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

www.youtube.com/watch?v=QalirnmYkZg

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.”

www.youtube.com/watch?v=4nPJ4Ue-UwA

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.