In the past, if you “almost” lost a home to foreclosure, eg, did a short sale, did a deed in lieu of foreclosure, etc., you had to wait four to five years in order to qualify — under Fannie Mae guidelines — to buy another one. Well that’s no longer the case. Now, you can qualify in as little as two years.

According to the New York Times article, Fannie Mae wants to help some troubled borrowers get back into home market, the organization sent out a  a bulletin to lenders dated April 14 stating:

. .  . it is relaxing rules that prevented loan applicants who have participated in short sales or deeds in lieu of foreclosure from obtaining a new mortgage for extended periods of time. The new rules are scheduled to take effect July 1.

Is This Rule Change in Home Loan Qualifications a Slippery Slope into More Home Foreclosures?

Apparently not.

While Fannie is not making homeowners who’ve had trouble with home ownership in the past wait as long, they have tighted qualifying guidelines. For example, instead of a 3 or 5% down payment like in the past. Now the down payment has to be significantly more — 20 percent.

Home Loan Qualification Under Fannie Mae: Down Payment Determines How Long You Have to Wait

If a prospective borrowner can’t come up with that much, they’ll have to wait longer. How long depends on how much of a down payment they have, eg:

10% — wait 4 years, UNLESS applicant can prove that the loss of a previous home was due to extenuating circumstances (eg, loss of job, medical bills, etc.);

Less than 10% - could be longer than four years.

While losing a home you want is always hard, it’s not the end of the world. It is possible to recover, mortgage giants  like Fannie Mae are assisting in that recovery.

P.S.: Start a Business Cleaning Foreclosed Properties. While the foreclosure crisis has been a nightmare for many, it has presented a perfect small business opportunity for others. Learn how to start a foreclosure clean up business. Read how one foreclosure cleaning business owner rakes in $40,000/wk (not a typo).

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

The loan modification process can be frustrating and confusing for many distressed homeowners. If you are considering contacting your lender about a loan workout to avoid foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light.

Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need. To help you understand how the process works and what you can expect, here are the Top 10 Questions and Answers.

Home Loan Modification: Frequently Asked Questions/Answers

1. What exactly is a loan modification? A loan modification is a permanent change in one or more terms of a borrower’s home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford.

2. Can the lender include late charges in the Loan Modification? The federal plan mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.

3. How will the new government programs help me get a loan modification? The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients.

Now, the banks will have a monetary incentive to offer help to qualified borrowers. In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.

4. How do I know if I will qualify for a loan modification? The number 1 criteria your lender is looking at is your ability to make the new modified payment now and in the future.

You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment. You must also be able to demonstrate that you are facing a financial hardship-lower income or higher expenses for example.

5. Do I have to be currently delinquent on my payments to get a loan modification? President Obama has included a special incentive under the Home Affordable Modification Plan that will pay lenders an extra bonus for reaching out to homeowners not yet delinquent but at risk in the future. The goal is to help borrowers before they fall into default.

6. What is an acceptable Hardship situation? Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification.

A compelling hardship letter included in your application is a very important part of a successful application.

7. Will a loan modification help me stop foreclosure? Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted.

8. Can my missed payments be added back into my new loan modification? Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.

9. Can I do a loan modification myself or should I pay someone to represent me? That is entirely up to you and your comfort level with dealing with your lender.

The Treasury Department is strongly discouraging the payment of any fee to a third party to represent you in a loan workout. Regardless of what you decide, the first thing you should do is learn all you can about the process, your legal rights, and what it takes to get your application approved. An informed homeowner is harder to take advantage of and will have a much greater chance of success.

10. So how do I get started to modify my loan? Before contacting your bank’s loss mitigation department or a loan mod company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.

President Obama’s Home Affordable Modification Plan offers real hope for millions of homeowners who need a solution to stay in their home. Not everyone will qualify however, and interested borrowers will have to complete loan modification application forms, provide proof of their income and meet certain eligibility requirements.

