- How to Find Cheaper Closing Costs on your Mortgage
- Obama Extends the HARP Refinance Program for 2013
- IRS Supplies Guidance on Home loan Modifications
- Indiana State Mortgage Help for Those in Danger of Foreclosure
- Mortgage Assistance Available in Oregon
- Wisconsin Mortgage Assistance Programs
- How to Write the Mortgage Hardship Letter
- CHFA EMAP Program for Homeowners
- How to Request a HSBC Loan Modification
- Florida State Mortgage Help-So You Can Stay in Your Home
An Americans Guide to the 2013 Government Mortgage Assistance Payments and Help Programs
If you are Late on your mortgage, there may be a program that can help you keep your home. See if you qualify for the U.S. Loan Modification Plan now, If you are late on your mortgage please Fill out the Form Below.
The recession has caused the government to pass a lot of spending bills in this year of 2010. The intent of the bills is to help people who own homes avoid foreclosure. If you’re a homeowner, you should know about the government programs that will assist you with your mortgage.
The government programs were announced in February of 2009 and are part of the Homeowner Affordability and Stability Plan. This plan is complicated and can be difficult to understand. The reason is because there has been a lot of press conference, there are many programs that sound the same, and there are a lot of cryptic acronyms.
To help you make sense of it all, we have put together this helpful article which will explain the mortgage assistance programs. You can see if you’re eligible for these programs by clicking on the links in this articl. We’ll begin by providing you some background information.
How to Find Cheaper Closing Costs on your Mortgage
One of the more annoying costs about obtaining or refinancing a mortgage is paying closing costs which can be considerable depending on the loan. For many, closing costs are often not initially considered when getting a new or renewed mortgage. Sometimes, closing costs must be paid out of pocket as well.
However, there are ways to reduce your closing costs so that you keep more of your money. It is important to understand what closing costs are, the different types that exist, and how you can find different resources to lower the closing costs for you.
What are Closing Costs?
Closing costs are fees that borrowers pay to the lender and third parties such as insurance and title/escrow companies. There are also optional fees that might be paid as well, such as for mortgage discount points.
Also, there are two different types of closing costs, recurring and non-recurring. The difference is that non-recurring closing costs need only to be paid one time while recurring closing costs must be paid more than once. Many borrowers will have to pay both types of fees depending on a number of circumstances.
Types of Recurring Closing Costs
- HOA Dues
- Property Taxes
- Homeowner’s, Flood and Mortgage Insurance
- Types of Non-recurring Closing Costs
- Lender fees (both underwriting & processing)
- Loan Origination Fee
- Mortgage Discount Points
- Appraisal Fee
- Home Inspection & Termite Fee
- Credit Report Fee
- Building Records Fee
- Title & Escrow Fees
- Document Preparation, Recording & Wire Fee
- Notary & Messenger Fees
- Transfer Taxes
The number of closing fee costs can certainly pile up quickly when obtaining or renewing a mortgage. This means that you will need to consider all of these fees in order to know where you can save money and keep more cash in your pocket. What follows are a number of safe, legal strategies that can help you save more money on closing costs.
Traditional Tips for Reducing Closing Costs
If you are obtaining the mortgage for a new home, you can help reduce your out of pocket expenses by getting contributions from the seller. This is actually one of the most common means of reducing closing costs.
During the negotiation to purchase the home, you can ask to include part of the closings costs as part of the deal. While this will generally lead to a higher price for the home, which is the part you pay, it can offset much of the closing cost expenses as well. Essentially, this means that you get a higher loan from the mortgage company and use part of that to pay the closing costs. For buyers who are short on cash, this is a common method to reducing closing costs.
Another way to help eliminate closing costs is working with the lender. In essence, you negotiate a higher mortgage rate in return for a lower settlement or closing costs. This method is commonly used for refinancing a mortgage, but it can be used for new ones as well.
