The Idaho Housing and Finance Association have worked with IdaMortgage .com for over 40 years to help people to buy their homes. The website has a lot to offer including Homebuyer Education, information about programs with excellent interest rates, help with down payment and closing costs and tax credits for property buyers.

You can apply for any of the loan products on offer. For example if you need help with down payment and closing costs then the DPCC (Down Payment Closing Cost Assistance Program) could be exactly what you need.

This loan is especially designed for first-time homebuyers whose income is under 80% of the average for the area. The loan is for at least $1,000 and can not be for more than $8,000. The borrower must pay out at least $500- and the house must have been owner occupied or vacant.

Before you apply for the loan you must complete the Education Program for Homebuyers called Finally Home! A very good start to an IdaMortgage Home Loan would be to go on line at IdaMortgage.com and answer the questions to find out if you are eligible. You could do the same thing by calling 1-866-432-4066. As soon as you are accepted as eligible you will be given a referral to a lender who participates in the program. You will then be able to go ahead and find your ideal property and with the IdaMortgage loan at a fixed low rate, for 30 years you can soon be enjoying the sensation of living in your own home.

There is a variety of programs available such as the Good Credits Rewards Loan. It is an arrangement whereby you can have a second loan or mortgage for as much as 3.5% of the value of your first mortgage which you can then use for your down payment and closing costs. It is a program designed for people whose income is below 140% of the average for the area. They must complete the Finally Home! Homebuyer Education Program and have a credit score of not less than 680.

The Advantage Loan Program is for 30 years and can be for a first-time homebuyer or not as this is not a requirement. The are income limits but there are no sales price limitations. You can use the loan for the purpose of buying your property or for refinancing and you could be entitled to as much as $2,000 tax credit each year.

Those who qualify for this loan would also be entitled to take out the USDA-RD Streamline Refinance Loan. This loan has no sales price limits but there are income limits as is the case with the Advantage Loan. This Streamline loan has the advantage that your present loan may be an IHFA loan or not as this is not a requirement.

The FHA 203(k) Streamline Rehabilitation Loan has been especially designed for those who need to make improvements to their property. This could be painting –new carpets or even new windows or roof. There are many other products available so you are invited to call or go on line to find the right program for you.

If you own a Citigroup mortgage and are struggling to make your monthly payments, you may be able to benefit from Citigroup’s CitiMortgage campaign. This program is travelling as a road tour around the United States to meet struggling homeowners who want a loan modification. These outreach efforts have the effect of stimulating homeowners who would otherwise do nothing in the hope that “things will work themselves out” to attend the meeting and determine if they qualify for a modification.

Up to date, CitiMortgage has travelled to four cities as part of its 10 city tour. The tour which has already visited Baltimore, Cleveland, Atlanta and Orlando still has to visit Los Angeles, Miami, Detroit, Phoenix, Las Vegas and one more city the organizers are still deciding on. These road to recovery events are sponsored by CitiGroup and non-profit housing counselors.

What have been the results up to date of these events? The figures provided by CitiGroup are promising. According to CitiBank officials the program has approved 65 percent of those that attended the events. Although, we don’t have the attendance figures, officials say 95 percent of those in attendance were 60 days behind in their payments, which makes the previous 65 percent figure ever more so encouraging.

Sanjiv Das, the CEO of CitiMortgage, claims the priority of CitiMortgage is to help customers avoid foreclosure and according to these preliminary figures it seems like this is being accomplished in most of the cases.

What about those who simply do not qualify for a mortgage modification? CitiMortgage guides these homeowners towards foreclosure alternatives, such as a short sale or a deed-in-lieu of foreclosure to minimize the damage caused to families by foreclosures. A short sale allows homeowners to sell their home for less than the balance of their mortgage and in some cases will “forgive the difference between the mortgage balance and the short sale price. A deed-in-lieu of foreclosure allows the homeowner to hand over the deed of the property in exchange of avoiding foreclosure. In most cases the lender will forgive any late payments and the balance between the current market price of the home and the mortgage balance.

However, it is important to get these assurances in writing because in certain states lenders can claim any losses they suffer after a short sale or deed-in-lieu of foreclosure after the house has been sold if there is not a written agreement to the contrary.

