Many homeowners have experienced difficulties and frustration getting through to their loan servicer when trying to obtain a loan modification. To help alleviate some of the stress associated with this task, an attorney with the National Consumer Law Center in Boston is offering the following tips:

· Consumers should keep detailed written records of every contact they have with their servicer, including logs of phone calls and copies of written correspondence.

· If the servicer makes a promise, such as crediting a payment, modifying the loan, or stopping a foreclosure sale, for example, the homeowner must get it in writing.

· When seeking a loan modification, consumers should send a request in writing asking the servicer who owns the mortgage loan. Some banks and investors have policies on which loans they will modify.

· Consumers should beware of servicers advising them to stop making payments because they have applied for a loan modification. Instead, homeowners should continue making payments for as long as possible, even if they cannot make the payment in full. Otherwise, the loan will accrue more interest, and will cost more in the long run.

· Borrowers who feel they cannot resolve their problem or those who think their servicer may be violating their rights are advised to contact a non-profit housing counselor or seek legal help. Housing counselors can help negotiate a loan modification for free.

· Consumers can visit the Treasury’s homeowners Web site www.makinghomeaffordable.gov to find out if they qualify for a loan modification under the Obama administration’s program Making Home Affordable.

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C.A.R. launches mortgage protection plan for first-time home buyers
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today launched the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP), for first-time home buyers.

Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

C.A.R.’s Housing Affordability Fund is dedicating $1 million toward its Mortgage Protection Program, and estimates that as many as 3,000 families will benefit from the program this year.

To qualify for the Mortgage Protection Program, applicants must:

· Be a first-time home buyer – someone who has not owned a home in three

or more years

· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009

· Use a California REALTOR® in the transaction

· Purchase the property in California

· Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

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Break down of President Obama’s Mortgage Relief Plan effective as of March 04, 2009:

1.  $4-5M Freddie Mac&Fannie Mae loan holders :

-Refinance at lower rates
-Borrowers with higher loan rates that may be underwater can refinance

2. Lenders work with borrowers to modify terms of sub-prime loans that are at risk of default and foreclosure:

-Establish clear guidelines for mortgage industry that will encourage lenders to modify mortgages on primary residences.
-Reduced payments must be no more than 31% of homeowner’s income

3.  Keeping mortgage rates low for millions of middle-class families looking to secure new mortgages:

-Treasury and Federal Reserve will to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity.
-Treasury will provide up to $200 billion in capital to ensuring Fannie Mae and Freddie Mac to continue to stabilize markets and hold mortgage rates down.

4. Wide range of reforms to help families stay in home:

-Judges can reduce home mortgages on primary residences to their fair market value, as long as borrowers pay their debts accordingly.
-Award $2 billion in competitive grants to communities bringing people together and testing new and innovative ways to prevent foreclosures.

Restrictions of Obama’s homeowner affordability and stability plan:

-Loans must be from on or before January 1, 2009, and can be modified through December 31, 2012 only once.
-First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750 for a conforming loan. -Borrowers must fully document income, two most recent pay stubs, most recent tax return, and sign an affidavit of financial hardship.

How it works:

-Three step relief plan for qualifying home owners:

1. Reduce the interest rate (rate floor of 2%).
2. Extend the term or amortization of the loan up to a maximum of 40 years, if necessary.
3. Forbearing principal (principal forgiveness or a Hope for Homeowners refinancing are acceptable alternatives), if necessary.

-Loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent.

-Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income; monthly payment includes principal, interest, taxes, insurance, flood insurance, HOA fees.

-Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years who make their payments on time.

The administration also has created the new Making Home Affordable page.  In this section, the administration talks directly to consumers and offers advice to the 7-9 million homeowners who may be eligible for mortgage assistance.  The site offers great self-assessment tools to answer the question whether or not you qualify for  mortgage relief.

A  new phone number has been announced for homeowers needing urgent assistance – the Homeowner’s HOPE Hotline for urgent help at (888) 995-HOPE.  More details are available at www.financialstability.gov.

Call us toll free at 866-495-3566 to obain more information.

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Many homeowners wonder how they can lower their mortgage that reflects current market conditions.  A Short Refinance is the solution.  A Short Refinance is simply as follows, straight from the guidelines:

The Short Pay Refinance is similar to a Short Sale with one major exception; the homeowner keeps their home! It is the same processes, along with the techniques used while negotiating a Short Sale or Loan Modification. Your broker will negotiate a settlement for a reduction of the principal loan balance on the current note. Once an acceptable settlement is reached a new loan is completed for the homeowner (thus the refinance portion of Short Pay Refinance.)

Both parties benefit from a Short Refinance; the homeowner reduced the principal amount owed (generally 95-97% of the current market value) as well as lower payments; the current lien holder actually nets an average of 10% more than they would with a Foreclosure or Short Sale so it is in their best interest to work out a settlement.

If you need help with your loan, we will gladly help you out. Call us at 1-866-495-3566 to get more information. Our friendly and experienced staff are waiting.

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This week, mortgage rates continued to fall, indicating a drought in consumer spending, and the immense job losses nationwide.

According to Frank Nothaft from Freddie Mac, vice president and chief economist, the economy shrank by 0.3 percent in the third quarter.

Having the economy experiencing massive job losses, foreclosures, bankruptcies and financial distress, lenders have tightened their credit standards even further.

The Federal Reserve Senior Loan Officer survey from October states that about 70 percent of the banks raised their prime mortgage lending standards, and about 90 percent of the banks offering nontraditional mortgages also did the same.

With the economy in turmoil, it is crucial for consumers and homeowners to be wiser with their spendings for months to come. Even keeping their credits in good shape is important when economy does turn around. If your credit is shot, chances of getting a loan or a refinance are slim to none. You don’t want to miss out on opportunities.

Hang in there. This economy will turn around eventually. It’s just a matter of riding out the difficult times cautiously and keeping your eye out for that light at the end of the tunnel.

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