In essence, the rate that you negotiate is often a fraction of a percentage which adds a little to your loan, but the extra money is used to offset the closing costs. For example, instead of taking a loan of 4.5%, you take one of 4.75% which gives credit back to you and covers part or all of the closing costs. Essentially, this is a tradeoff as you are paying slightly higher prices each month on your loan, but the effect is to reduce any out of pocket costs.
The Real Estate Agent
Another simple, yet effective method is to simply ask the real estate agent to provide credit towards the closing costs that are incurred. Of course, they can always say no, but it never hurts to ask and if they need your business, they just might use part of their commission to help pay off the closing costs in return for making the sale.
In this manner, since the money is coming from the real estate agent’s commission, you do not have to take out a higher loan or negotiate a higher price for the home. This is another, highly popular way to help reduce closing costs.
Of course, you can combine different credits from the seller, lender and the real estate agent. Just remember that you should not exceed the maximum allowable by the lender. If you find yourself with an excess of money after paying your closing costs, then it is best to use this to reduce the overall rate.
Other Methods to Reduce Closing Costs
Remember that you can shop around to find the best lending companies that will reduce your closing costs. You can comparison shop for title insurance or homeowner’s insurance and even home inspectors to find the best deal. You can check out the different fees that banks and lenders charge to find the best rates. A little extra footwork can lead to you saving hundreds of dollars or more.
You can also use Prepaid Interest, the per diem interest that is due between the time you close on the mortgage and your first payment. If you can reduce the number of days between the per diem due at closing, then you can reduce your closing costs significantly. This is somewhat tricky as lenders may not close in time for that to take place.
If you are refinancing your mortgage, you can try to roll the closing cost into your new loan which is a common practice, especially if what you get back is considerable and you plan to sell your home in the near future.
You’ll want to check on all other options as well, there are a considerable number of sources that you can use to find ways in reducing closing costs. There are special programs, outside assistance and the like. It pays to take the time to look around first before making any commitments to find the right deal or set of deals that result in lowering your closing costs.
Home Affordable Refinance Program Extended
The Obama Refinancing Program: or HARP Refinance
The government’s Residence Affordable Refinancing Program (HARP) was scheduled to expire at the end of Apr – until last full week. The Obama administration’s program to aid upside down borrowers, who are present-day with their mortgage loan payments, re-finance at lower interest rates was extended an additional two years last full week. Regulators introduced last Thursday, April 11th, that HARP will probably now run till 2015, providing additional relief to homeowners.
The HARP refinancing program was developed for property owners who must pay back more on their house than it is valued at due to dropping real estate rates to be able to take advantage of lower rates of interest and refinancing. Highlights and some common lender recommendations on the HARP / Obama refinancing program include:
Here I will discuss the conditions borrowers have got to meet to be able to take advantage for the HARP extension:
1. Fannie Mae or Freddie Mac needs to have sold the mortgage loan to a borrower no later than May 31, last year.
2. Borrowers who already took advantage of HARP to refinance can’t do so again unless Fannie Mae refinanced their prior HARP loans between March 1st and Could 31, ’09.
3. Borrowers should must pay back more than eighty percent for the existing worth of the house.
4. Borrowers are unable to have missed any mortgage loan payments for the last 6 months and has to have a history of on-time payments, with the exception of one late disbursement by no more than 30 days within the last year.
Who Owns Your Bank loan?
For you to be suitable for the Obama remortgage / HARP program, your mortgage loan needs to be financed by Fannie Mae or Freddie Mac. Both have tools on his or her websites to see if they own your loan. To see if either one holds your property finance loan, you can inspect Fannie Mae. If they don’t have your home loan there, then check out Freddie Mac.
Even though the government and lending institutions are usually at opposite sides of the table when it comes to decision-making about regulatory issues and programs that assist borrowers, the good news about the extension of HARP is that both the government and the industry are on the same web page. Fannie Mae and Freddie Mac are ultimately responsible for losses on home loan defaults, so their financial risk decreases when borrowers have ways to prevent go into default and better manage their payments. In the following way, everyone is aligned; borrowers, regulators, and lenders are motivated to make refinancing, at today’s relatively reduced house loan rate, a reality.
