The interest only loan, despite its name, does not guarantee that a person will only pay the interest on the loan forever because if that were the case, the bank would never be paid in full for the loan. This also doesn’t make sense for the homeowner because they will never be able to own their house outright. Interest only loans work by only paying the interest for the first five to ten years of the mortgage.

When applying for one of these loans, keep in mind that the time schedule for repayment will affect when the prices of repayment will increase. Typically, a thirty year no interest loan will ask for only payment on the interest for the first five years. A forty year mortgage option will usually have a ten year period attached to the payment process where only the interest will be charged.

After the interest payment period ends, a person’s principal payment on their mortgage will increase to the regular rates. However, because only a small portion has been paid back, paying the interest serves as a temporary fix for financial difficulties. For this reason, a person with one of these types of loans should try to pay more if at all possible to decrease the length of the payback period.

One group of people that benefit from this type of set up are salesmen and other people who work on commission. A fluctuating salary can mean that a person, who is not wise with their money, may not make enough to cover a payment. When this happens, the bank will foreclose on a home. A way for commission based salaried people to keep their homes is by utilizing this system.

Interest only mortgage loans are viewed as being risky endeavors, but with a solid business plan, they can actually be beneficial. Understand that over time payments will increase depending on the length of the mortgage payback period. People with fluctuating income levels can benefit from this arrangement and they can be refinanced at anytime into standard mortgage plans.

After you get your home loan, you may want to consider doing a home remodeling. One thing that this will require is help with storing furniture and/or tools. Using Portable On-Demand Storage can be a great way to helping make sure these projects go smoothly. For more information on them and other options, click on the following link: Moving Containers.

Article Source: http://EzineArticles.com/?expert=Frank_Dean_Miller

As forementioned, the process’ goal is to modify the original terms of a mortgage agreed upon by the borrower and lender, and may reduce interest rate, reduce monthly payment, modify the length of the loan, or reduce the amount of the mortgage, and many times will include any arrearage placed at the back of your loan. The process starts by you, the homeowner, calling the lender and requesting to do a loan modification.

You’d want to modify your loan if you are behind, or about to become behind on your mortgage, or are upside down, owing more than the current market value of your home, and you want to keep your home. Your credit could be horrible. President Obama’s Making Homes Affordable Program guarantees homeowners, regardless of their situation, interest rates of as low as 2%, regardless of your credit.

Generally speaking, the lender would rather modify your loan than foreclose on it and loose money. That said, however, be assured, if you don’t make your payments, the lender is forced to proceed with foreclosure. A loan mod is one way to help both you, and the lender, from going down that dark and dreary road of foreclosure. Also, remember, the lender doesn’t have to do a loan modification, and if you don’t meet their terms in the re-writing process, your loan modification can be denied. A friend of mine did a loan modification and was denied because he stated he had moved out of the home and was living in another state. For that reason, he was denied. Different lenders have different conditions. EzineArticles is a great source for information for loan modifications. Subscribe to their newsletter and get current and up to date information.

For help or information on getting a loan modification today go to http://www.fastfreeloanmods.com

Article Source: http://EzineArticles.com/?expert=Nell_Williams

A growing number of people are taking advantage of this program, a reflection of the large housing inventory caused, in large part, by foreclosures resulting from the recent economic turmoil. The FHA reports that the number of 203(k) loans taken out in 2008 nearly doubled from the previous year, with 2009 experiencing a 40% year over year increase. Potential homebuyers, attracted by relatively low market prices on foreclosed properties, are often left to contemplate how (and when!) they are going to be able to pay for the repairs once they purchase the house. This is not an uncommon scenario as foreclosed homes, which are often left abandoned, typically need extensive repairs. The 203(k) loan program solves this problem by enabling homebuyers to finance the construction work and start repairs on the home immediately after a loan closing. All residential properties, not just foreclosed homes, are potential candidates for the 203(k) loan program.

What is the FHA 203(k) Program?
The FHA 203(k) program is a home rehabilitation and repair program, designed to revitalize neighborhoods and spur homeownership. It can be used by people who are looking to purchase a new home, or by existing homeowners wanting to do repair or renovation work on their current home. What consumers end up with is a single FHA insured mortgage – the loan amount consisting of the home’s purchase price (or current loan balance in the case of an existing homeowner) plus the estimated costs of the construction work.

Normally, someone purchasing a home that is in need of repairs has to first obtain interim financing for the rehab repairs and then additional financing to purchase the home. In this scenario – once the repairs are complete the homeowner must then take out a new mortgage to combine the two loans. With the 203(k) program, on the other hand, a borrower need only obtain one mortgage, which covers the home purchase and the property rehab.