After a slow start, Bank of America is embracing the federal government’s Home Affordable Unemployment Program and expanding the program to all regions qualifying for the federal Hardest Hit Fund. This extra help for unemployed workers could not come at a better time. Currently in the United States there are 13.7 million unemployed workers, according to statistics provided by the Labor Department. Unemployed workers are a specially vulnerable demographic among home owners who are at risk of foreclosure.

The Hardest Hit Program

In February 2010, the federal government allocated $7.6 billion towards helping states and regions which had been particularly hard hit by the real estate crash and the economic recession. These areas include, Florida, California, Michigan, Alabama, Arizona, Illinois, Georgia, Indiana, Kentucky, Nevada, Mississippi, New Jersey, North Carolina, Ohio, Oregon, South Carolina, Rhode Island, Washington, DC and Tennessee.

Despite some promising figures in the last week of April (some 400,000 new jobs), there are still nearly 8 million workers who are on some kind of unemployment benefits. Until the unemployment issue improves it is difficult to see a long term solution to the foreclosure. In an effort to manage the increase in foreclosures among unemployed workers, banks such as BofA and Ally Financial are opening their unemployment mortgage assistance programs under the Government Home Affordable Unemployment Program to the areas that need it the most.

The Home Affordable Unemployment Program

The purpose of the Home Affordable Unemployment Program is to provide unemployed workers with time to find a job and reorganize their finances so they can afford their mortgage payments. The minimum period during which mortgage payments are suspended in this program is three months. During those three months, sometimes more, unemployed workers do not have to pay their mortgage and can concentrate their resources in finding a job. If you do find a job while in the program, you will be considered for HAMP, the Home Affordable Modification Program, which is designed to reduce your mortgage payments to 31 percent of your monthly income before tax.

If you do not find a job a month before your unemployment mortgage assistance program ends you will also be considered for HAMP. If you are not accepted, BofA, or whatever bank you are using, will determine your eligibility for other mortgage assistance programs.

Notice however that this program does not “forgive” mortgage payments during the three-month period. It simply suspends payments temporarily. These payments must be refunded once the program ends. There are two main ways to repay them: either by a single one-time payment or by increasing monthly mortgage payments until the debt is repaid.

Are you interested in this program? Why not contact BofA and see if you qualify under the expanded program.

Connecticut Mortgage Help

If you are thinking to buy a home in Connecticut and you have a low to medium income family, the Connecticut Housing Finance Authority has a number of mortgage assistance programs you should consider before committing yourself to another lender. The CHFA is a non-profit mortgage insurance provider which is committed to helping low and medium income families take their first step in the property ladder.

The CHFA provides mortgage programs to help you buy a house, pay the downpayment on a home, rehabilitate and renovate a property, as well as enabling tenants to become homeowners. This article will provide general information on the main programs provided by the CHFA as well as explaining how you can apply for further information.

Homebuyer Mortgage Program

The CHFA’s flagship first-time homebuyer program is the Home Mortgage Program. It provides Connecticut residents who are purchasing a home for the first time with 30-year fixed low interest rates (currently 3.875 percent). Applicants must meet CHFA income limits to qualify. However, certain areas targeted by the CHFA do not require buyers to meet income limits. Click here for more information on this program.

Downpayment Assistance Program

The Downpayment Assistance Program is designed to help you pay for the expenses associated with buying a home, such as a downpayment and closing costs. The CHFA offers these loans at lower interest rates than conventional commercial loans. Usually, the CHFA will match the interest rate offered by your main mortgage provider and in some cases will even improve on it. Successful applicants must prove they have the necessary income to pay for their main mortgage and downpayment assistance loan. Applicants can combine a Homebuyer Mortgage Program loan with a Downpayment Assistance Program loan. Loans range from $3,000 to a maximum 25 percent of your home’s purchase price. Click here for more information on this program.

HERO Program

The HERO Expansion program helps stabilize neighborhoods by encouraging first-time buyers to invest in areas with a high density of foreclosed and abandoned homes. The program provides buyers with low-interest (currently 3.875 percent) 30-year fixed-rate mortgages. You can own another property and apply for the HERO program but you must agree to live in the new home as your primary address and you cannot sell a HERO program within the first 5 years of purchase without approval from the CHFA. For more information on this program click here.

