California Loans News

California has one of the highest rates of foreclosures currently, resulting from the severe real estate recession. Coupled with rising unemployment, and a recipe for financial disaster is occurring for many.  Loan modifications in California are becoming a more common solution, though not a simple one to come by.

Most mortgage banks or lenders use the same loan modification criteria in California.

• Proven financial hardship, such as death, divorce, loss of job, military service, severe illness, and other.
• The financial duress caused by the said hardship.
• Debt to income ratio as a result of the said hardship.

A loan modification in California is not a simple solution.  An extensive application process is required with numerous documentation.  The terms of the original loan agreement are changed based upon the financial criteria presented to create a payment plan the homeowner can afford.

Contacting a lawyer who specializes in mortgages is the first step, along with being incredibly upfront about the situation.  This person will work to find the best option, whether it is extending the loan for a longer period, dropping the late fees, or settling for less than the full amount owed.  Lenders don’t want to head into foreclosure on a home – after all, they are losing money as well.  It costs lenders more to send out collections and potentially end up with nothing.  Banks and mortgage companies are most likely willing to work in some capacity with the attorney to prevent defaults or bankruptcies.

Ask a loan modification specialist in California to find out what the best options are.  The loan modification will affect one’s credit score, but with a successful payment plan, that score may go unchanged or go up.  A loan modification does not have to have a long term adverse affect, and is still better than the alternative of losing the home.

California has one of the highest rates of foreclosures currently, resulting from the severe real estate recession. Coupled with rising unemployment, and a recipe for financial disaster is occurring for many.  Loan modifications in California are becoming a more common solution, though not a simple one to come by.

Most mortgage banks or lenders use the same loan modification criteria in California.

• Proven financial hardship, such as death, divorce, loss of job, military service, severe illness, and other.
• The financial duress caused by the said hardship.
• Debt to income ratio as a result of the said hardship.

A loan modification in California is not a simple solution.  An extensive application process is required with numerous documentation.  The terms of the original loan agreement are changed based upon the financial criteria presented to create a payment plan the homeowner can afford.

Contacting a lawyer who specializes in mortgages is the first step, along with being incredibly upfront about the situation.  This person will work to find the best option, whether it is extending the loan for a longer period, dropping the late fees, or settling for less than the full amount owed.  Lenders don’t want to head into foreclosure on a home – after all, they are losing money as well.  It costs lenders more to send out collections and potentially end up with nothing.  Banks and mortgage companies are most likely willing to work in some capacity with the attorney to prevent defaults or bankruptcies.

Ask a loan modification specialist in California to find out what the best options are.  The loan modification will affect one’s credit score, but with a successful payment plan, that score may go unchanged or go up.  A loan modification does not have to have a long term adverse affect, and is still better than the alternative of losing the home.

The foreclosure crisis is being seen in different classes, due to the joblessness rates that are continuing to rise. According to Realy Trac, a foreclosure data researcher company, that there will be more or less than 3.4 million homes projected to enter foreclosure before the year ends. This is due to the unemployment streak of 6.5 months per person. Rick Sharga, the senior vice president of Realy Trac said that there is a new wave of foreclosure crisis to come because of these conditions.

Rick Sharga went on to explain, “The first wave of foreclosures was caused by bad loan products, while the second will be driven by unemployment. As of right now, we are at the beginning of wave two.  So virtually there will be no more foreclosures due to subprime lending. The demographics have changed and is now affecting people who are blue collar and entry to midlevel white collar. The foreclosure properties that we are now seeing are with higher loan values.”

He has further stated that perhaps the “best predictor” of locations to be hit hardest in the next wave would be those where unemployment rates are increasing. There will also be a third wave which would involve borrowers who had adjustable rate loans. These types of loans are going to default with “ridiculous rates.” The wave would be pursued by the middle of 2010 until 2011. Which means, that more middle-class people are expected to lose their residential properties.