Around 2.2 million property owners have refinanced using the 4-year-old HARP, and borrower advocates are extremely happy with the extension. Quicken Loans, an on the web financial institution, estimates that 2.7 million property owners are upside down and remain entitled for HARP loans. The online loan provider also claims that the typical savings from re-financing through HARP is about $200 per thirty day period with a home finance loan rate decrease in approximately 1.75%.
Obama Re-finance: How To Save MoneyThe single best way to save money when thinking about contributing in the Obama refinancing program is to shop multiple financial institutions. Shopping multiple loan providers may ensure that you have the best possibility to acquire the best rate and lender service fees and close your mortgage in the shortest possible timeframe. If you shop around, you may be surprised at exactly how much dollars you could save from one loan company to the next. Just a number of for the bigger loan providers who may give you a quote include Bank of The states, Wells Fargo and virtually any quantity of smaller loan providers who may also aid you with the HARP program.
Most loan companies may require that for you to do a HARP refinancing, you will need to benefit from it in one of many following ways:
* Cut in the monthly principal and interest disbursement
* Reduction in the rate of interest
* Reduction in the amortization term
* Move to a more stable product, e.g. Adjustable rate mortgage to Fixed-Rate
Mortgage Modifications are a change to a bank loan contract between the loan provider and the property owner. The whole purpose is to adjust the terms of the contract so that the mortgage is affordable for the borrower. Bank loan Modifications have changed in the last couple years due to the housing crisis. Previously they existed only in the form of an interest rate reduction for a period of time when a delinquent borrower was suffering from a specific type of hardship, as a divorce, illness or a work loss. Now bank loan adjustments are provided for a wider set of situations and normally change the terms of the mortgage permanently.
A key factor that makes a house owner qualified for a mortgage loan modification is the existence of a valid hardship. A borrower must make sure they could prove the hardship and that it is approved for these individuals to apply for a modification.
These are examples of hardship that give you a good probability of getting approved: Arms, adjustable rate Home loan reset payment shock, illness of a close family member dependent on you, loss of work (as long as there is proof you will probably manage to meet the altered payments), reduced earnings, death for the borrower , death of spouse or co-borrower, military duty, medical bills, damage to your residence, not being able to sell or rent the house.
These 3 points are the keys to a of successful mortgage adjustments:
a) It’s essential to manage to pay for the payments of a reasonable home loan modification.
b) You will need to be experiencing some kind of valid hardship.
c) You have to manage to prove it.
This does have tax consequences
The Internal Revenue Service is offering guidance on property finance loan principal reductions in the federal government’s program for property finance loan alterations for borrowers who have fallen behind on their payments.
The guidance in Revenue Procedure 2013-16 is designed to help borrowers, mortgage loan home loan holders and home loan servicers that are contributing in the Principal Reduction Alternative offered by means of the Treasury Department’s and Department of Housing and Urban Development’s House Affordable Modification Program, also known as HAMP-PRA.
To guidance financially distressed house owners lower their monthly mortgage payments, the Treasury Department and Department of Housing and Urban Development developed HAMP, which is described at www.makinghomeaffordable.gov. Below HAMP-PRA, the principal for the borrower’s mortgage loan may be reduced by a predetermined total called the PRA Forbearance Total if the borrower satisfies certain conditions during a trial time period. The principal reduction occurs more than several years.
Less than this program, should the mortgage is in good standing on the 1st, second and third gross annual anniversaries on the effective date for the trial time frame, the mortgage loan servicing company cuts down the unpaid principal balance due for the mortgage loan by one-third of the initial PRA Forbearance Total amount on each anniversary date.
