By Allen D. Butler, Esq. at www.legalaz.com, 480-921-0626
Loan Modification Efforts Paying off—but beware of Scam artists
Recent news articles have highlighted two trends in the Loan Modification:
1. More lenders are participating in the Making Home Affordable program announced by the Obama administration last March—and, borrowers are in fact getting their loans modified—but progress is still slow!
Nationwide, over 150,000 borrowers have received a modification proposal on their home loans, according to CBS news. Over 14 loan servicers, including the 5 largest have signed up for the program. See a list of servicers at http://makinghomeaffordable.gov/contact_servicer.html.
The Making Home Affordable program offers two options to homeowners:
1. The “Home Affordable Refinance Program” offers homeowners an opportunity to refinance their mortgages with lower rates. There are some limitations however—including a loan to value ration no higher than 110%, and a good payment record. In addition, this program applies only to Freddie Mac or Fannie Mae backed loans Unfortunately many homeowners in Arizona will not qualify for this program because their homes are worth significantly less than what they owe.
3. The Home Affordable Modification Programs offers homeowners a modification of their existing mortgage with their existing lender. The general guideline is that the home owner is eligible for modification if the current mortgage payment on the first mortgage is more than
31% of the homeowner’s gross monthly income.
So if Mr. and Mrs. Smith have a combined monthly income of $4,000 and their monthly mortgage payment is $1,600, they would be eligible to have their mortgage payment reduced to $1,240 a month,--including principal interest, taxes, insurance and Home Owner Association payment.
You can see some Arizona success stories at www.legalaz.com.
2. Arizona Homeowners need to beware of crooks and scam artists who take their money and do nothing.
Recent news articles have noted that Homeowners need to be aware of crooks and scam artists. See the April 6 Press release from the Treasury department at www.legalaz.com (click on “Be careful who you hire”).
Unfortunately, not everyone who contacts you is truly interested in helping you. In the recent past some of our clients have been contacted by companies or individuals who offer to help you modify your loan or save your home from foreclosure. Some of these individuals are legitimate, but some ARE NOT! They will take your money and then DO NOTHING. You will be much further ahead to hire a reputable firm who charges a reasonable fee.
