Justice for Mortgage-Relief Scams

Found on Money Tips here:

“Operation Mis-Modification” may sound like a bad TV sitcom or a strange new form of pageant, but it is actually a joint effort from the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and officials from fifteen states, designed to crack down on mortgage-relief scammers.

During the mortgage crisis, desperate homeowners sought help from third-party firms promising assistance in modifying mortgages to get more favorable terms and allow them to stay in their homes. Unfortunately, scam artists preyed on some of these vulnerable people – taking their money while delivering poor or no services and leaving them worse off than before.

The FTC and the CFPB have filed lawsuits against nine of these firms, and the state attorneys general are filing 32 similar suits against other alleged scammers. It is not yet clear how much of the proceeds of any successful lawsuits or settlements will go toward the harmed parties, or how those proceeds can be claimed by those affected. The FTC has been pursuing cases of this nature since 2008, with 48 lawsuits filed since then, including six in this recent round.

The suits cover a variety of violations, with a common complaint of advance fees charged to homeowners for modification services. This is illegal under the Mortgage Assistance Relief Services Rule (MARS for short), which prohibits mortgage modification service providers from accepting payments until the homeowner has an acceptable written offer in hand (acceptable by the homeowner’s definition).

Other allegations made against various firms named in the suits include advising clients to stop making any mortgage payments, causing clients to lose their homes outright; bogus guarantees that mortgage modification would be successful or rebates would be provided; claims of special relationships with specific lenders or the ability to run “forensics” on loans to find errors that could be used to force loans to be modified; and false affiliations with government programs.

Some of the firms made half-hearted, shoddy attempts to submit loan modifications on behalf of their clients, and those attempts were subsequently denied. Others did not even bother to make any effort at all and simply pocketed the money.

It is important to point out that there are honest and useful third-party mortgage assistance firms that do their best to assist their clients. How do you identify and avoid the scammers?

Your mortgage company needs authorization to work with any third party in order to protect your private information. The CFPB has a model authorization form that is similar to the one most lenders will require; it can be found at http://files.consumerfinance.gov/f/201407_cfpb_handout_allowing-a-third-party-to-work-with-your-mortgage-company.pdf. This page spells out important ways to structure this form and questions to ask to make third-party fraud less likely.

The CFPB also suggests a few other red flags to watch out for:

Guarantees – Nobody can make a valid guarantee that your loan can be successfully modified. That is in the lender’s hands.

Payment Up Front – Only a lawyer licensed in the state where you live or where your house is located can ask for upfront money for foreclosure relief and loan modification services – all others would be breaking the law. Even if they are properly licensed, requests for upfront money or periodic payments prior to any loan modification are sketchy at best..

Unsolicited Assistance Calls – How did they get your information? Challenge them on that point and ask where they are licensed to practice – or simply hang up and do your homework, then call a firm on your own..

Lack of Legal Support – If you speak to other representatives but never to a lawyer, that is a bad sign.
Operation Mis-Modification is sure to put a dent in mortgage relief scammers, but sadly, there are likely plenty more waiting in the wings. Avoid falling victim to scam artists and potentially losing your home by doing research before signing with any third-party mortgage assistance firm.

HARP 2.0 Answers From Freddie Mac Executive

If you live in Arizona and are interested in the HARP refinance program, chances are that you have heard both good and bad things.  True, many people have already taken advantage of the HARP 2.0 refinance program but many more people who potentially could qualify haven’t.

Why?

Who knows exactly, but there is more than just one myth floating around about the HARP program – and recently one of Freddie Mac’s senior executives wrote a blog post about the myths of HARP. Here is what SVP at Freddie Mac Tracey Mooney released answers to these common myths.  From Freddie Mac’s Blog:

Myth No. 1: I’ve had my loan for many years, and with HARP I’d have to start all over again with a 30-year mortgage.

Fact: You can refinance into fixed-rate mortgages with terms anywhere from 10 years to 30 years. Check with your lender to see if it offers shorter terms.

