Angela Pernisco

While listening to Obama's inaugural speech this morning I was struck once again by his perspective that our country is not going to turn around simply because there is a new President in office. His focus is, and always has been, teamwork. We as a nation need to work together to create change. President Obama is going to do his part to create avenues for us to prosper but it is up to us to use those avenues for the greater good.

What has made the United States a country that people desire to become a part of, to the extent that they leave their own countries to create a new life here, is the hope of the American Dream. Many of us who have lived in this country our entire lives have forgotten what that is. According to Wikipedia the definition of the American Dream is:

"The freedom that allows all citizens of the United States to pursue their goals in life through hard work and free choice."

Obama is challenging each and every one of us to support this dream. The question I asked myself this morning is how I can participate in supporting the American Dream. What can I change about my daily routine to contribute to the bettering of our country?

For me, the answer was clear. I can't think of anyone working harder to pursue the American Dream than the local "mom and pop" shops scattered throughout our country. They range from coffee shops to drycleaners to butchers to builders. If we all made a personal decision to support our local businesses our countries success would grow exponentially. Our job market is overcrowded and the unemployment rate is high; much of this could be remedied by supporting those around us who are working hard to create their own American Dream.

This is not always easy as it forces us to drive farther out of our way, pay a little more and get out of our cars rather than using the drive through. However, I have challenged myself and challenge you also: choose to support your local neighbors whenever the opportunity arises and watch how our country grows!

We have heard it over and over; "change is not going to happen overnight, it takes time". Logically this is a very accurate statement. However, for the millions of Americans who are hanging on by their fingernails and need immediate change this is not an encouraging statement. There is hope however.

I have written before about HOPE for Homeowners; a program created by Congress to assist homeowners at risk of foreclosure. This program may not be for everyone, however. One of the drawbacks of this program is that you split your equity with the federal government when you sell. For example, if you sell your home within 5 years the government will receive 90% of the equity on your home. In year 5 the government receives 60% of the equity and any time after 5 years the equity is split 50/50%. When I see this I think of those who plan to stay in their homes for many years to come and may ultimately have a great deal of equity when the time comes to sell. Good news, there is another option.

Today I am going to discuss "loan modification". This is an agreement made between you and your lender modifying the terms of your existing mortgage. With the new generation of financing we have seen variable rates, low money down and negatively amortized loans (your principal grows as you are paying less than the interest on the loan). While these loans worked well to initially get a person into a home they are dangerous in the long run. Loan modification is simply that: modifying the existing terms on your loan.

The loan modification process is not easy and many may need the help of an attorney to navigate these complicated waters, however, here are the basics:

•1. You must be able to show your lender that it is in their best interest to grant you the modification. Simply stating that you want a lower interest rate is not going to cut it (this is called a refinance). The lender will need evidence of your financial struggle to pay your current mortgage at is present terms. Keep in mind, if your present situation is so dire that you cannot afford new "reasonable" terms they will not consider a modification.

•2. Do your research and have a plan. Remember that the Loss Mitigation department of your loan servicer is well trained to reduce losses to the company and are going to get as much out of you as possible. Be prepared with your income and expenses. Collect your W-2's, gather your past 3 years of taxes and at least 6 months of bank statements to support your income. Pull together your bills to show your expenses. It is also important to document why you have fallen behind (receipts for unexpected expenses, letter from employer showing hour cutbacks, etc.).

•3. Know who to talk to. There are two departments who you will likely come into contact with, they are Collections and Loss Mitigation. It is important to know this so that you do not waste too much time talking to the wrong department.

•4. Be prepared. Oh, did I already say that in #2? This is the most important aspect of the process. If the evidence that you show the lender indicates that you cannot afford the home with new "reasonable" terms then they will not spend the time to modify your loan and simply allow it to go into foreclosure. However, if the information that you provide shows that you have an excess of income they will feel that you should be able to make your payments and not modify the loan. It is crucial that your numbers fall in line with what your goals are of the modification.

•5. Paperwork, paperwork, paperwork... The remainder of the process is paperwork similar to what you would complete in order to obtain the loan, however, in reverse. Now you are proving that you are financially incapable of making the payments.

There you have it, another option to help you hang on a little longer in these rough economic times. This is certainly a simplified version of a very complicated process that could last 60-90 days. In fact, for many it may be worthwhile to hire an attorney to assist you through the process but it is possible to do it on your own!

I have to admit, I understand how some mortgage brokers could have become caught up in providing creative financing to many innocent buyers with no money and little ability to make monthly mortgage payments. After all, I suspect that many lenders trusted the fact that these buyers understood that they would be paying more on their mortgage payment than their current rent payment. I am certainly not justifying the lenders that are now being called "predatory lenders" I am simply stating that I can see how it can happen.

What I don't understand is the new generation of so-called predators under the guise of a "loan-modification" company. These are companies that ask for money up front to negotiate with banks. The problem with these companies is they cannot guarantee their promises of reducing the interest rate or saving foreclosure and many if not all do not refund the upfront money. There is no doubt that these companies work hard in their attempts, and there are definitely ways to modify your loan, however, if you are financially strapped you should not have to pay someone to do it. The best way to modify your loan is directly through your bank. There are also some wonderful non-profit organizations that can help you as well. You can find a non-profit counselor to assist you at the FHA website: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

Are you ready to sell your home but worried about the kids rooms? You are not alone. One of the largest stressors in selling your home is having it ready to show and if you are family with children the idea can seem daunting. Rather than fighting against the nature, or should I say natural disaster, of your child sign them up for the Equity Group Clean Kids Award. This is a monthly award that I offer to your child for keeping their rooms clean. They will receive a certificate and gift for each month that they have helped during the sale of your home!

As a realtor, we not only assist people into new homes, we also care for our communities. One of the many ways that we achieve this is through the Equity Group Foundation. This is a charitable foundation where agents and staff contribute time and resources to help local organizations dedicated to meeting the needs of our neighbors.

Local charities, especially those that are smaller without national or federal funding, are assisted through this organization both physically and financially to assist with specific causes. In the last six years The Equity Group Foundation has invested more than $516,000 back to our communities.

Some of the most recent grants offered are:

•· Bradley Angle House - to assist woman and children suffering from domestic violence

•· Calvin Ranney & Craig - to assist families with seriously ill or disabled children

•· Royal Family Kids Camp - a camp offered to foster children providing them with memorable summer experiences

•· Human Solutions - an organization offering temporary housing for individuals and families who are transitioning into permanent housing

•· KEX Kids Fund - a program to provide hearing and vision care to families who could not otherwise afford it

•· Dinner & A Movie - provide a month of Tuesday night meals to homeless and impoverished youth

If you are interested in contributing the great work that the Equity Group Foundation has to offer or are simply interested in learning more about it you can visit the web site at: www.equitygroupfoundation.org