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Mortgage Modification: Avoiding the Traps

December 31st, 2008

The Washington Post recently ran a piece that warned of some of the pitfalls that await borrowers who wish to modify their mortgages. In particular, there are many unscrupulous operators who are willing to take substantial sums in upfront fees, but who then fail to deliver the most appropriate modification.

In fact, the worst for-profit modifiers often do not deliver anything at all. They just take hard-pressed borrowers’ money and run.

If you’re thinking of modifying your mortgage, you may find that a nonprofit advisor can help you for nothing. But–unsurprisingly in this climate–many nonprofits are overwhelmed by demand, and simply cannot respond quickly enough to urgent cases.

That’s when for-profit advisors may be the only alternative. By all means use one. But be very careful who you choose, watch them like hawks, and try to make sure that the bulk of their fees are paid only when a good deal is actually in place.

First Time Homebuyers Face New Fannie Mae Requirements

October 29th, 2008

Happy New Year to first-time buyers! Now, unless you have perfect credit and a solid application, get your butt to a housing counselor. In 2009, Fannie Mae will require counseling for first timers using non-traditional credit to qualify or getting a MyCommunityMortgage loan. You already have to undergo pre-purchase counseling and landlord training if you want to buy multi-family property (like a duplex or four-plex) with a MyCommunityMortgage loan.

Only  independent and certified third-party agencies or counselors are accepted, and your education will include budgeting and credit, choosing a home, and obtaining a mortgage. Homebuyers receive custom assessments of their financial positions aincluding their readiness for homeownership, and an analysis of their finances and credit history. Click HERE to find a list of accredited counselors.

Fixing the Mortgage Mess One Home at a Time

March 21st, 2008

Well-intentioned community agencies are hitting a brick wall as they try to re-work subprime and other mortgages threatened by foreclosure. Mortgage counseling programs are not getting much cooperation from mortgage lenders. Oops, make that mortgage holders. Gone are the days when you could buy a home and your local bank held the mortgage. Nowadays, mortgage loans are promptly packaged and sold to obscure entities that often have legal agreements preventing mortgage servicers from changing the terms of mortgages sold into the secondary market.

Is Wall Street the only street that matters when it comes to owning a home? Does the entire US economy have to tank before the broken mortgage industry is fixed?

Hope Now: Housing Assistance Coalition

March 7th, 2008

Hope Now, the housing assistance coalition, has assisted more than one million households struggling with foreclosure. It’s important to note that approximately 278,000 of these cases involved loan modifications. Modifying the terms of a mortgage loan can help homeowners maintain their payments by eliminating rapid rate increases, negative amortization and other “exotic” terms that can make it difficult for homeowners to make payments once the initial period of very low payments expires.

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Lower Mortgage Rates Bring January Thaw

January 17th, 2008

Mid-January news stories brought some rays of sunshine into the mortgage and housing markets:

This wave of stories included some good news for homeowners and new buyers alike, but perhaps should be best received by existing mortgage holders.

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