Myth No. 2: I’m receiving too many solicitations to help me refinance. They must be scams.
Fact: Many homeowners are wary of the numerous solicitations they receive to refinance their mortgages. Legitimate offers often have specific information identifying your current mortgage, including your loan number. If you are unsure whether an offer is legitimate, call your lender before responding to third-party companies that advertise themselves as “mortgage experts.” If you do suspect that an offer is a scam, report it immediately by calling 888-995-HOPE.

Myth No. 3: I am really underwater on my mortgage. HARP can’t be for homeowners like me.
Fact: HARP has been enhanced several times since the program was first introduced in 2009. Now, HARP doesn’t have any loan-to-value restrictions for fixed-rate mortgages, so even if you owe much more on your home than it is worth, you may be eligible.

Myth No. 4: I recently lost my job, so no one is going to help me refinance through HARP.
Fact: If you are pursuing HARP through your existing lender, at a minimum you will need to show a source of income for at least one borrower on the loan. Alternatively, if you have available funds equal to at least 12 months of principal, interest, taxes, and insurance, then you may be eligible. If you are looking to refinance through HARP with a new lender, the income documentation and qualifications have been simplified. In either case, reach out to your lender to discuss your options.

Myth No. 5: My lender doesn’t offer HARP, so I can’t refinance through the program.
Fact: If your existing lender doesn’t offer HARP, you can contact other lenders for help. Review Freddie Mac’s and Fannie Mae ’s lists of participating HARP lenders to find a lender who can discuss your options and eligibility with you.

Myth No. 6: I have an adjustable-rate mortgage (ARM), so I am not eligible.
Fact: HARP was created to help homeowners like you transition into mortgages with more stable and sustainable terms. With rates still at historic lows, consider refinancing into a fixed-rate mortgage where you’ll have the security of knowing what your payment will be for the entire term of the loan.

Myth No. 7: I can’t refinance because my property is a condo.
Fact: HARP allows you to refinance even if your property is a condo. In fact, HARP also allows you to refinance investment properties or second homes.

Myth No. 8: I don’t have enough cash to pay closing costs, so I can’t refinance through HARP.
Fact: Not all homeowners will have to pay out-of-pocket closing costs with a HARP refinance. Talk with your lender about rolling your closing costs — and any other monies due at closing — into your new mortgage.

Myth No. 9: HARP is only for homeowners who are behind on their payments and in danger of foreclosure.
Fact: HARP is intended specifically for homeowners who are current on their mortgages but are underwater and unable to refinance through a traditional refinance.

Are you in a situation where you think you may be able to refinance but wonder if it is really possible? It is relatively easy to speak with a HARP expert and see for yourself if you can qualify for the HARP program – don’t just hear something about the program and assume its true!

 

Subprime Mortgage Loans Making a Comeback in 2013

Thought we were done with subprime mortgages forever?

We aren’t.

Lenders are starting to offer subprime mortgage loans and even the press is starting to notice.  The LA Times ran a story about a couple who had a foreclosure got a subprime loan from a lender above a 10% interest rate and was happy about it.  Just think – how many other people who have recently been through a foreclosure or short sale would be happy about getting a loan right after it? This particular couple viewed it as a “bridge loan” – which can make a lot of sense in a rising real estate market.

Michele and Russell Poland’s credit was shot, but they managed to buy their suburban dream home anyway.

After a business bankruptcy and a home foreclosure, they turned to a rare option in this era of tightfisted banking — a subprime loan.

The Polands paid nearly $10,000 in upfront fees for the privilege of securing a mortgage at 10.9% interest. And they had to raid their retirement account for a 35% down payment.

Most borrowers would balk at such stiff terms. But with prices rising, the Polands wanted to snag a four-bedroom home in Temecula near top-rated schools for their 5-year-old son. By later this year, they figure, they’ll be able to refinance into a standard loan.

“The mortgage is a bridge loan,” said Russ Poland, now working as an insurance investigator. “It was expensive, but we think it’s worth it.”

