Loan Modification - Frauds and Follow Ups

Since I wrote about loan modification some time back. (http://consumerzoneblog.blogspot.com/2008/10/loan-modification-reduce-monthly.html)

I was thinking should not banks be making it much easier to do loan modification? Why ? Because they want our interest money. They do not want to foreclose our house. And guess what, just some time back I saw this announcement from some of the biggest US banks.

http://money.cnn.com/2008/10/31/news/companies/jpmorgan_mortgage.ap/index.htm?postversion=2008103114

It says JP Morgan will modify mortgages. They would like to avoid foreclosures of about $70billion worth loans !!

They are going to open couple of counselling centers across the nation and provide most needed to relief to their customers . The most hurt are the customers who had ARM loans, which has adjusted to a very high APR in recent times.

So now that banks are making it easier to do Loan Modification, there is still no limit to scam artist would do to part you with your hard earned money. One simplest thing to keep in mind is, anyone offering help for upfront money are worth keeping away from. Actually better yet, just run away from them.

There is this article that talks about simple steps you may take yourself to apply for loan modification of you bank does not have any direct program.

http://www.zillow.com/blog/mortgage/2008/10/25/the-new-breed-of-scam-artists/

Loan Modification - Reduce Monthly Mortgage Payment

I just came accross this HOPE foundation browsing through some news.

"The Home Ownership Preservation Foundation" (HOPE).

This foundation helps people avoid forclosures. Their website suggests they help for free. And that they are non-profit and provides HUD approved counselors.

As per their website they do not just provide general guidance, but they also help take you action. And sooner we call them, more options we may have. They might be able to reduce mortgage payment as well as property tax.

It is worth knowing that they do not help with downpayment or mortgage. What they do it help you connect with some local non-profit resources that may be of assistance. They also have relationship with lending agencies and mortgage companies. Due to which they might be able to work out some solution with them.

Here is their website. http://www.995hope.org/

Here is their hotline. 888-995-HOPE

Home Buying (Part 5) - Qualifying for a Mortgage

So our contract on the house got accepted. Inspection came out fine. Or if it had isseus, we took it back to the seller and he was able to handle it to our satisacation. So now contract is accepted by both parties. We need to decide on a closing date and get on to finding best mortgage rates. Lets see what are different morgages available.



1. 30 Year Fix - Most common one. Provides for same payment through out the life of the mortgage and minimum monthly payment. Some lenders may provide 20 or 40 year morgage too.

2. 15 Year Fix - Same as above. But since you pay off the loan in 15 years, your monthly payment will be higher, but you end up paying less interest. This type of loan might be helpful during refinancing. For example you had a 30 year loan and then after a while rates went down (usually atleast rate should go down 1 point to cover for closing costs), you have about 20 or so years left on loan, getting it refinanced for 15 year fix may keep your monthly payment almost same, yes you will finish loan soon and also pay less interest.

3. ARM (Adjustable Rate Mortgage) - This is the kind of interest rate, because of which we are in financial mess right now. Yes it does make in certain scenarios. eg. You are not planning to stay in same house for more than 4-5 years.

4. Interest Only - This is the kind of mortgage where you pay only interest during part or full mortgage term. Capital is paid off at the end of the term or at the end of predefined term.

5. Biweekely Mortgage - Could be same at 30 Year fix mortgage, but it is paid Biweekely. Hence reducing the interest greatly.

There are couple of websites that let you put your information and provided you couple of quotes.

I loved http://www.zillow.com/ the most. No personal information is required. You get you contact the lender you think is best.
Another good one is http://www.lendingtree.com/ . But here you do have to provide all personal information before you can get any quotes.