The 203(k) program comes in two flavors; a standard version and a streamlined version. With the standard program, the construction costs must be at least $35,000. The maximum construction costs are limited only by the estimated “as-improved” value of the house (i.e., the value an appraiser estimates the property will be after repairs/renovations are completed). All FHA mortgages, with or without a 203(k) loan, are subject to mortgage loan limits. The mortgage amount can range from $271,050 to $729,750, dependent on where the home buyer resides. The total mortgage amount, which would include any cost of repairs, cannot exceed 110% of the “as-improved” home value. The streamlined 203(k) program is used for situations where the construction costs are under $35,000.

To be eligible, properties must be one to four family structures that are at least one year old. Condominiums may qualify, though there are some added restrictions and limitations. Additionally, FHA allows “mixed use” properties (i.e., properties with both residential and commercial use) to be eligible for the program.

A partial list of what you could use a 203(k) loan for include; replace a roof, add a room, remodel kitchen or bathroom, landscaping, update appliances, repair termite or water damage, update electrical and/or HVAC systems. It’s also important to keep in mind that the program requires certain repairs (if needed) to be made. These mandatory repairs deal specifically with bringing the energy efficiency of the property up to code.

Con’s
The FHA 203(k) loan does not come without some added costs and other potentially negative factors. Consumers need to carefully weigh the pros and cons in order to decide if this program is right for them.

• Homebuyer will incur fees up and beyond the normal mortgage closing costs. A supplemental origination fee – which is the greater of $350 or 1.5% of the portion of the mortgage that is being used for rehab purposes – is required. Additionally, a fee consultant (who is HUD approved) must visit the site prior to the appraisal to ensure compliance with program requirements. Expect to pay $100-$200 for this service.
• Takes longer time to close on mortgage loan – up to 4 weeks longs than a normal conventional mortgage
• Have to use an FHA approved lender. Though many such lenders exist- not all lenders will participate in the 203(k) program.
• Some lenders may prefer to deal with a home buyer who is able to pay cash for a home (versus someone using the 203(k) program) due to getting a quicker loan closing turnaround.
• Expect more paperwork than a normal conventional or FHA loan

Pro’s
• Access to funds needed to complete repairs and/or renovations
• Convenience – homebuyer does not have to find separate financing for construction, plus construction begins immediately after loan closing
• Speed of construction – the process of completing construction work is typically quicker than if the homeowner were to conduct renovations on their own
• The 3.5% down payment – conventional mortgages typically call for 10-20% down payments.
• Ability to finance up to six monthly mortgage payments.

The 203(k) Loan Process Step by Step
The 203(k) process has more paperwork and steps than one would experience in a conventional mortgage process. The steps are as follows:

1. Borrower finds a home to purchase and repair/rehab (or seeks to repair/rehab current residence)
2. Borrower and their real estate agent completes a preliminary feasibility analysis to determine the extent of work required, along with an approximate estimate of the cost and expected market value of the home once all work is completed
3. Sales contract is executed
4. borrower selects and works with a FHA-approved lender
5. Borrower, contractor, and an FHA-approved consultant meet at the property to determine “required” vs. “desired” improvements
6. The fee consultant prepares the write-up
7. Home buyer enlists contractors to make bids – then selects a contractor
8. Lender gives the construction plan to FHA-approved appraiser to determine “as-improved” value
9. Lender determines maximum insurable mortgage amount for the property based on the “as-improved” property value
10. Loan is underwritten by lender- if approved lender issues a “firm commitment” and a loan closing is scheduled
11. Loan is closed. Funds are set aside in escrow accounts. The loan is FHA insured after loan closing
12. The work begins. Contractors are paid in draws as FHA fee consultant approves each phase of completed work. Homeowner has six months in which to complete the entire work
13. After work is completed – and the borrower states that all work has been completed to their satisfaction, a HUD inspector conducts a final inspection. If the inspection proves OK – the lender pays the remaining draw to the contractor. A final 10% may be held back for up to 35 days to ensure no liens are placed on the property

It should be apparent that the FHA 203(k) program offers a viable solution for some home buyers seeking funds for home repairs or renovation. Each individual needs to consider the pros and con’s and apply it to their own unique situation.

ConsumerFinanceReport.com features an extensive article library covering a wide range of personal finance issues and topics, such as the article regarding FHA 203(k) Loan Programs. Sections focused on mortgage topics educate consumers on loan modification and tips on refinancing.

Article Source: http://EzineArticles.com/?expert=J_Newton

What is a loan modification and its advantages?

You may have more than one loan that makes you pay a monthly installment from your earnings. You may have got into a sudden critical position which requires a part of your monthly income. You might be facing trouble paying back all your monthly installments and you may already be lagging with a bad credit. You can do a loan modification by talking to your lender, it is a process by which all your existing loans, including student loans, can be combined together where you pay only one single repayment installment every month.