In the aftermath of the housing crash, there’s no shortage of Americans who, like the Polands, are eager to rebuild their shattered finances. In response, lenders are emerging to offer the classic subprime trade-off: high-priced loans for high-risk customers.

Before the housing crash, many people would get subprime loans and think nothing of it. Then the housing crash happened and it was blamed on the “bad, bad subprime loans” – which may or may not have been the primary reason for it.

Before the housing bust, a sprawling business arose in subprime mortgages and their cousins, so-called alt-A loans, which were issued to people who had decent credit but did not have to prove income. About $1 trillion in subprime and alt-A loans were originated in 2005 and again in 2006 — more than a third of all home loans, according to the trade publication Inside Mortgage Finance.

But the explosion of mortgage defaults that began in late 2006 vaporized an entire industry of subprime specialists. The Wall Street firms that had bundled the loans into securities soon began to implode as well. Little wonder that loans for the credit-challenged disappeared.

Today’s high-risk lenders differ from those during the housing boom in key ways. These lenders say the new subprime mortgages are actually old school — the kind of loans made in the 1980s and 1990s. In other words, a borrower’s collateral matters, down payments matter, income and ability to pay matter.

If you are in a situation where you have went through a foreclosure or short sale or bankruptcy and are having trouble getting a “standard” loan – maybe it is time to look into getting a subprime loan again – lenders are offering them at reasonable terms and if you have the ability to repay it (good job, stable history, big down payment, etc.) then it may make a lot of sense.

Obama Refinance Program and HARP For Loans Owned by Fannie Mae and Freddie Mac

If you haven’t heard the terms Obama Refinance or HARP Refinance or anything similar to it, you soon might.  Fannie Mae is ramping up to help all homeowners hear about the HARP refinance program that was first announced by President Obama a couple of years ago because there are still millions of homeowners who can take advantage of the program and save on their mortgage.

Is the HARP refinance program more popular in 2013 than it was in the past? Yes. Because we are now into HARP 2.0 where lenders have expanded the guidelines to let more people participate and be eligible.

And even though there isn’t an official “Obama Refinance Campaign” and the marketing materials that Fannie Mae is getting ready to send out with lenders across the US doesn’t have the word OBAMA on it anywhere … plenty of people still know HARP as the Obama refinance program.

Officially, the Home Affordable Refinance Program is the name of it.

The Obama Refinance Program / HARP Refinance in 2013

HARP 2.0 is now here and plenty of people are wondering about the guidelines. The initial intent of the program was to help homeowners who owe more on their house than it is worth due to falling real estate values – and allow them to refinance into a lower rate.Highlights and some general lender guidelines of the HARP / Obama refinance program include:

  • Current mortgage must have been obtained before May, 31, 2009.
  • Some lenders have loan to value restrictions, some don’t
  • Some lenders have minimum credit score requirements, some don’t
  • Some lenders may wave a required appraisal
  • 1-4 Family Primary Residence, Second Home, 1-2 Family Non-Owner Occupied, and Condominiums & PUDs are eligible
  • Private Mortgage Insurance transfers are allowed with certain mortgage insurance companies
  • Most lenders will require that subordinate liens (second mortgages) be re-subordinated
  • Most lenders require no late payments in the last 12 months
  • Most lenders will not allow a bankruptcy or foreclosure in the last 7 years

Required Benefits

Most lenders will require that in order to do a HARP refinance, you will have to benefit from it in one of the following ways:

  • Reduction in the monthly principal and interest payment
  • Reduction in the interest rate
  • Reduction in the amortization term
  • Move to a more stable product, e.g. ARM to Fixed-Rate

Does Fannie Mae or Freddie Mac Own Your Loan?

In order to be eligible for the Obama refinance / HARP program, your loan must be backed by Fannie Mae or Freddie Mac. Both have tools on their websites to see if they own your loan. To see if either one holds your mortgage, you can check Fannie Mae. If they don’t have your mortgage there, then check Freddie Mac.

