Modifying Your Loan
March 18, 2009
The advertising and the telemarketers are ramped up to solicit homeowners with "toxic loans" or at least with loans that have high balances or high interest rates. I was interested in an article on the front page of the March 11, 2009 Wall Street Journal that was entitled "Housing Plan Creates Opening for Scammers". The administrations foreclosure prevention plan was designed to assist borrowers in lowering their mortgage payments to levels that are approximately 31% of the borrower's monthly income. The bill provides an incentive for loan servicers who successfully modify loans.
As part of the article, an inset was entitled "Home Truths". This inset read "The Federal Reserve recently issued advice for people seeking to modify their mortgage:
# Work with only HUD=approved nonprofit counselors. (See http://www.hud.gov/ )
#Don't agree to pay a fee before you are provided with the promised advice. (I would add that paying a fee should be a "red flag" to further investigate the counselor"s credentials.)
#Beware of people offering "guaranteed" results.
#Don't sign blank forms of documents you haven't read. (Any blank document should be questioned before signing and probably should not be signed.)
My blog-post of March 3, 2009 also addressed the issue of loan modifications. For many truly hurting borrowers who want to retain their homes, the loan modification process can be a real winner. The success of the program will depend on how it is implemented and how many borrowers can actually qualify for the new terms. To date the government's previous HOPE plan has only assisted fewer than 50 borrowers. We shall "hope" that the new rules are the result of intelligent tweaking of the plan.
The advertising and the telemarketers are ramped up to solicit homeowners with "toxic loans" or at least with loans that have high balances or high interest rates. I was interested in an article on the front page of the March 11, 2009 Wall Street Journal that was entitled "Housing Plan Creates Opening for Scammers". The administrations foreclosure prevention plan was designed to assist borrowers in lowering their mortgage payments to levels that are approximately 31% of the borrower's monthly income. The bill provides an incentive for loan servicers who successfully modify loans.
As part of the article, an inset was entitled "Home Truths". This inset read "The Federal Reserve recently issued advice for people seeking to modify their mortgage:
# Work with only HUD=approved nonprofit counselors. (See http://www.hud.gov/ )
#Don't agree to pay a fee before you are provided with the promised advice. (I would add that paying a fee should be a "red flag" to further investigate the counselor"s credentials.)
#Beware of people offering "guaranteed" results.
#Don't sign blank forms of documents you haven't read. (Any blank document should be questioned before signing and probably should not be signed.)
My blog-post of March 3, 2009 also addressed the issue of loan modifications. For many truly hurting borrowers who want to retain their homes, the loan modification process can be a real winner. The success of the program will depend on how it is implemented and how many borrowers can actually qualify for the new terms. To date the government's previous HOPE plan has only assisted fewer than 50 borrowers. We shall "hope" that the new rules are the result of intelligent tweaking of the plan.
posted by shirley harry at 8:39 AM
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