The following means that should the borrower continues to make timely payments on the home loan for three years, the entire PRA Forbearance Total is forgiven. To encourage mortgage mortgage loan holders to participate in HAMP-PRA, the HAMP program administrator may make an incentive compensation to the home loan holder, known as a PRA investor incentive disbursement, for each of the 3 years in which the bank loan principal debt is lowered.
The guidance issued Thursday night by the IRS offers that PRA investor incentive payments made by the HAMP program administrator to house loan loan holders are treated as payments on the mortgage loans by the United States federal government on behalf for the borrowers. These payments are normally not taxable to the borrowers under the general welfare doctrine.
In the event the principal amount of a property finance loan home loan is lowered by an total that exceeds the overall amount for the PRA investor incentive payments made to the property finance loan home loan holder, the borrower might be required to include the excess amount in gross earnings as income in the discharge of indebtedness. However, many borrowers could are eligible for an exclusion from gross income.
For instance, a borrower might be eligible to exclude the discharge of indebtedness income from gross income if (1) the discharge of indebtedness occurs (in other words, the mortgage loan is changed) prior to Jan. 1, 2014, and the house loan mortgage is qualified principal address indebtedness, or (2) the discharge of indebtedness occurs when the borrower is insolvent. To get more exclusions that might apply, see Publication 4681, Canceled Debts, Real estate foreclosures, Repossessions, and Abandonments (for Individuals).
Borrowers receiving assist less than the HAMP-PRA program could document just about any discharge of indebtedness income-whether it is included in, or excluded from, gross income-either in the yr on the permanent modification for the house loan home loan or ratably greater than the 3 years in which the home loan home loan principal is lowered on the servicer’s books. Borrowers who exclude the discharge of indebtedness earnings should report both the total amount for the income and any kind of resulting lowering of basis or tax attributes on Form 982 Decrease in Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).
The guidance issued Thursday explains that home finance loan mortgage loan holders are needed to apply a Form 1099-C with respect to a borrower who realizes discharge of indebtedness income of $600 or more for the yr in which the permanent modification on the home finance loan mortgage occurs. This kind of rule applies regardless of when the borrower chooses to document the income (that is, in the yr for the permanent modification or one-third each year to be the home loan loan principal is reduced) and irrespective of whether the borrower excludes some or all for the total amount from gross income.
Penalty relief is provided for home finance loan home loan holders that fail to file and furnish the requested Forms 1099-C on a timely basis, as long as certain requirements described in the guidance are satisfied.
It’s no secret to anyone that the United States has been facing a serious economic crisis for the last several years, which has negatively affected everything from overseas trade to local job loss and nationwide reductions in wages. Many families are literally struggling to meet their basic needs, and Oregon has been hit especially hard by the recession. Oregon homeowners who are facing foreclosure may qualify for assistance through a variety of different state and national programs, including the Oregon Homeownership Stabilization Program (OHSI), Home Affordable Modification Program (HAMP), The Home Affordable Refinance Program (HARP), and The Foreclosure Avoidance Mediation Program, as well as several others.
Wisconsin Mortgage Assistance Program
Writing the ‘Hardship Letter’
One of the items your Bank or lender will require from you during the loan modification process is a hardship letter. A hardship letter is typically a written reason as to what happened that has caused you to fall behind on your mortgage and it is a key item in helping you stop foreclosure or modify your mortgage agreement.
This letter acts much like an outline or biography of your current issues that are affecting your ability to meet your financial obligations, and by this we mean not being able to afford your mortgage. Lenders do look for what is known as a hardship letter when a borrower applies for a loan modification. Such a letter is a requirement for modification applications under the government’s Making Home Affordable program.
A hardship letter is not the basis for modification approval that depends on the borrower’s financial situation and the red tape of the various government and Bank programs. Rather, the purpose of the hardship letter is to explain upfront, in simple language, why borrowers missed payments, and what they propose as a solution.
less is more when it comes to writing a hardship letter,giving them exactly what they need and nothing more
The lenders’ loss mitigators, faced with mountains of modification requests, are unlikely to spend time reading more than the first few lines of each letter.
