05 Jan 09 Rates Drop and More Lenders Offer Mortgage Relief
Mortgage interest rates have dropped dramatically ever since the Federal Reserve unveiled a plan last month to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae and Freddie Mac. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The Fed cutting rates benefits home refinancing and mortgage relief and foreclosure prevention alternatives.
Direct Mail Marketing Company, Kelly Media Group president, Jason Cardiff said in a statement yesterday, “Conversion rates for mail pieces targeting troubled homeowners with loan modification offers have received phenomenal double digit numbers.” Cardiff continued, “We have not seen mail to call ratios in the mortgage business since the 125 second mortgage boom in the late 90’s.” We are seeing positive results for mortgage brokers, law firms and loan modification companies. banks need to trust restored as well and the only motivating reason for consumers to start borrowing again will be low mortgage rates.”
Federal Reserve Leaves Interest Rates Unchanged
Fed Maintains Rate at Range of 0-0.25%.
Can borrowers with bad credit refinance into an affordable payment or will they lose their home to foreclosure? In a recent report, Freddie Mac chief economist Frank Nothaft said, “Interest rates for thirty-year home loans with fixed rates declined for the tenth straight week.” Mortgage rates dropped to 5% but how many distressed homeowner will actually qualify for a refinance loan with these 5% rates?
Former Ditech executive, Jeff Morris said, “Loan modifications give these rejected homeowners a new opportunity to negotiate a lower mortgage rate and in many cases the interest rate the lender agrees to is less or equal to the prime rate that mortgage lenders are offering “A” paper borrowers with 740+ fico’s with equity and full documentation.” Morris continued, “What it means in laymen terms I that struggling borrowers that can’t qualify for a refinance loan, still qualify for a loan workout that actually has a lower interest rate.”
Tags: bad credit refinance, direct mail marketing company, loan modification companies, loan workout, Mortgage interest rates
01 Dec 08 FDIC Mortgage Loan Modification Versus Legal Loan Relief Program
The FDIC Loan Modification Program targets homeowners who are presently having financial difficulty with their 1st and 2nd mortgage loan payments, but have the ability and willingness to make a mortgage payment. The FDIC uses a streamlined approach to identify loan modification candidates and to provide a customized modification offer when the modification minimizes loss. If a borrower does not qualify for streamlined mortgage loan modifications, an individual loan review may result in a personalized modification that still maximizes value like the FHA loan program, Hope for Homeowners. Private loan modification companies, like Legal Loan Relief, offer mortgage restructuring options for homeowners who have debt to income ratios between 38% and 100%.
Watch the Fox Video regarding the FDIC Loan Modification Plan
This mortgage relief approach is one of several loss and mitigation strategies that a mortgage service companies should consider when dealing with a distressed borrowers. Mortgage refinancing is should always be the homeowner’s first option, but many people simply do not qualify for a FHA home refinance loan whether it’s a government or a traditional rate and term mortgage. However, many borrowers are unable to refinance their loans in the current economic environment and repayment plans typically do not provide.
Many California homeowners are not aware of the State’s position on foreclosures. The Golden State’s Governor continues to promote a Foreclosure Moratorium for California. Whether you are upside down with a mortgage balance greater than your home value or simply need a payment that is more affordable, consider a loan modification as one of the recommended foreclosure prevention methods.
Once the homeowner’s loan modification is determined, the mortgage lenders’ service company must perform a property valuation test between the cost of a loan modification and the estimated cost of foreclosure to provide modification results in a reduced cost solution to the investor. By providing an automated valuation method that compares the cost of the modification and the estimated cost of foreclosure, the service company fulfills the terms of most home loan servicing agreements.
