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 A new loan modification program was just unveiled that may help thousands of homeowners, that are facing foreclosure.  The loan modification program is the latest attempt by the federal government to stabilize the real estate market.  Thr program will not provide direct financial help, but it does provide assistance to those at risk of losing their homes.

The program will benefit borrowers who are at least 3 months behind on their mortgage payments, if they live in the home and have not filed for bankruptcy.

Borrower’s who fit the criteria would be offered a mortgage loan that would bring the payment to no more than 38 percent of their monthly household income.   Loan payments would be adjusted downward through interest rate cuts and longer terms of repayment.  Borrower’s would be allowed up to 40 years to repay the debt versus the traditional 30 year mortgage most of us are familiar with.

Borrower’s who are in danger of foreclosure should immediately contact the lender who services their loan.  The loan modification program was designed to be swift and efficient in stopping foreclosures.  It is expected that 1.6 million Americans will lose their homes this year, and another 1.9 million are projected to lose their homes in 2009.

Efforts by the government to work with borrowers and homeowners and keep them in their homes is good news for neighborhoods and communities.   The program is also good news for lenders and taxpayers as foreclosures typically cost the lender 50 percent of the loan value.  Ouch!

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Home for Sale

While the present ecomonic situation in this country is uncertain, one thing remains unchanged.  Markets will rise.  Markets will fall.  Markets will Recover.  Savvy Investors/Buyers will Profit.

Too much inventory, and too much absurd lending and borrowing, have Americans facing the worst housing market since the great depression.  While this is not new news, the opportunities in this market may be.   

Home buyers with money in the bank, a job and good credit have not been in such a great position in decades.   Price declines and record loan defaults have made bargain hunting for a home a lot more fun.   The McMansion, many believed they could never afford, is now well within their grasp. 

So, what is the truth about getting a great deal in this market?   Are some properties easier to buy than others?    Can you really get a steal from lenders sitting on unsold inventory?   

The answer is YES, but there are big differences in the types of distressed property being offered for sale.

• SHORT SALES:  A short sale is one in which the borrower is behind on their mortgage, but they still own the property.   Usually, the borrower owes more to the lender than they can sell the home for (upside down).  Usually a short seller will ask the bank to consider any offer on the property and “forgive” the outstanding loan balance.   A short sale is good for the home owner because short sales do not reflect as poorly on their credit report.  Short sales are good for the lender because they don’t have another vacant home on their books.
• MAKING A OFFER ON A SHORT SALE HOME:  This is the most difficult type of distressed housing to make an offer on.  Unless you have a lot of patience or an unlimited amount of time to sit and wait for a response to your offer, you may want to seriously avoid properties advertised as Short Sales.  Truefully, very few, if any, offers made on Short Sales ever close.
• REO’s and Foreclosures:  These are bank owned properties and there are plenty to choose from.  These types of listings sell very quickly.  Generally the buyer can be sitting in their new living room in less than 30 days after submitting an offer on a lender owned property.
• MAKING AN OFFER ON A FORECLOSURE OR REO:  Banks are completely detached and unemotional from their home listings.   They know exactly what they need in terms of price, they know the local market and they love quick closings.  That being said, you won’t be successful offering 75, 80 or even 90 percent of the list price.  You will more than likely be out bid, as often the winning bid is over the list price.  Keep in mind that the bank is not like a human home seller, they usually never counter low ball offers, they simply move on to the next offer in the pile.

Thanks as always for visiting InfoTube.net.  We are here to help you sell and buy, so let us know your thoughts.

Hope for Homeowners is a new program, created by congress, to assist homeowners in refinancing their “at risk” loans into more affordable FHA, insured mortgages.

It is estimated that over 400,000 homeowners could avoid foreclosure through participation in the voluntary program, by enrolling before September 30, 2011.

In order to qualify for the special refinancing, the original loan must have been originated on or before January 1, 2008. In addition, the existing mortgage payment must exceed 31 percent of the borrower’s gross monthly income.

FHASecure is another program designed to help homeowners refinance and avoid foreclosure. The program, which went into effect on July 14th, offers borrowers with ARM’s, the option to refinance with an FHA insured mortgage designed to lower the monthly mortgage payment. Under the FHASecure program, lenders can not disqualify borrowers based on loan payment deliquency and the lender may actually offer a second mortgage to make up the difference between the appraised value of the property and the outstanding balance due.

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