The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac.A Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan to-value ratios above 80%.A Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.

GSE lenders and servicers already have much of the borrowers information on file, so documentation requirements are not likely to be burdensome. In addition, in some cases an appraisal will not be necessary.A This flexibility will make the refinance quicker and less costly for both borrowers and lenders.A The Home Affordable Refinance program ends in June 2010.

The Home Affordable Modification program will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments.A Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the Treasury Department today announced program guidelines that are expected to become standard industry practice in pursuing affordable and sustainable mortgage modifications.A This program will work in tandem with an expanded and improved Hope for Homeowners program.

With the information now available, servicers can begin immediately to modify eligible mortgages under the Modification program so that at-risk borrowers can better afford their payments.A The detailed guidelines (separate document) provide information on the following:

Eligibility and Verification

• Loans originated on or before January 1, 2009.
• First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits allowed for owner-occupied properties with 2-4 units.
• All borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs, and most recent tax return, and must sign an affidavit of financial hardship.
• Property owner occupancy status will be verified through borrower credit report and other
  documentation; no investor-owned, vacant, or condemned properties.
• Incentives to lenders and servicers to modify at risk borrowers whohave not yet missed payments when the servicer determines that theborrower is at imminent risk of default.
• Modifications can start from now until December 31, 2012; loans can be modified only once under the program.

Loan Modification Terms and Procedures

• Participating servicers are required to service all eligible loans under the rules of the program unless explicitly prohibited by contract; servicers are required to use reasonable efforts to obtain waivers of limits on participation.
• Participating loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent.A The NPV test will compare the net present value of cash flows with modification and without modification.A If the test is positive meaning that the net present value of expected cash flow is greater in the modification scenario the servicer must modify absent fraud or a contract prohibition.
• Parameters of the NPV test are spelled out in the guidelines, including acceptable discount rates, property valuation methodologies, home price appreciation assumptions, foreclosure costs and timelines, and borrower cure and re-default rate assumptions.
• Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income (DTI).
• The modification sequence requires first reducing the interest rate (subject to a rate floor of 2%), then if necessary extending the term or amortization of the loan up to a maximum of 40 years, and then if necessary forbearing principal.A Principal forgiveness or a Hope for Homeowners refinancing are acceptable alternatives.
• The monthly payment includes principal, interest, taxes, insurance, flood insurance, homeowners association and/or condominium fees.A Monthly income includes wages, salary, overtime, fees, commissions, tips, social security, pensions, and all other income.
• Servicers must enter into the program agreements with Treasury’s financial agent on or before December 31, 2009.

Payments to Servicers, Lenders, and Responsible Borrowers

• The program will share with the lender/investor the cost of reductions in monthly payments from 38% DTI to 31% DTI.
• Servicers that modify loans according to the guidelines will receive an up-front fee of $1,000 for each modification, plus pay for success fees on still-performing loans of $1,000 per year.
• Homeowners who make their payments on time are eligible for up to $1,000 of principal reduction payments each year for up to five years.
• The program will provide one-time bonus incentive payments of $1,500 to lender/investors and $500 to servicers for modifications made while a borrower is still current on mortgage payments.
• The program will include incentives for extinguishing second liens on loans modified under this program.
• No payments will be made under the program to the lender/investor, servicer, or borrower unless and until the servicer has first entered into the program agreements with Treasurys financial agent.
• Similar incentives will be paid for Hope for Homeowner refinances.

Transparency and Accountability

• Measures to prevent and detect fraud, such as documentation and audit requirements, will be central to the program.
• Servicers will be required to collect, maintain and transmit records for verification and
  compliance review, including borrower eligibility, underwriting, incentive payments, property verification, and other documentation.
• Freddie Mac will audit compliance.

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There were only 14,351 foreclosures in the state of January in California, as opposed to 20,952 foreclosures the month before. This number of foreclosures was the highest of any state in the entire country, but not the most per capital.

Nationwide, foreclosures are down by more than a quarter between the last two months. Despite these numbers, however, this may not be due only to a moderate recovery in the economy, as Fannie Mae and Freddie Mac both have a moratorium on foreclosures (and they own fifty percent of the United State’s mortgages), which has a big effect, completely separate from the strength of the market.

Furthermore, some commercial banks have agreed to do this as well.

Many banks are allowing consumers to change the terms of their mortgages, which can seriously hurt the banks’ balance sheets, and pumps up these numbers in an artificial way. This process is called Loss Mitigation.