He also stated that there has been a significant shift of the foreclosure crisis seen in other places besides California, Nevada, Florida and Arizona, which are the topmost locations in the foreclosure trend. What is happening now is that you are seeing places like Michigan and Ohio which were devastated by unemployment show an increase. These foreclosures will much harder to salvage because there is no income for these people.

Sharga also commented on the Obama administration’s move on assisting troubled homeowners via trial loan modification work. “Just by sheer volume alone, the Obama administration’s plan is really having a minimal effect. This loan modification program won’t have any success with the types of foreclosure you see now, because if you are unemployed, you don’t qualify for a loan modification.”

http://californialoanmodificationpros.com/

Spokesperson Norm Magnuson from the group representing credit bureaus said that the first day of November presents a better outlook for troubled borrowers.  November 1^st was to have a new more benign way to report loan modifications sponsored by the government. Through the guidelines of the Consumer Data Industry Association, lenders are to report the loan modifications as “loan modified under a federal government plan.”

According to Craig Watts from FICO, explained that analysts prefer to have a least a year’s worth of performance data before making any changes to its credit-scoring formula. Once there is sufficient data documented from people who went through a federal modification, they will be able to access the accumulated data and determine how predictive it is.

Norm Magnuson further stated that under the association’s guidelines, “If a person is current with his mortgage payments before and during a trial modification period, this typically is about three months, the lender is supposed to report it as current. Once the modification is approved after the trial period, the lender will add a comment that it was modified under a federal plan instead of the dreaded partial payment.”

However, the new designation may still hurt the borrower if FICO decides to treat the modification as a risk factor. But, the prospective lender would still see on the applicant’s credit report the worked up loans and then decide how to treat the information. Magnuson also explained that the new guidelines won’t help those whose loans have already been modified, upon the lender’s discretion that they could apply the rules retroactively.

Tom Kelly spokesman for JP Morgan Chase & Co. said, “In the past we have looked beyond a credit score to someone’s full credit history and we will continue to do that.”

However these reporting guidelines are not applicable to loans that have already been refinanced, been put under forbearance or modified outside of the government programs. These would have another set of reporting guidelines.

http://californialoanmodificationpros.com/

With millions of homeowners who have faced or are facing uncertainty about their ability to continue to be able to pay their mortgages, had had California mortgage modifications in the news for the last several months.

Many California homeowners have been saved by getting a mortgage modification and most likely many more will do so also. This is all due to the nose-diving home values, the skyrocketing unemployment, higher taxes and the ballooning payments which led many homeowners to possible foreclosure or bankruptcy. But is a mortgage modification your only option?

Before deciding if a California mortgage modification is right for you, you need to consider both your short-term and long-term goals before making any major financial and legal decision. Other options to consider if they are right for you are: foreclosure defense, bankruptcy, deed in lieu of foreclosure, refinance, reverse mortgage or a short sale.

For some homeowners you may have a legitimate foreclosure defense, or you may find that your best course of action is to sign the deed of your home over to the lender instead of trying to fight a foreclosure or you may seek a mortgage modification.  Whatever you decide to do, you need a licensed attorney in California who can explain these options and review the pros and cons to both your short-term and long-term goals.

Now depending upon your short-term and long-term goals, a bankruptcy may be a viable option.  For seniors a reverse mortgage may be a better option where you can start taking equity out of your home instead of trying to make payments for it.  If you decide on a short sale, which is when the bank agrees to let you sell the property for less than its value and then wipes out the rest of the debt owed.

Lenders will not tell you what your full options are because their primary object is do what is best for the bank, not for you. So it is very important that you know all of the options that are available.  So the only other person that will look out for your interests, besides yourself, is your attorney.

So please if you have any questions or want to know what the alternatives are to a California mortgage modification, you need to find a licensed attorney in California.

http://californialoanmodificationpros.com/

The California real estate market has been hit very hard in recent years and it is going to get worse because many of the adjustable rate mortgages are ready to readjust between the 4^th Quarter of 2009 and the 1^st Quarter of 2010. The California loan modifications have exceeded the number of home loan modifications in all other states.