Most lenders are participating in this new government subsidized plan, and homeowners are encouraged to learn how they can qualify and apply for a loan workout and avoid foreclosure.

You can get the help you need to apply and qualify for a loan modification by ordering and downloading the best selling handbook for homeowners, The Complete Loan Modification Guide.

This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender.

Learn how to apply and qualify for the Obama federal program too. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

About the Author: For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com. Article Source: http://EzineArticles.com/?expert=Susan_V._Gregory

P.S.: You Can Save Hundreds of Dollars — Or More — Per Month on Your Mortgage:  There are homeowners just like you who have saved thousands of dollars in loan modification fees. And, they’ve lowered their mortgage payments by hundreds — and in some cases over a thousand dollars — a month. Get the details in this home loan modification kit.

P.P.S.: Found this post informative? Follow Foreclosure Business News on Twitter.

Because of the foreclosure crisis we’re going through, new credit standards for purchasing homes have been put into place. Depending on which side of the fence you’re on, it’s either a good thing, or a hindrance to buying a home.

Here we’re going to look at the FICO score. Following is a look back at what FICO scores used to have to be to qualify, and what they need to be now.

First-Time Home Buyer Mortgage Qualifications: A Look Back at Old FICO Standards

On a recent news cast, the announcer blared from the screen that some credit card issuers were looking at making 740 the FICO score you needed to qualify for a credit card. It used to be that if you took a breath, you could get a credit card. Even pets could get credit cards (this is how free willing credit card companies were when extending credit).

So, what does this have to do with getting a mortgage? Well, who extends credit for credit cards? Banks.

And, who extends credit (loans) for mortgages? Banks.

Zero Down Home Loans: Get 100% Financing with a 580 or 620 FICO Score?

FICO scores have to be a lot higher than they used to be to qualify for a home loan. When I was a mortgage consultant, a prospective homeowner could qualify for 100% financing and a conventional mortgage with a 620 FICO score in most cases.

In a lot of cases, a prospective homeowner could qualify for 100% with a 580 FICO score — it would be subprime, but they wouldn’t have had to come to the table with any money nonetheless.

The New Reality: What Your FICO Score Need to Be to Buy a Home Nowadays

Now, banks have raised the bar on what your FICO score has to be to get the best interest rate . . . and it ain’t what you’ll read when you go online. Most sites still have it at 620 to 640. It’s not.

Many mortgage lenders now – whether they’re on the record or not – want you to have scores of 750- 780 to qualify for the best interest rates on conventional mortgages.

Refinancing a Mortgage: 720 Not Good Enough

As the editor of this site, I get a lot of insight from readers and from friends and acquaintances alike.

One friend of mine went to refinance his mortgage. He’d recently come back from being deployed, had paid off some bills and thought it would be easy for him to refinance. After all, his credit score was a 720, he’d been on his job for 13 years and had been in his home for more than five years.

But, even with all of this, he was unable to refinance.

I think a lot of banks are scared of where the market is right now – and how long it’s going to take it to recover.

Home Loan: How Much of a Down Payment Do I Need to Qualify for a Mortgage?

More Mortgage Questions Answered: In a future post here, we’ll look at what banks expect in the way of down payment nowadays.

Got Bad Credit: Learn How to Repair Your Credit So You Can be “Mortgage Ready”

Before you can fix your credit, the first thing you need to do is understand what it is and how lenders use it. Repairing your credit is like being part of some special club. You have to gain access to the rules of the “credit repair game” in order to be able to “compete” and clean up bad credit.

Learn the credit repair rules that banks play by so you can qualify for a home loan to purchase the home of your dreams.

First-time Home Buyer Loans: Need Down Payment Assistance to Qualify for a Mortgage? Get details on this in the video below.


P.S.: Business Opportunity: Learn How to Start a Foreclosure Cleanup Business. Read how one foreclosure cleaning biz owner makes up to $40,000/wk.