HARP Mortgage Marketing

If you haven’t heard about the HARP refinance program, you soon will. Millions of pieces of direct mail are soon to be going out to let people know of the benefits of the program and what they can do to qualify.  What the direct mail pieces won’t tell you? That in order to get the best deal, you will want to get a written quote from multiple lenders.  Getting a quote from multiple lenders will get you the best chance to see what each lender can do for you and let you know what your options are. Getting a quote on the HARP refinance program is free and only takes a few seconds. Get started today and get a quote right here.

Can You Assume a VA Mortgage Loan?

Interest rates can’t stay low forever – they go up and down. When interest rates are down, people get mortgages that are locked in for the term of the loan at a very low rate. What happens when rates go up and people want to sell their house? The buyer may ask about whether or not their loan is assumable. Two of the most popular loan programs over the last few years are the FHA loan and VA loan programs.

Are VA Mortgages Assumable?

In order to find out if VA loans are assumable, the VA manual on loans is the source of the answer. Look in Chapter 5, section 7. From the source:

General Information about Assuming a VA Mortgage

Under certain circumstances, properties that are security for VA-guaranteed loans may be sold even though the loans are not paid in full. Borrowers who sell their properties under these conditions remain liable to VA for any loss that may occur as a result of a future default and subsequent claim payment, unless the property is sold to a creditworthy purchaser who agrees to assume the payment obligation.

Who Can Process VA Assumptions

While procedures for processing requests for assumption approvals previously depended on the date of loan (commitment made on or after March 1, 1988), the new VA Loan Electronic Reporting Interface (VALERI) regulations authorize loan holders or servicers with automatic authority to determine creditworthiness on all assumption approval requests processed by their servicers.

VA Mortgage Assumption Review Procedures

Transfers of ownership on properties securing loans for which commitments were made on or after March 1, 1988, must have the prior approval of the loan holder or its authorized servicing agent if either of them have automatic authority. If neither the holder nor the servicer has automatic authority, the servicer must submit a credit package to VA for underwriting. The following subparagraphs describe processing details. A seller must apply for approval of the transfer prior to completing the sale. Servicers and holders with automatic authority must examine the application to assess compliance with the provisions of 38 U.S.C. 3714. VA will make the determination in a case where neither the servicer nor the holder has automatic authority, following receipt of a complete application package from the servicer.

To approve the transfer of ownership:

  • The loan must be current or will be brought current at the closing of the sales transaction,
  • The prospective purchaser of the property is creditworthy, as determined in accordance with 38 CFR 36.4840 and VA Pamphlet 26-7, Lenders Handbook, and
  • The prospective purchaser has agreed to assume all of the loan obligations, including the obligation to indemnify VA if a claim is paid.
  • A processing fee may be collected in advance, including a reasonable estimate for the cost of the credit report. The maximum fee for processing a request for assumption approval and changing the loan records is the lesser

of:

  • Automatic authority – $300 plus the actual cost of a credit report;

or

  • No automatic authority – $250 plus the actual cost of a credit report; or any maximum prescribed by applicable state law.

Note: VA does not specifically regulate when the processing fee may be assessed. However, when the processing fee is collected prior to signing the sales contract, the portion of the fee attributable to changing the servicer’s records (usually $50) must be returned to the seller if the application is denied or the process is not completed. Therefore, VA recommends that the processing charge accompany the complete package.

VA Assumable Loan Processing Time Guidelines: How Long Does It Take?

Automatic Authority: Servicers or holders with automatic authority must complete the examination and notify the seller of the decision within 30 days after receiving a complete ownership transfer approval application package. Without Automatic Authority: Servicers without automatic authority (where the holder also does not have automatic authority) must submit documents to VA within 21 days after receiving a complete application package.

VA Review: VA has 14 days to complete its underwriting review and notify the servicer of its decision. Servicers have 7 days to notify all parties of VA’s decision.

Note: These time periods may be extended by the time lost if delays are beyond the servicer’s control, such as employers or financial institutions not responding to requests for verification or follow-up requests.