Homeowners went for the adjustable rate mortgage with a very low inductor rate with the hopes that their home value would increase or that their income would be higher which would allow them to refinance before the rate changed.

So now California homeowners because of their homes losing value and their incomes not increasing will face another devastation blow as hundreds of thousands will now be faced with a drastic increase in their monthly payments.

So while some homeowners will attempt to get a loan modification before their payment starts ballooning, many others will be caught off-guard.  A loan modification is negotiated with the lender to help both parties. The homeowner will get a monthly payment that they can afford, and the bank does not run the risk of the home going into foreclosure. Lenders are working hard to get loan modifications completed, because they are already holding the tiles to many foreclosed homes that are worth a fraction of what is owned on them now.

Legislation was recently passed in that aims at protecting homeowners trying to eliminate the scam artists and the fraudulent companies that are in the industry. It is very important for anyone who is considering a California loan modification to make sure that the company they are considering is registered with the Better Business Bureau and that they are licensed within the State of California.

You need to ask the law firm if they are in compliance with the new legislation and that they are using escrow accounts for fees, the legislation carved out these rules for any law firms that are helping to negotiate a loan modification.

You need to make sure that you do your homework, whether you have a conventional or an adjustable rate mortgage and you need assistance in getting a loan modification, to make sure you choose a reputable company and that they are licensed in California to do California modifications.

http://californialoanmodificationpros.com/

California mortgage modifications have been in the news for the last several months as millions of homeowners faced or face uncertainty about their ability to continue paying their mortgages.

Nose-diving home values, skyrocketing unemployment, increased taxes and ballooning payments have led many homeowners to the brink or past the brink of foreclosure and bankruptcy.  Many California homeowners were saved by getting a mortgage modification and many more will.  But is a mortgage modification your only option?

As with any major financial and legal decision it is important to consider both your short-term and long-term goals before knowing whether or not a California mortgage modification is right for you.  For some homeowners there may be better decisions ranging from: foreclosure defense, bankruptcy, deed in lieu of foreclosure, refinance, reverse mortgage or short sale.

A licensed attorney in California can explain these options to you and review with you the pros and cons as they relate to both your short-term and long-germ goals.  Some homeowners have legitimate foreclosure defenses.  Others may find that their best course of action is to sign the deed of their home over to the lender rather than fight a foreclosure or seek a mortgage modification.

Bankruptcy may be a viable option but again this will depend on both your short-term and long-term goals.  A reverse mortgage for seniors may be a viable option where you start pulling equity out of your home rather than try to make payments for it.  A short sale is when the bank agrees to let you sell the property for less than its value and wipe out the rest of the debt owed.

It is important to know all of your options.  Lenders will not present to you your full options because their primary object is doing what is best for the bank, not for you.  Typically the only person that will look out for your interests, aside from yourself, is your attorney.

If you have questions or want to know alternatives to a California mortgage modification you should find a licensed attorney in California.

California loan modifications exceed the number of home loan modifications in all other states.  The California real estate market has been devastated in recent years and is expected to get worse as many adjustable rate mortgages are set to readjust between the 4^th Quarter of 2009 and 1^st Quarter of 2010.

Many homeowners got adjustable rate mortgages with very low introductory rates with the anticipation that their home value would increase or their income would increase allowing them to refinance prior to the rate changing.

With most homes losing value and with very few homeowners seeing an income increase, California homeowners are due for another devastating blow as hundreds of thousands of homeowners will be faced with a drastic increase in their monthly payments.

Some homeowners may be caught off-guard while many others will attempt to get a loan modification prior to their payments ballooning.  Loan modifications are negotiated with the lender to help both parties – the homeowner gets a monthly payment they can afford while the bank does not run the risk of the home going into foreclosure.  With the banks already holding the title to many foreclosed homes worth a fraction of what was owed on them, lenders are working hard to get loan modifications completed.

