Loan Modifications-Fix Your Non-Performing Mortgage
Ok, so the word is out, the doctor is in, and the medicine is... Loan Modifications. Specifically, principal write-downs.
An interesting solution.
The Solution For Negative Equity - Loan Modifications
In July, Congress passed the Hope for Homeowners initiative. It is a FHA insurance package which will insure $300B of new mortgages for home owners in a "negative equity" position.
Negative equity, meaning that most of these properties are worth less than the balance of the loans.
To qualify for the loan modification, the borrowers must have made at least 6 loan payments on time, and they would need a DTI of 31% or less.
So if they qualify, what do these applicants get? (And on a side note, if I had to guess what the average DTI for mortgages approved in 2007, I would say around 40-45%. Not to mentions that most of these loans are non performing mortgages as well.
Loan Modifications - Who Qualifies?
Not that many at all.
When the program first started, it had 49 applicants. None of them were approved.
NonPerforming Mortgages Included In FHA Secure Program
Just as difficult to qualify for, out of 203 applications only 49 borrowers were approved for the FHA Secure program.
In that same time in California, approximately 1,300 homes saw a Notice of Default filing.
If the H4H program needs more time, can't we just wait?
Yes.
But remember that lenders are going to be looking for federal backing for their loan modifications if they're going to be participating in these 90% principal reduction plans. H4H is one of them.
Sure you can wait for the news on H4H along with everyone else, or you can make an offer on the 49 notes that weren't approved.
You can bet that there will be even more non-performing mortgages to buy as well.
An interesting solution.
The Solution For Negative Equity - Loan Modifications
In July, Congress passed the Hope for Homeowners initiative. It is a FHA insurance package which will insure $300B of new mortgages for home owners in a "negative equity" position.
Negative equity, meaning that most of these properties are worth less than the balance of the loans.
To qualify for the loan modification, the borrowers must have made at least 6 loan payments on time, and they would need a DTI of 31% or less.
So if they qualify, what do these applicants get? (And on a side note, if I had to guess what the average DTI for mortgages approved in 2007, I would say around 40-45%. Not to mentions that most of these loans are non performing mortgages as well.
Loan Modifications - Who Qualifies?
Not that many at all.
When the program first started, it had 49 applicants. None of them were approved.
NonPerforming Mortgages Included In FHA Secure Program
Just as difficult to qualify for, out of 203 applications only 49 borrowers were approved for the FHA Secure program.
In that same time in California, approximately 1,300 homes saw a Notice of Default filing.
If the H4H program needs more time, can't we just wait?
Yes.
But remember that lenders are going to be looking for federal backing for their loan modifications if they're going to be participating in these 90% principal reduction plans. H4H is one of them.
Sure you can wait for the news on H4H along with everyone else, or you can make an offer on the 49 notes that weren't approved.
You can bet that there will be even more non-performing mortgages to buy as well.
About the Author:
Want to find out more about the Note Buying Business? We offer Hours of FREE Training Videos here: Loan Modifications Real-life, Up-to-Date Information for You. Visit NoteBuyingProfits.com or Call 718-783-7605 Or Click Here: Non-Performing Mortgages From Dean Engle & NoteBuyingProfits.com - This time on Loan Modifications
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