Finally, the California senate has implemented a law recently, which may have had a large effect, that requires any lender to contact a homeowner before they are permitted to begin any type of foreclosure proceedings.

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Companies are protecting themselves by selling you a cheaper upfront service, for your long-term business. In practicality this sort of commitment is a fair practice. But at what point to you does it overstep the lines of fair business? After all, free market capitalism is what we have long built our economy on.

Bankers everywhere are using contracts to keep you held down from searching for the most competitive price. They use penalties or a break funding penalty to keep people from breaking off their current agreement or mortgage. This can mean a very large sum of money by you the borrower.

Some banks are different but the typical bank wants three to six months of interest on a one to two year fixed rate loan. This means that a thirty year loan will be costing you additional interest payments just to break your agreement.

That is a lot of cash!

At what point does this simple practice teeter the unfair business practices?

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The problem is confirmed by many other sources, including many of the banks falling victim.

Calgarians and Albertans are having an especially bad time of it. Calgary alone, a very small area, has more than 125 homes that are in the foreclosure process right now. It appears that much of the market is under water, and that everybody is falling victim.

In the past, few people who lost their job or had a drug or alcohol problem were foreclosed upon, many banks are finding that they must foreclose upon everybody. Many Realtors are finding that as much as fifteen percent of their business is now in helping banks to sell all of those homes that they find on their hands.

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Home foreclosure filings are up 53% in June. This is the second straight month more than 250,000 homes have foreclosed. This is according to the latest report from RealtyTrac.

First of all, what is going on with the Fannie Mae and Freddie Mac news. how will that affect the housing market? It could be huge. The real debate is held in the reforms will be and still have enough capital to do with a need to do to affect relief on the markets. If Fannie Mae and Freddie Mac do not have the capital they need, foreclosures will go up. They are already up an enormous 53%, but down 3% from May 2008.

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A foreclosures is a legal proceeding that occurs when a homeowner (mortgagor) fails to make the agreed upon mortgage payments and the holder of said mortgage (mortgagee), typically a bank, evicts the homeowner, seizes that property and sells it to another individual.

In the event a homeowner fails to pay on their mortgage, a foreclosure is the primary remedy utilized by most mortgage lenders, in most states, to collect on the debt owed to them. The house is the main collateral or asset the bank has when they issue a mortgage to an individual.

The foreclosure process starts when a homeowner falls behind 90 days on their mortgage payments (this is most typical). At that point a lender may file what is know as a Notice of Default and an Election to Sell (again, most typical).

At this point, the lender typically waits about 90 more days where it appears nothing more happens from the lender other than possibly receiving phone calls requesting that the homeowners gets caught up on their mortgage. Behind the scenes, the lender is preparing their team to initiate the actual reclaiming of the asset.

After what is a total of about 180 days of being late on the mortgage payment, the lender has the right to publish what is know as a Notice of Sale. Most states require the lender publish the tentative sale for abouts 3 weeks. When the lender publishes that Notice of Sale, it is typically in a newspaper and they have to declare when the property will goto sale on the courthouse steps or some other predetermined location.

A homeowner does carry the ability to cure the mortgage loan and keep their house, this is called the Right of Reinstatement (most state laws offer this). This means that if the homeowner can pay back all delinquent mortgage payments plus additional fees and penalties up until a predetermined time, usually 7 days before the Notice of Trustee Sale, the lender will allow them to keep their home.

The homeowner does not have to pay back the whole loan, they do not have to refinance, they simply have to pay the mortgage payments that were missed, fees and penalties.

If the homeowner is unable to execute their Right of Reinstatement or if the lender does not postpone the sale, the property will goto the Trustee Sale.

Once the Trustee Sale occurs, the property is lost.

You can retain the services of a trusted professional, who understand your rights and entitlements by clicking here.

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Loss Mitigation helps foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure.

Our extensive experience and solid working relationships with mortgage lenders allows us help homeowners avoid the common pitfalls that many encounter while trying to work things out directly with their lender.

After performing a thorough assessment of homeowners personal finances and analyzing lender’s loss mitigation policies our professional loss mitigators will negotiate with lender to get homeowner the best possible solution to home foreclosure problem.

We help homeowners save their home and credit history through a variety of loss mitigation options stop your foreclosure now.

Stop Foreclosure <=click here

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• The Foreclosure Prevention Industry NEEDS Your Help!