Ben Maddy

AVOID FORECLOSURE WASHINGTON

As the mortgage crisis spreads, hitting new heights every month, borrowers with good credit now make up the largest share of foreclosures. With job losses and pay cuts simultaneously on the rise, a record 12 percent of homeowners were behind on their payments in the first quarter of 2009; a trend in which is predicted to continue well into the coming years. In the exploding housing crisis, millions of borrowers across Washington are now struggling to get a loan modification in hopes to avoid foreclosure.

Much of the blame for the current recession can be placed upon risky adjustable-rate loans made to borrowers with bad credit to begin with. Nearly half of all sub-prime ARMs today are past due or in foreclosure, with no end in sight for homeowners misled into inappropriate or unscrupulous loans. [Seattle Times, 5/28/2009]

Experts believe this trend will continue to spread throughout the country as unemployment mounts and borrowers with good credit face skyrocketing foreclosures. The number of borrowers now receiving unemployment benefits reached the highest on record this last May at 6.78 million, and this number continues to rise. Economists are saying this number could reach double digits, and will coincidentally add to the ailing economy and housing market.

In over half of the largest U.S. cities, home prices are due to fall through the first quarter of 2011 while unemployment and foreclosures rise. According to recent reports, 30 out of the 50 biggest metropolitan areas will have a 75% likelihood of house values falling through March 31, 2011, while Washington has shown a 92 percent chance of lower housing prices. Affordability is no longer the driving issue in the housing market, as home values continue to fall, all while a growing number of homeowners struggle to avoid foreclosure. While unemployment and foreclosures rise steadily, the value of houses continue to fall across America, leaving millions of homeowners at greater risk of losing their homes. [Forbes, 5/28/2009]

With unrelenting unemployment rise, borrowers with good credit now unable to make their payments due to job loss, and other hardships, continue to escalate the number of foreclosures around the country. Thankfully, more and more borrowers with good credit and looking to avoid foreclosure now qualify for a number of programs and options allowing them to save their home. Included in recent changes to the president's program, borrowers are now allowed to use unemployment benefits as a source of income for a Loan Modification.

The majority of Washington homeowners now qualify for hundreds of dollars in monthly savings with a loan modification thanks to President Obama's "Making Home Affordable" plan. Thanks to the HAMP program, a homeowner’s mortgage payment cannot exceed 31% of their gross income, and because most home loans exceed 31%, the majority of borrowers are eligible for assistance.

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FORECLOSURES AND FALLING HOUSE PRICES, WASHINGTON

Foreclosures are continuing to rise across Washington with no end in sight, and according to Barclays Capital, U.S. foreclosures will peak in the second half of 2010 with home prices continuing to decline through the end of that year. According to S&P/Case-Shiller, U.S. home prices have dropped 33 percent since July 2006. Amidst a growing number of discounted foreclosures, homeowners attempting to sell their homes are finding themselves trapped in a losing situation. If the current trend continues, 2009 will become the lowest year for new-home sales since the Census Bureau began taking records in 1963.

According to Michelle Meyer, an economist at Barclays Capital in New York, "Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession." Based on the S&P/Case-Shiller home price index of 20 U.S. cities, the prices of homes may drop another 7 percent, leaving thousands of Washington homeowners "underwater," owing more than their homes are worth on the market. Nearly 22 percent of all mortgage holders in America were underwater in March 2009, while around 15 million homeowners currently owe more than the value of their homes. [Bloomberg, 7/02/2009]

As a result of the mounting threat of foreclosure faced by homeowners, the government has announced an adjustment to the Making Home Affordable program. Unfortunately for the majority of homeowners looking to refinance their mortgages, the plummeting value of homes has made new government programs unavailable to them. Refinancing activity is already in decline due to the rising interest rates. At the current moment, homeowners owing 5% more than the value of their homes can refinance mortgages through Fannie Mae and Freddie Mac. According to USA Today, Housing Secretary Shaun Donovan said on July 1 that the program is being expanded to allow homeowners who owe 25% more than their homes are worth on the market get refinancing help through the federal agencies. [USA Today, 7/02/2009]

As interest rates are presumed to skyrocket, refinancing no longer makes financial sense for a growing number of homeowners looking to find a lower fixed-rate mortgage. According to Freddie Mac, the average rate on a 30-year fixed loan has increased from 4.82% on May 21 to 5.42% as of June 25. Unable to secure a lower interest rate, and while their home value falls, homeowners are left with only one option: loan modification.