Decision Notices

Approvals: If the application for ownership transfer is approved, the servicer must notify the seller and include instructions for the assumption of liability by the purchaser, the amount of funding fee that must be paid, and documentation needed to complete the process.

Disapprovals: If the application is disapproved, the seller and purchaser must be notified. The disapproval notice must include:

  • The reason for the decision and a notice that the decision may be appealed to VA within 30 days
  • The VA address to which the appeal should be sent, which will be the RLC that has jurisdiction over the state where the property is located, and
  • If the application was disapproved for credit reasons, the purchaser must be informed of the basis on which the adverse decision was made in accordance with the Fair Credit Reporting Act.
  • If the application remains disapproved after 45 days (to allow time for appeal and review by VA), the $50 fee for changing the account records, if previously collected, must be refunded.

Yes, VA Mortgages Can Be Assumable

The short answer is yes, VA mortgages may be assumable if approved by the lender. If you are interested in assuming a VA loan be sure to get a quote on a new VA mortgage from multiple lenders so that you have all of the information needed to make the best financial decision possible. Get a free quote on a VA mortgage today.

Best Refinancing Company in Arizona

Searching for the best refinancing company in AZ? It’s a good time. Rates are low are there are plenty of lenders who are actively lending money. Just a few of the popular refinance programs that lenders are seeing a boom in when rates are low are the:

Of course there are others, but those are just a few of the ones that lenders are doing. Loan officers are busy with all kinds of different clients who want to refinance their mortgage to save some money – because even a 1% drop in your mortgage rate can possibly mean hundreds on your mortgage payment.

Getting The Best Deal on Your Refinance

Getting the best deal on your refinance (no matter what program you are wanting to do) isn’t really all that hard to do – all you need to do is shop around. In the old days, to shop a lender you would need to open the yellow pages, find the mortgage section and then pick up the phone and call as many lenders as you could stand to talk to. Now with the internet, you can easily get multiple quotes from lenders in Arizona who are local and can help you with your refinance.

Simply choose a few lenders who have updated their rates daily and see which one can give you the best overall deal when it comes to mortgage rates and fees and turn times.



2013 Obama Refinance Program aka HARP

Quite a few people seem to be searching for more information on “Obama Refinance Program in 2013″ and based on the amount of times I see the media talking about it and calling the HARP refinance program the “Obama refinance”, it doesn’t really surprise me.

But is there a refinance program called the “Obama Refinance Program”?

Not officially.

The official name of the Obama refinance is the Home Affordable Refinance Program – but still quite a few people call it the Obama refinance and lenders have now gotten used to the idea that people will call them up and ask for more information about the Obama refinance.

The Obama Refinance Program: HARP Refinance

The HARP refinance program was designed for homeowners who owe more on their house than it is worth due to falling real estate values to be able to take advantage of lower interest rates and refinance and save money. Highlights and some general lender guidelines of the HARP / Obama refinance program include:

  • Current mortgage must have been obtained before May, 31, 2009.
  • Some lenders have loan to value restrictions, some don’t
  • Some lenders have minimum credit score requirements, some don’t
  • Some lenders may wave a required appraisal
  • 1-4 Family Primary Residence, Second Home, 1-2 Family Non-Owner Occupied, and Condominiums & PUDs are eligible
  • Private Mortgage Insurance transfers are allowed with certain mortgage insurance companies
  • Most lenders will require that subordinate liens (second mortgages) be re-subordinated
  • Most lenders require no late payments in the last 12 months
  • Most lenders will not allow a bankruptcy or foreclosure in the last 7 years

HARP Refinance Requirements

Each lender will have slightly different rules about what you need to do in order to qualify for the HARP refinance, but generally speaking, lenders will make sure that you benefit from the transaction in order for you to do it. Generally speaking, lenders will require that you benefit in one of the following ways:

  • Reduction in the monthly principal and interest payment
  • Reduction in the interest rate
  • Reduction in the amortization term
  • Move to a more stable product, e.g. ARM to Fixed-Rate

First Step: Find Out Who Owns Your Loan

The easiest thing that you can do before speaking to a lender to see if you qualify for the HARP program is to first find out who owns your loan. If your loan is not owned by Fannie Mae or Freddie Mac, then you will not be eligible for HARP. Both have tools on their websites to see if they own your loan. To see if either one holds your mortgage, you can check Fannie Mae. If they don’t have your mortgage there, then check Freddie Mac.

