Corp. (CHAC), another fair participant, offers mortgage loan programs, free classes to educate novice homebuyers and borrowers and supportive financial counseling.

CHAC program coordinator Charlotte O’Donnell said that the Help Fair’s intention was well intended. However, she noticed that the event was a little challenging because it was organized at the last moment and therefore, it lacked the marketing needed for the event to reach to all concerned homeowners.

Additionally, ODonnell thinks that it was a mistake to hold the event at the Capitol because the place was not accessible to all those who want to join.

Meanwhile, Ritter also signed into law the House Bill 1310 which classified workers as either contractors or employees to make sure that working families would not be deprived of benefits such as unemployment insurance protection.

All the bills signed by Ritter are aimed at helping homeowners avoid repo home and survive the economic crisis.

A day after US President Barack Obama unveiled his foreclosure prevention initiative, Department of Housing and Urban Development (HUD) Secretary Shaun Donavan urged banks and other financial services institutions to take aggressive steps to ensure the success of the $75 billion program.

The foreclosure abatement initiative includes refinancing arrangements that will provide a chance to almost 9 million borrowers to reduce their mortgage payments.

The initiative will greatly help homeowners who are on the threshold of foreclosures, those making payments but are struggling to do so regularly and those who are at risk of defaulting.

In addition, the Treasury Department has pledged another $200 billion to help home mortgage providers Federal National Mortgage Association and Federal Home Loan Mortgage Corp. maintain low mortgage rates.

Furthermore, the foreclosure prevention initiative also includes incentives of $1,500 for distressed homeowners and $500 for lenders provided that loans have been modified before they defaulted.
The incentives are designed to encourage lenders to offer home refinancing to homeowners whose mortgages surpassed the fair market value of their properties.

Donovan, during an interview on the NBC program “Today Show”, said that the foreclosure problem started as a crisis in the mortgage market and spread to become an employment crisis.
He pointed out that the Obama Administration is certain that there are enough requirements to ensure and sustain heavy bank refinancing. This, he added, could mean a great deal to help owners of distressed properties.

He explained that those eligible for mortgage refinancing are homeowners who have good credit. He admitted that there are homeowners of distressed properties who would not benefit from the foreclosure prevention initiative, citing in particular investors owners who purchased homes they never occupied.

Meanwhile, Federal Deposit Insurance Co. Chairman Sheila Bair said that the foreclosure prevention initiative will have a significant impact on the Obama Administration’s effort to curb the number of repossessed homes.

In an interview on the ABC television show “Good Morning America”, Bair empathized with homeowners who are good mortgage payers who feel that they are being left out from the initiative and that the Obama Administration is instead rewarding distressed homeowners for their risky behavior.

She pointed out that what is important right now is to put a stop on foreclosures and halt falling home prices which could all lead the way to stabilizing the housing market.

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According to Associated Press, 9.5 million homes spend more than 38 percent of their untaxed income on paying up their mortgage to dodge repossession. This value imposed the new threshold to qualify for a loan assistance program by Fannie Mae and Freddie Mac.