And there is always the risk that borrowers who go on at length could unknowingly trip themselves up with unnecessary details that raise red flags for a mitigator.
When the housing bubble burst, home values dropped, and millions of homeowners who did the right and responsible thing—shopped for a home, secured a mortgage, and made their payments on time each month—were left with houses worth less than they paid for them and mortgages worth more than their homes. Today, many of these homeowners are locked out of refinancing because they are underwater.
The hardship letter should open with a succinct explanation of why the borrower stopped paying the mortgage. The letter should cite a reasonable specific hardship, like a lost job, illness or reduced income.
Next, the letter should briefly cite any steps the borrowers took to avoid defaulting on their loan, like cutting household expenses or tapping into savings.
If their financial situation has since improved, or is likely to, borrowers should mention that as evidence that their hardship was temporary and won’t hamper their ability to make payments on a modified loan.
Finally, the letter should state exactly what borrowers are applying for. Is their proposed solution a lower interest rate, for example, or a principal reduction?
Borrowers who are underwater that is, owe more on their mortgage than their property is worth may ask their lender to consider a short sale, in which the house is sold to another buyer for less than the amount owed. Its widely advised that homeowners considering a short sale apply to the bank before putting their house on the market.
The fact that a home has lost considerable value should not be cited as the sole hardship. The borrower might include that information in the hardship letter, but he or she must also explain the inability to pay the mortgage
In the case of a short sale, the hardship might be the borrower’s need to sell right away because of a job transfer or long-awaited employment opportunity elsewhere.
One of the items your lender or servicer will ask for during the loan modification process is a hardship letter. A hardship letter is a written explanation as to what “event” has caused you to fall behind on your mortgage and it vital in helping you stop foreclosure.
This letter acts much like an outline or biography of your current “life” issues that are affecting your ability to meet your financial obligations.
The CHFA EMAP Program for Homeowners in Difficult Situations
The Connecticut Housing Finance Authority (CHFA) has established a number of programs to assist citizens in danger of losing their home during these tough economic times. Mortgage assistance loans, free counseling services and innovative refinance opportunities are offered. If you are in danger of losing your home, look into one or more of these programs to see if they are right for you.
Foreclosure Prevention Counseling-This type of counseling is available for those possibly facing foreclosure. A counselor works with the homeowner and lender to find a solution both parties can agree on.
Connecticut Fair Alternative Mortgage Lending Initiative and Education Programs-Many families qualify for a lower-interest, fixed-rate loan under this refinancing program. Families facing a financial hardship that was unexpected may qualify.
The Emergency Mortgage Assistance Program-This program offers temporary monthly mortgage payment assistance for those homeowners facing foreclosure as a result of a financial hardship. These payments are made for up to five years and the EMAP loan is secured using a subordinate, fixed-rate mortgage on the property. These loans must be repaid and there are limited funds to assist homeowners so the repayment of the EMAP mortgage begins when the homeowner's financial situation improves sufficiently.
To learn more about these programs, contact the Connecticut Housing Finance Authority directly. Important changes have recently been made to the chfa emap program to allow more homeowners to benefit. Homeowners with a mortgage insured by the FHA can now apply for these loans and those who are in danger of foreclosure due to delinquent condominium fees, taxes or assessments may apply. Pension and retirement funds must also be disclosed and certain portions may be retained while still allowing the borrower to apply for the loan.
Who May Apply?
Homeowners facing foreclosure, those who anticipate becoming 60 days delinquent on their mortgage, those who are currently 60 days behind and those who have received a notice of intent to foreclose may apply for chfa emap programs. Certain requirements must be met. The home owners may only have one home and must demonstrate a generally favorable credit history before the financial hardship occurred. In addition, the borrower must be in a situation where he or she can't meet the current mortgage obligation while showing that he or she can make the repayments when they come due.