California has recently passed legislation aimed at protecting homeowners in California by trying to eliminate the scam artists and fraudulent companies in the industry.  It is important for anyone considering a California loan modification to confirm that the company they are considering is registered with the Better Business Bureau and is licensed within the State of California.

The new legislation carves out rules for law firms that are helping negotiate loan modifications.  You should ask the law firm if they are in compliance with the new legislation and are using escrow accounts for fees.

Whether you have a conventional mortgage or an adjustable rate mortgage and need assistance in getting a loan modification make sure you do your homework and choose a reputable company  licensed in California to do California loan modifications.

The foreclosure crisis is seen to be spreading into different classes. This is due to the joblessness rates continuing to rise. According to foreclosure data researcher company Realty Trac, there have been more or less 3.4 million homes projected to enter foreclosure before this year ends. And this event occurred due to the unemployment streak of 6.5 months per person. Realty Trac senior vice president Rick Sharga said that there is a new wave of foreclosure crisis because of the said conditions.

Sharga explained, “The first wave was caused by bad loan products, while the second will be driven by unemployment. Right now, we’re at the beginning of wave two. There are virtually no more foreclosures that are the result of subprime lending. The demographics of the foreclosure crisis are changing and affecting people who were blue collar and entry to midlevel white collar. We’re now seeing foreclosures on properties with higher loan values.”

He further said that perhaps the “best predictor” of locations to be hit hardest in the next wave would be those where unemployment rates are increasing. The third wave would also involve borrowers who had adjustable rate loans. The loans of this kind are going to default with “ridiculous rates.” The wave would be pursued by the middle of 2010 until 2011. All these then reflect that more middle-class people are expected to lose their residential properties.

Sharga also said that there is a significant shift of the foreclosure crisis seen in locations other than California, Nevada, Florida and Arizona – the topmost locations in the foreclosure trends. “What’s happening now is that you’re seeing places like Michigan and Ohio that were devastated by unemployment have an increase. Those foreclosures are much harder to salvage because those people have no income.”

He also commented on the Obama administration’s move on assisting troubled homeowners via trial loan modification work. “By sheer volume, the Obama administration’s plan is really having a minimal effect. The administration’s loan modification program won’t have any success with the types of foreclosure you see now. If you’re unemployed, you don’t qualify for a loan modifcation.”

The first day of November presents a better outlook for troubled borrowers. This day commenced that lenders would have a new, more benign way to report loan modifications sponsored by the government.” Through the guidelines of the Consumer Data Industry Association, lenders should report the loan modifications as “loan modified under a federal government plan, said spokesperson Norm Magnuson for the said group representing credit bureaus.

“Once there is enough documented performance for people who went through (a federal modification), we will be able to assess the accumulated data to determine how predictive it is. The analysts prefer having at least a year’s worth of performance data before making any changes to its credit-scoring formula,” spokesman Craig Watts for FICO explained.

Magnuson further said that under the association’s guidelines, “If a person is current with his mortgage payments before and during a trial modification period (typically three months), the lender is supposed to report it as current. If the modification is approved after the trial period, the lender adds a comment that it was modified under a federal plan instead of the dreaded partial payment.”

On the other hand, the new designation may still hurt the borrower if FICO decides to treat the modification as a risk factor. But then again, the prospective lender would still see on the applicant’s credit report the worked up loans and then decide for themselves how to treat the information. Magnuson explained that the new guidelines won’t help those whose loans have already been modified, but depending on the lender’s discretion that they could apply the rules retroactively.

JP Morgan Chase & Co. spokesman Tom Kelly said, “We have in the past looked beyond a credit score at someone’s full credit history and we will continue to do that.”

The reporting guidelines are not applicable to loans that have been refinanced, put under forbearance or modified outside government programs. These have another set of reporting guidelines.