The Countrywide Loan Modification process is easy, sets you free, and relieves you from huge monthly repayment burdens. Just try to understand the loan modification process and advantages of loan modification, and then you are all set to go and apply one.

The secret behind this is pretty simple–no bank wants to foreclose on your home. So they give a bit of cushioning to you and allow you to repay with an affordable monthly payment. The major advantage is that you don’t have to foreclose and you can stay in your own home.

Try to understand the basics first

1. It is been studied that less than 15% of home owners have only spoken directly to their lenders. Make yourself ready to speak openly to your lender and explain your problems clearly, so that you may get the advantage of getting your modifications done in your mortgage payments.

2. There are many different types of loan workout options offered by countrywide and there are many departments to carry out this job. You have to first choose the right option that suits you and then get ready with your application.

3. A loss mitigation department is there open to you always to resolve the issues and finalize a find out some better solution for you.

4. Be well prepared before approaching them, you should have all the required documents readily available to present and you should be clear about your past and present financial information.

Easy steps to follow

1. Fill out the application form.

2. Keep all required financial documents ready, such as: bank statements, paycheck stubs, and all relevant documents to clearly explain you’re previous and current financial situation.

3. Provide documents to prove your assets, monthly income and expenses and documents to prove the reason for your current financial trouble.

4. Approach Countrywide and the only job you have to do is to make them understand what went wrong and what the reason is for your financial hardship.

As the guidelines for acceptance are standardized to everyone by the new Obama Home Affordable modification plan, your Countywide Loan Modification process has become very easy and you can definitely get it done.

For detailed information on How to Obtain a Countrywide Loan Modification, visit MortgageModification411.net

Article Source: http://EzineArticles.com/?expert=Bill_Witherman

There are programs available through the Federal government and administered by banks and other lending institutions. The Federal program, called Making Homes Affordable, is available to homeowners who have a good payment history on an existing mortgage owned by Fannie Mae or Freddie Mac; however, many lenders provide their own programs that do not have this requirement, so you should talk to your lender and see what programs they have available. You will have to select the program that is right for you.

These programs can modify your existing mortgage in a number of ways-they can lower the interest rate on your home to as low as 2%, extend the term of your mortgage to as far as 40 years, and possibly forbear or forgive a portion of your mortgage balance so that your mortgage payment is only 31% of your monthly household income.

The specifics of the implementation of the program vary from lender to lender. These programs are designed to be implemented in two stages. The first stage is a trial period for borrowers. Once borrowers can successfully document that they are able to meet the new payment schedule, the lender can convert the trial modification to a permanent modification. The schedule for conversion from a trial period to a permanent loan modification is not spelled out, so lenders vary in how long a trial period they require.

If you are having trouble meeting your mortgage payment, the first order of business is to talk to your lender. They may have a Home Mortgage Modification in place, or they may have several programs, and you need to find the right one depending on your situation. Lenders are not in the business of owning property-they do not want to foreclose on your property, and want to accommodate you as much as they can.

For detailed information on How to Obtain a Home Mortgage Modification, visit MortgageModification411.net

Article Source: http://EzineArticles.com/?expert=Bill_Witherman

The securitized mortgages are subject to rules created in the investment documents and rules issued by the Internal Revenue Service to secure favorable tax treatment for securitized loans. These rules constrain the ability of the banks to modify mortgages. Such rules may include the following:

(a) Imposing the restrictions on mortgage modification required to be made to qualify for pass through tax treatment under IRS regulations.
(b) Imposing restrictions upon the number of mortgages in the pool which may be modified.
(c) Providing a procedure and fees to be paid for foreclosure but no procedure to modifying the loan as an alternate dispute resolution.
(d) Creating securities with classes of ownership (”tranches”) with adverse and opposing financial interests resulting in so called “tranche warfare” so that a modification which favors one tranche may work a detriment upon another.
(e) Restricting the ability to lower interest payments on the note.
(f) Restricting the ability to increase the number of payments to be made.
(g) Restricting the ability to defer payments.
(h) Restricting the ability to extend the term of the mortgage.
(i) Restricting the ability to impose a temporary moratorium on payments.
(j) Restricting the ability to accept “short sales”.
(k) Creating potential liability to a specific class of certificate holders by entering into a modification agreement required for an alternate dispute resolution.
(l) Requiring the servicing agent to purchase any loan which has been modified.

These restrictions work a modification of the Transaction without the consent of the borrower. This constitutes either a breach of contract or a tortious interference with a contract, or both. Failure to have obtained the consent of the borrower to a securitization of the mortgage is a legally fatal flaw.