Mortgages and Types of Property Eligible for These Programs
First and/or second liens may be refinanced using these programs as long as they are on the primary residence. The property must be a single-family, two to four-family home (borrower must be owner-occupant on one unit), condominium or planned unit development. The property may not be used for commercial purposes nor can it be a vacation home, an investment or a rental property.
Restrictions the Homeowner Must Be Aware Of
Eligibility for the EMAP program must be recertified every year and no other loans may be taken out on the property while the homeowner is receiving this assistance. If a pre-existing mortgage is paid off while the assistance is taking place, the homeowner may be required to take the monthly payment which was going toward the now paid off mortgage and apply it to the monthly mortgage amount with is being assisted. If you have previously received assistance under this program, you may reapply if your financial situation changes and you find you need assistance again. Certain conditions must be met.
Those who wish to have more information may contact the Connecticut Housing Finance Authority directly. Here one can learn more about the chfa emap income limit, program eligibility and more. Before taking this step, it is best to contact the lender directly to see if a program is available though the lender as CHFA funds are limited. The lender may be able to assist you through this difficult time and help you to keep your home while doing so.
Requesting a HSBC Loan Modification -Steps Which Must Be Followed
Are you struggling to make your HSBC mortgage each month? If so, programs are available to help. Anyone who has suffered a hardship of temporary duration that can be resolved is eligible and the same is true of those who need assistance getting back on track to start fresh. Four programs are offered. Once a program has been selected, the application process begins and certain steps must be followed. Here is how to request HSBC hardship assistance.
Determine which hsbc loan modification program bests meets your personal situation.
Loan modification or temporary payment modification-The hsbc loan modification is a formal written agreement between the borrower and lender which reduces the monthly payments for an established period of time. If the situation persists when this time period is up, additional options may be offered. This hsbc mortgage modification allows the borrower to make a reduced payment for the modification period without the need to pay additional fees or refinance the home.
Reinstatement-This process prevents the property from going into foreclosure by bringing the account up to date, including all fees and cost.
Repayment plan-As with the loan modification or temporary payment modification, this plan involves a formal, written agreement. Here your regular mortgage payment will be made each month along with a portion of the past due unpaid balance. This plan is for a pre-determined time period and brings the account current over time to avoid or stop foreclosure.
Restructure-This program allows you to avoid foreclosure by deferring payments to bring the account current. This agreement between the borrower and lender allows you to get caught up on payments that got behind without having to come up with the funds up front.
Once you have selected a program you must contact an HSBC Mortgage Servicing Professional to discuss the options and whether or not the selected program is right for you. These professionals may be reached at 1-800-395-3489.
Documentation must be gathered so the lender can assess the request and this documentation must be provided within 15 days from the date of the payment assistance request. If the documentation is not received in this time period, the request will be denied. Types of documentation needed will include:
Two subsequential pay stubs which must be dates within 60 calendar days of the modification request.
For those who are self-employed, three months of the most recent bank statements must be provided. These statements must show all transactions details. If these aren’t available, the prior year’s tax return must be provided along with the Schedule C or K.
Those who have no income must complete a written statement attesting to this.
- Unemployment/public assistance pay stubs or a benefit letter must be provided for those in this situation and they must be within the last 60 calendar days of the request.
- Pension/annuity/SSI/ Disability information is needed if an applicant is receiving money under one of these programs.
- Rental income must be documented by providing the complete prior year’s tax return with Schedule C.
Florida State Mortgage Help-So You Can Stay in Your Home
Florida State Mortgage Help is available for those in danger of losing their home. A number of Florida mortgage aid programs are offered along with emergency housing assistance and public housing. Bankruptcy and credit counseling are offered for those in this situation along with other resources. No matter what type of help you need when it comes to your home, look no further than Florida Prevention Resources to help you get your life back on track.
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