Without new fixed rates lower than 5%, at the current rate refinancing does not make sense without modifying the loan itself. As the interest rates continue to rise, refinancing activity is quickly diminishing with the realization that loan modification is the only cure.

Most of Washington's troubled homeowners now qualify for hundreds of dollars in monthly savings with a loan modification under the Obama administration’s “Making Home Affordable” plan. Thanks to the HAMP program, a homeowner’s mortgage payment cannot exceed 31% of their gross income, and because most home loans exceed 31%, the majority of borrowers are eligible for assistance.

Every homeowner now facing foreclosure, or about to be, should immediately begin exploring all the options available to them, including the new government programs designed to help you get a successful loan modify.

LOAN MODIFICATION HELP, WASHINGTON

Loan modification is now the greatest hope for distressed Washington homeowners, as refinancing seem no longer beneficial. With an increasing amount of borrowers now "underwater," owing more than their home is worth in the competitive market of foreclosed homes, refinancing and other options once available to customers are no longer a financial benefit for most.

With foreclosures through the roof, housing prices crashing, and interest rates rising, any homeowner that is currently late on their monthly house payments, or about to be late, now must decide between saving and losing their home. Those faced with foreclosure and the loss of their home are left with fewer and fewer options, making the awareness of their legal rights more essential than ever before. Not to mention, with all of the mortgage loan companies out there, a growing number of distressed homeowners seeking reliable help often become victim to fraudulant and predatory outfits.

Neighborhoods across Washington will never be the same due to the expanding wave of foreclosures. Millions of homeowners facing the loss of their home are now unable to afford their payments due to rising interest rates, home value deflation, loss of income, and other hardships, and are now trying to get a home loan modification. Homeowners who had kept up with their loan payments for years are now suddenly unable to afford their mortgage payments, while newly-created suburbs built up around America before the recent collapse of the housing market have provided an additional surplus of foreclosures.

Recently, the Obama administration announced an adjustment to their Making Home Affordable program. Since its start, the new government programs have been unavailable for the majority of homeowners trying to refinance due to the failing housing market and plummeting value of homes. As time is running out for more and more homeowners, it has become crucial for many to contact a mortgage servicer as soon as possible in order to determine whether they can modify their home loan.

Due to foreclosures and a falling housing market, higher interest rates are assured to follow course, making refinancing a fixed-mortgage far more difficult and much less beneficial. As a result of the rising interest rates demanded by banks looking to make up losses from defaulted loans, and with the number of foreclosures symbiotically escalating, refinancing has declined. As options are becoming scarcer and less beneficial, loan modification may very well be the help distressed homeowners are looking for.

With a loan modification, Washington homeowners are able to refinance the debt and/or extend the term of your original mortgage loan, making the monthly payments affordable and build any missed payments into a new 30 year loan. With help from new government regulations, modifying your mortgage loan is easier and more beneficial than ever before. Loan modification makes it affordable for you to make your monthly payments, and also allows you to catch up on your missed payments.

Though not every single loan is fixable and some homeowners are still being denied, under new modified regulations, lenders must now accept applications from every homeowner seeking loan modification help. Even those borrowers who have been denied a loan modification in the past will now be able to reapply for a loan modification. About 37,000 loans were modified by Fannie Mae and Freddie Mac in the first quarter of 2009 alone, 57 percent higher than the fourth quarter of the previous year. Assuring an affordable payment for most homeowners, the new regulations do demand that all modified loans must not exceed 31 percent of the borrower's monthly gross income.

Washington homeowners can save hundreds a month by getting a home loan modification or mortgage refinance under President Obama's "Making Home Affordable" plan. Every homeowner now facing foreclosure, or about to be, should immediately begin exploring all the options available to them, including the new government programs designed to help you get a successful loan modify.

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LOAN MODIFICATION ELIGIBILITY

For those in dire straits in the troubled economic times the threat of losing one's home is growing by the day, and for many others it is already too late. Whether trapped in high interest rate mortgages, with an adjustable rate about to skyrocket, or accumulating defaults and possibly doomed to foreclosure, the only thing to save the home of most Washington borrowers is a Loan Modification.