A common fear for homeowners facing foreclosure is that their wages will be garnished. This can cause added stress because these are already difficult financial times. Following is some info that may allay your fears as you go through this difficult process.

And the answer is . . .

No, as you go through the home foreclosure process, your wages cannot be garnished. The legalities behind this is that the home itself is pledged as the collateral for the loan (mortgage) – not your wages or any other property. So while you’re in foreclosure, your wages are safe from garnishment.

But, you’re not out of the woods.

What will happen moving forward if you are not able to become current with your mortgage is that your home will be sold. You have several options here. One of the most common is the deed in lieu of foreclosure.

Home Foreclosure: What is a Deed in Lieu of Foreclosure?

 It’s when the you (the home owner) signs over all rights to the home back to the lender — in lieu of allowing them to foreclose on the property. You can do a deed in lieu with recourse, or without recourse. You could be held responsible for the balance (deed in lieu with recourse), depending on what you work out with your bank/lender.

What you want to get from your lender in these circumstances is an agreement for a deed in lieu without recourse. This means the lender can’t come after you for any balance due.

Yes, your credit will suffer if you proceed with this option (with or without recourse). But at this point, who cares. Your credit is probably already in the dumps anyway.

Back to your wages being garnished . . .

Wage Garnishment & Home Foreclosure: Your Rights When Dealing with Creditors

Many unscrupulous lenders will use the threat of wage garnishment to try to bully you into continuing to make mortgage payments – even when you can’t afford it. Don’t fall for it.

And by the way, this tactic is patently illegal.

Bone up on your consumer rights when it comes to debt repayment. They vary from state to state. But across the board, creditors can’t bully you, lie to you or threaten you on any level. Remember this fact when dealing with creditors – whether you’re discussing wage garnishment during the foreclosure process, credit card debt or any other kind of debt.

Live Rent Free!

P.S.: Business Opportunity: Learn How to Start a Foreclosure Cleanup Business. Read how one foreclosure cleaning biz owner makes up to $40,000/wk.

Learn more about foreclosures, deed in lieu of foreclosure and wage garnishments in the video below.

Copyright © 2009 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Baltimore is suing Wells Fargo bank, contending that their lending practices during the height of the real estate boom has led to what is now a wave of foreclosures in communities throughout their cities. The New York Times article, Baltimore Is Suing Bank Over Foreclosure Crisis, states the case this way:

Baltimore’s mayor and City Council are suing Wells Fargo Bank, contending that its lending practices discriminated against black borrowers and led to a wave of foreclosures that has reduced city tax revenues and increased its costs.

Foreclosure Crisis: Banks Being Sued by Cities

As the foreclosure crisis continues and more and more cities grapple with declining tax revenues, the most obvious question is will other cities follow suit (pun fully intended)? And, if they do, who will pay? Banks are failing and/or being bailed out by the government every day. Will taxpayers once again be on the hook as cities struggle to stabilize neighborhoods racked by foreclosures?

What do you think?

Copyright © 2009: Foreclosure Business News

Desperate homeowners in some states may soon be able to get relief from bankruptcy judges to help stop foreclosure. How?

Bankruptcy Legislation May Help Stop Foreclosure

If you are under water on your house (ie, owe more on it that it will sell for), bankruptcy judges will be able to use legislation [the Helping Families Save Their Homes in Bankruptcy Act of 2009] specifically devised to stop foreclousres to write down mortgage debit. The Miami Herald article, Miami Judge Supports Bankruptcy Legislation Helping Homeowners, explains it this way:

A key component of President Barack Obama’s plan to curb the rising tide of foreclosures is to give bankruptcy judges the power to write down mortgage debt for people in bankruptcy court. It’s known in bankruptcy as a “cram down.”

Stop foreclosure through bankruptcy? To read an Q and A with a bankrupcty judge on how the process would work if the legislation passes, read Miami Judge Supports Bankruptcy Legislation Helping Homeowners.

