South Lake Tahoe, CA (PRWEB) February 6, 2009
Leadsnet Inc., has reported that lenders are stepping up their efforts to modify loans by providing principle reductions, interest rate reductions and forgiveness of back payments. Government and enterprise leaders are calling for improved loan modifications and banks are responding. Wells Fargo, Bank of America, Citigroup and government agencies such as the FDIC, Federal Reserve, Fannie Mae and Freddie Mac have all introduced a myriad of applications in response to the economic reality that over five million homes will be at some stage of the foreclosure procedure this year.

“Recent moves by lenders across the board has lead to elevated modifications with favorable terms” says Ted Schmidt. President of Leadsnet Inc., http://www.loanmodificationleads.org a top provider of loan modification leads. “Our customers are reporting that they have observed an increase in successful modifications in recent weeks.” He also mentioned that lead production has elevated as a outcome of greater consumer awareness of loan modification applications. A loan modification “lead” is a consumer initiated request for a consultation. Leadsnet Inc. has over 12,000 consultants and loan officers with active registrations.

Government Programs

The Federal Reserve announced a new “Homeownership Preservation Policy” which is aimed at borrowers who are 60 days or much more behind. This system is for loans that are owned by the Fed in its recent acquisitions of AIG and Bear Stearns. This system utilizes TARP funds which had been released at the finish of January.

Hope For Home owners Loan System

Congress created the HOPE for Property owners (H4H) program to help these who are 90 days or more behind in payments, refinance into much more reasonably priced, long term loans. H4H is an new mortgage designed to keep troubled borrowers in their homes. It is not a loan modification. This plan has been broadly characterized as a failure. The major reason the program did not catch on is that no new lenders want to make loans to borrowers who have a history of not paying and property that is declining in worth. Chairman Bernake in a recent speech acknowledged the applications shortcomings and called for modifications.

FDIC Loan Modification

The FDIC announced a plan late last year that promises to mitigate losses to the government and help individuals remain in their houses. This system contains money incentives to loan servicing companies and government share in potential losses.

To qualify for the system you must have a loan that the FDIC administers and be at least 60 days behind in your mortgage payments ahead of the finish of 2009. This would apply to IndyMac Federal loans.

The FDIC will restructure your payments so that they are no much more than 31% of your income. Interest prices can be set to 3% for 5 years. There is no principal reduction, rather the excess in the “cost-effective” loan balance and actual balance is added on to the loan at the finish or when the residence is sold.

Fannie Mae and Freddie Mac Loan Modification

The Fannie Mae and Freddie Mac plan is for homeowners that are at least 90 days behind in their payments and owe at least 90% of the residences value.

With this program, the government will allow you to have a lower interest price and principal deferment. Debt ratio targets for this system is 38%. This means that your mortgage payment including tax and insurance can not be much more than 38% of your income. You should reside in the property and not be in bankruptcy.

Wells Fargo, mentioned that they will be providing principle reduction in regions that have suffered the greatest market place declines. With their current acquisition of Wachovia, who created some of the most toxic “choose-a-payment and NINJA loans (No Income No Job No Assets) they join Bank of America who recently settled a multi-billion dollar law suit as a result of its obtain of Countrywide, who was the nations largest lender in the course of the bubble years.

Consumers must be vigilant in negotiations with lenders. It is very best to get third party representation from an attorney, CPA or licensed mortgage broker that can negotiate on your behalf. If you can not afford professional representation, there are a lot of certified FHA neighborhood housing counselors that offer the service for totally free. Consumers can go to the Leadsnet inc. customer portal at http://www.loanfix.us for a totally free loan modification consultation.

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