Following the rules imposed on securitized mortgages constrains and restricts the ability of banks to modify loans. Even where the loan is modified only by extending the term of the loan so that the original principal and interest rate are unchanged, the cash flow generated may not be sufficient to permit modification of the loan if the investors hold fixed rate bonds. In short, banks make fees when they foreclose; banks incur actual and potential liability when banks modify mortgages.

The Administration and the banks have shown nothing more than a willingness to pay lip service to the achieving loan modifications instead of foreclosure. Documents issued by federal financial agencies and Congressional Committees show that the government is fully aware of the institutionalized constraints but loath to discuss such constraints with members of the public. There has been no serious effort by our government to address and overcome the institutionalized constraints to loan modification. Until there is a serious countervailing force to compel lenders to modify mortgages which overrides the institutionalized constraints, the sorry rate of foreclosures will continue unabated. Unless such a countervailing force emerges from the private sector or from a need to respond to massive political pressure, very little is likely to change.

The discussion above has shown that the note holder disappears in securitization and the securitization works an illegal modification of the Transaction without the consent of the debtor. As organized, securitizations have a third major difficulty. Typically a third party to the Transaction is required to make any monthly payment to the certificate holders which is in default. In other words, if a specific mortgagor fails to make the January payment, a third party will make the payment for the mortgagor. Accordingly, the allegation in a foreclosure proceeding that the January payment was not made and is in default is false. The January payment was paid to the investors. How many times must the investors be paid the January payment? Once is enough. Is there any requirement in the Transaction or anywhere else that only the named mortgagor can make the required January payment to the servicing agent? Absolutely not.

It may well be that such a third party who has made payments in default is entitled to a legal recovery against the debtor. However, that party is not a party to the mortgage or a successor in interest to the mortgagee and therefore has no right whatsoever to foreclose to effect repayment. To use the mechanism of foreclosure to recover the third party debt perpetrates a fraud and misuse of the foreclosure proceedings. The mortgage is not intended to secure repayment of anyone. It is intended only to secure repayment of the mortgagee and the mortgagee’s successors in interest. In the case of securitization, the third parties making payments in default are indisputably not the successors in interest of the original mortgagee.

It is but a question of time until Congress and the courts are compelled to recognize that securitization, as practiced and without any public regulation, has resulted in “Morgicide”, the illegal and intentional destruction of mortgages by Wall Street. The upshot of this Morgicide will be the realization that the nation’s largest banks and financial institutions have caused millions of illegal foreclosures. Think of it this way. Your neighbor purchased a new car with an installment credit loan. Your neighbor has failed to make monthly installment payments. The dealer has the right to repossess. Instead, I come along and take the car. The police arrest me and charge me with Grand Theft Auto. At trial, I defend myself by arguing that since my neighbor was in default, I had the right to repossess the car. Sorry, this will not work, and I am going to jail.

The judge will rule only the dealer, not me, has the right to repossess. I acted as a mere thief in the night. Similarly the financial institutions acting as plaintiffs in the foreclosure of securitized mortgages are acting like the thief in the night. They are taking the house on behalf of the secured creditor without being the secured creditor.

So far, just as in the Sherlock Holmes mystery known as “Silver Blaze” where the dog did not bark in the night, our judges have been suspiciously silent. This will change as more and more lawyers become familiar with securitization. Look to see multibillion dollar class actions suits for wrongful foreclosure as part of the shameful legal legacy of unregulated securitization. As long as lawyers chase ambulances and sue for malpractice, Morgicide will not go unpunished.

For more information contact:
Richard F. Kessler
Documentary Clearing House and Associates, LLC.
941-924-5608,
richardfkessler@verizon.net
http://www.documentaryclearinghouse.com

DCH OPENS NEW FRONTIER FOR DEFENSE OF FORECLOSURE

The Stop Foreclosure Package contains legal forms, explanations and instructions to enable the user to argue the unenforceability of the mortgage and find the evidence which supports each legal defense asserted. When a mortgage is converted into a security, fatal legal errors occur. The Stop Foreclosure Package identifies the errors and provides the tools needed to find the proof required. The Stop Foreclosure Package enables each customer to purchase as an individual and defend like an army.

The Stop Foreclosure Package is priced as follows:
$349.00 plus tax…………….pro se for an individual for a one time use.
$599.00…………………………for a single attorney with unlimited right to reuse.
$799.00…………………………for a law firm of attorneys with unlimited right to reuse.

DCH may not represent you legally or provide legal advice. Please give us the opportunity to help you save your home and delay foreclosure by using our Stop Foreclosure Package for the price of one half month’s rent. You cannot afford to miss this opportunity to try to save your home.

Article Source: http://EzineArticles.com/?expert=Richard_Kessler