Being aware of your loan modification eligibility is crucial due to the Obama administration's anti-foreclosure program and "Making Home Affordable" plan. Millions of borrowers who are current but having difficulty making their payments, and borrowers who have already missed one or more payments, may be eligible. Homeowners that can no longer afford to make their monthly loan payments may now qualify for a loan modification in order to make their monthly mortgage payment affordable.

If the following guidelines reflect your situation, then you may qualify for savings:

1. Your home is your primary residence.
2. The amount you owe on your first mortgage is equal to or less than $729,750.
3. You are having trouble paying your mortgage, perhaps due to an increase in your mortgage payment or a reduction in your income or a hardship (like medical bills) that has increased your expenses.
4. You received your current mortgage before January 1, 2009.
5. Your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31% of your current gross income.

While not every loan is fixable and a number of homeowners are getting denied, within the new Obama guidelines lenders must now accept applications from all inquiring homeowners, including any homeowner who was previously denied a loan modification. According to the Federal Housing Finance Agency's (FHFA) most recent Foreclosure Prevention Report, Fannie Mae and Freddie Mac modified about 37,000 loans during the first quarter of 2009, a 57% increase over the fourth quarter of 2008.

Under these new regulations, all modified mortgages now must have payments reduced to no more than 31% of the homeowner's gross income. Debt-to-income ratio, or DTI, is now being scrutinized by lenders as an essential qualification in order to determine loan modification eligibility for homeowners and other debt relief. A homeowner's DTI ratio now determines what their house payment will be, assuring them an affordable house payment.

In a shared effort to reduce monthly payments, President Obama's foreclosure prevention plan demands the PITIA (principle, interest, taxes, insurance, and association fees) on a loan modification cannot exceed 31 percent of the household's monthly gross income, based on front-end DTI ratio (house payment only. Since most borrower's loans exceed 31%, the majority of Washington homeowners are now eligible for assistance under new government programs.

According to President Barack Obama, "Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure." [White House, 2/18/2009]

By calculating their DTI ratio, homeowner's now have a way of finding out if they qualify for a more affordable monthly house payment. In addition to this assistance, the federal government now guarantees to cover part of the losses if the homeowners re-default. As a result, homeowners in default or in danger of default are now encouraged to explore their options with a well-established and qualified servicer.

As suggested by Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corp., "the government set out a standardized loan modification package for loan servicers to follow, enabling them to do workouts faster. In return for their picking up the pace, the government would guarantee some or all of the newly modified loans." [WA Post, 10/26/2008]

President Obama's "Making Home Affordable" plan has now qualified the majority of Washington homeowners for hundreds in monthly savings with a home loan modification or mortgage refinance. Homeowner now facing foreclosure, or about to be, should immediately begin exploring all the options available to them, including the new government programs designed to help you get a successful loan modify.

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OBAMA PLAN HELPS WASHINGTON

The recent anti-foreclosure bill passed by Congress, aimed at helping millions of struggling borrowers keep their homes, allows for qualified homeowners to swap out a high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration. Under the new Obama plan for homeowners, banks are encouraged to spare borrowers from foreclosure and cracks down on predatory lenders who take advantage of them. President Barack Obama assured that homeowners, having mortgage loan modifications more accessable, facing foreclosure would have a second chance. [MSNBC, 5/19/2009]

Speaking in the White House's East Room, President Obama stated, "too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try... This bill removes those hurdles, getting folks into sustainable and affordable mortgages and, more importantly, keeping them in their homes." [White House, 5/20/2009]

Obama's plan allows for mortgage loan servicers to provide borrowers' their most advantageous option, whether a home loan modification, forgive defaults, refinance to swap a high-interest rate for an affordable and fixed loan backed by the Federal Housing Administration, or other options. Thousands of Washington homeowners are now able to securely prevent foreclosure and save their homes.

Under the HAMP program, a homeowner’s mortgage payment cannot exceed 31% of their gross income, and since most home loans exceed 31%, the majority of borrowers are eligible for assistance. With the help of these new regulations Washington homeowners have a greater chance to avoid foreclosure than was ever possible before.

By filling out a free loan modification evaluation online, Washington homeowners may immediately discover the savings and payments available under the various programs now helping homeowners save their home.

Homeowners now facing foreclosure, and those who are about to be, should immediately begin exploring all the options available to them, including the new government programs designed to help you get a successful loan modification.

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