Copyright © 2009: Foreclosure Business News

It seems that not only are homeowners walking away from homes they can no longer afford, banks are too. While it’s not widely publicized, it is happening. And, it’s leaving a lot of homeowners and neighborhoods stuck with the fallout of community blight, crime and other problems common to foreclosure homes.

Bank Walkaways: When Banks Walk Away from Foreclosed Properties

Why are banks walking away from many foreclosure properties? The New York Times article, Banks Starting to Walk Away on Foreclosures, explains, stating:

Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate. . . . The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches.

Bank Walkaways Leave Homeowners on the Hook

As the article states, many homeowners who are foreclosed on are frustrated at this process because it still leaves them on the hook for the property. Many wonder why they were foreclosed on in the first place if they are to be left holding the bag when the banks walk away.

Bank Walkaways: Problems Caused

In addition to homeowner frustration, when banks walk away from foreclosed properties, they caused a myriad of problems, eg:

Property maintenance: As in who’s responsible for keeping up the property until it can be cleaned, cleared, repaired and/or demolished.

Vandalism: When foreclosure homes for sale dot the landscape, it invites crime, vandalism, graffiti, and a host of other problems for residents left behind.

Declining Property Values: Because of the above, the homeowners left behind face declining property values. This is particularly acute because when there’s no verifiable owner/lender to hold responsible for the property, the longer it sits. The longer a home sits empty, the more likely crime is to follow.

What’s the solution?

Foreclosure Cleaning Companies: A Good Start in Preventing Crime on Foreclosed Properties

One of the first things that need to be done when a foreclosed property falls in limbo like this is to get it properly cleaned and secured. This means boarding up windows and doors, maintaining the lawn, and removing junk and debris. A full-service foreclosure cleanup company can do all of this.

Copyright © 2009: Foreclosure Business News

Old-world standards are back in vogue for mortgage lenders, as discussed in the 3/15/09 LA Times article, Lending standards are back, and borrowers should know them.

The days of exotic loans that made things like 0% down payment and easy no-doc qualifications are over. Home loan lenders are back to the grind –  looking at things like income, savings patterns, amount of down payment and income documentation — all of which makes it harder for many to qualify for home loans.

But, given the bloodbath that the mortgage crisis has caused over the last few years, can anyon really be surprised. However, what does this mean for the overall housing industry in the short term? Four things primarily:

The Foreclosure Crisis & Tougher Lending Standards: 4 Things It Means for the Housing Market & Home Buyers

Good Credit Rocks! If you have good credit, a stable job and some savings, you are in a better position than ever to capitalize on the mess that is the foreclosure crisis.

Houses Sit Longer: As it’s more difficult than ever to get a mortgage, this means — in the short term — that houses will sit on the market longer.

Housing Market Stabilization: Once we all get used to the “new” (old) mortgage standards, it will stabilize the housing market because it means only those who are truly qualified (eg, job stabilization, good credit, come with down payments, etc.) will be buying homes.

Lock Out Many Would-Be Homeowners: Unfortunately, what this also means is that many would-be homeowners may never own a home — or, it may take years as they clean up bad credit, save a down payment, establish a healthy savings pattern, stabilize their employment history, etc.

But really, is this a bad thing?

Copyright © 2009: Foreclosure Business News

As the foreclosure crisis deepens and more and more homes stay unoccupied for longer periods of time, municipalities, city officials and HOAs are starting to hold lenders — who the properties revert to when it is foreclosed on — responsible for the upkeep and maintenance until they can be resold or rented. They are doing this because, as the Newsweek article Dirty Deeds cites:

Orphaned properties quickly fall into disrepair, the deterioration sometimes hastened by vandals who trash the interiors, lighting fires and ripping out wiring and pipes to sell for scrap. Squatters or drug dealers may move in. . . . The impact goes far beyond the defaulting homeowner, as neighbors and entire communities confront a spreading blight.  

Eventually, whoever takes over the property oftentimes call a foreclosure cleaning or junk hauling company to clean up the property and get it ready for market (ie, to be sold or rented) again.