Shop For The Best Rates

The single best way to save money when doing the Obama refinance is to shop multiple lenders. Shopping multiple lenders will make sure that you have the best chance to get the best rate and lender fees and close your loan in the shortest possible timeframe. When you shop around, you might be surprised at how much money you can save from one lender to the next. Any number of lenders are helping people with the HARP program – and you can easily see the differences in lenders pricing when you shop more than a couple.

Get started here with a free HARP / Obama Refinance quote today!

Bank of America FHA Streamline Refinance

When rates are low, many people want to refinance. And for those people who are in a FHA loan, the FHA streamline program is something that they can take advantage of to help lower their rate and decrease their overall mortgage expense. Bank of America is one of the largest lenders in the US and they have plenty of people who currently make their payment to them each month – AND – they do a decent job of alerting their customers to the possibility of being able to refinance.

Bank of America FHA Streamline: What You Want To Know

The first thing that you want to know is that just because you currently make your payment to Bank of America doesn’t mean that you have to use Bank of America for your FHA streamline refinance. When you have an FHA loan, you can use anyone you want as long as they are an FHA approved lender. The way the FHA programs work are that if you want to get an FHA loan, any FHA approved lender can help you get a new loan – regardless of who currently has your loan.

The Key To Saving Money

The key to saving money when thinking about the FHA streamline program is to shop around! The more lenders that you get a written quote from, the more chances you have to get the best possible deal on your streamline. Getting a quote is easy, but make sure that you get your quote in writing. If it isn’t in writing, chances are that it isn’t valid. Also, know that rates change every day – sometimes multiple times each day – so be sure to shop lenders in a short time period and keep the amount of time that you shop to a minimum so that you can lock in the best possible rate.

Start right here – get a free FHA streamline quote today!

Why A VA Loan Makes Sense

A simple story from someone who was interested in a VA loan:

“If you have served in the Military, you are able to apply for a VA home loan. This is a very good option and a great way to get into a home. This is the route that we took in order to get into our first house.

When we applied for a home loan we knew that we would not be able to bring much to the table. With a VA mortgage you really don’t have to have a lot of extra money to get your loan. In the end we only spent about $500 during the whole process.

We knew that if we were able to get a VA loan that we would be able to get a better mortgage rate. Since VA loans are backed by the government, banks charge lower interest rates on them. This is very important if your credit score is not ideal.

Although you can get a VA loan with a lower than average credit score, they do have a cut off. Most banks want you to have a score over 620. If your score is lower than that you will most likely have to work on it a bit before you can get a loan.

The VA can be a bit picky when it comes to homes that need repair. It would be best to find a Realtor who is familiar with VA loans. They will be able to point out if there might be an issue with a particular house getting approved.

I think the reason we had such a good experience with our VA loan was partly because our Realtor knew what was acceptable to the VA and what wasn’t. She pointed out when she thought something in a house we were looking at would cause an issue when the VA came to approve the house. The house we ended up buying didn’t have any issues and passed the VA inspection without any problems.

This doesn’t mean you can’t buy an older house with a VA loan. You just need to be aware of what they are looking for and what you and your budget would be able to fix if need be. It would be frustrating to find out the house of your dreams won’t be approved and that you can’t afford to fix what they need you to fix.

If there is anyway you can qualify for a VA loan, I would suggest you go that route. It will be the easiest way for you to achieve a home loan and get into your own house. It will most likely be a better choice for you than going with a conventional loan.”

Are you interested in a VA loan? Find a loan officer at a VA approved lender who can help you today.