UR HOME

The Urban Rehabilitation Homeownership Program (UR HOME) is a similar program to the HERO program. Its goal is to encourage buyers to invest in areas which have fallen into disrepair by granting low interest rate mortgages and zero-interest home-improvement loans. Click here for more details on this program.

If you are having financial difficulties and face the possibility of a foreclosure, you are not alone. Around 7 million American households are facing that very problem. The good news is there are ways to avoid a foreclosure and save your home. Many in your very same situation have taken advantage of government mortgage help programs and saved their home. You may be able to do so too. This article provides a brief summary of the steps the Federal Deposit Insurance Corporation suggests you can take to protect your home and family from foreclosure.

Step 1

The first step you must take is to not ignore your situation. Many homeowners try to ignore their plight hoping their financial situation will simply improve by itself. This rarely happens. Action is needed. Taking control of your situation and understanding the steps you must take to fight back is the first and most important step to avoiding foreclosure.

Step 2

Talk to a housing counselor today. The government provides housing counselors for free or at low cost through sponsored counseling agencies. Click here for a list of counseling agencies in your area.

Housing counselors can inform you about your rights, and the different programs the government and lenders have for borrowers who are struggling to make their payments. They provide unbiased advice because they are funded by federal funds not lenders or brokers.

Step 3

Don’t view your lender as the enemy. Not yet anyway. Believe it or not, most of the times your lender wants to help you keep your home. Foreclosures are expensive operations lenders prefer to avoid if at all possible. Also, the government has provided a number of programs that provide incentives to lenders that provide borrowers with loan modifications and mortgage refinancing.

Step 4

Contact your mortgage servicer today, straight after talking to a housing counselor. The sooner you look for help from your mortgage servicer the more options will be open to you. Expect long waits on the phone and the frustration of retelling your story to various people. If you are not sure who your mortgage servicer is, check your mortgage statement or find out online by clicking here.

Apply for a loan modification or a mortgage refinance depending on your circumstances. Your housing counselor will help you determine what is the best option for you. Even if there is no way you can keep you home, there are alternatives to foreclosure, which can help alleviate some of the negative consequences of a foreclosure.

Clip coupons, but only use them for items you are planning to buy. Always go grocery shopping with a list. Never shop when you are hungry. Plan out a weekly menu. Have a budget. Look for price-matching policies.

These are just a few of the countless shopping tips we have all heard and use in our everyday life. Surprisingly, when it comes to shopping for a mortgage, which will probably be the biggest investment we ever make, shopping tips don’t seem to roll off the tongue so easily. The problem is that if you make a mistake shopping for groceries, well, you may end up with an empty wallet. But if you screw up shopping for a mortgage you could easily end up bankrupt. The bottom line? It pays to do some research and get it right, especially when the receipt total is in the tens or even hundreds of thousands of dollars.

The Federal Reserve Board offers a list of 5 commonsense tips you should know before shopping for a mortgage.

Know what you can afford.

Take an honest look at your finances and write out a monthly spending plan. On one column write in all your fixed expenses. Remember to include your mortgage monthly payments, property taxes, property maintenance, utilities, insurance, taxes, medical insurance, groceries, credit card payments and other loans. Compare your expenses with your income and make sure you can afford your mortgage monthly payments for years to come. Now you know what you can afford with your current income, see what the bank says you can afford. Check your credit report and make sure all the information on it is accurate. You can check your credit report once a year for free at www.AnnualCreditReport.com. The higher your credit score the more you can borrow and the lower your interest rate will be.

Shop around, compare and negotiate with lenders and brokers.

If you don’t shop around when shopping for groceries, you may spend a few bucks more. Fail to shop around and compare prices when shopping for a mortgage and it could cost you thousands of dollars. Do not trust lenders or even brokers to find you a good deal, ultimately, you have to do the shopping. For more information on this read our article Looking for the Best Mortgage, based on research by the National Credit Union Administration.

Understand the risks and benefits of your loan options.

Mortgage might sound like quantum mechanics to you and best left to experts, but that attitude could cost you dearly. You need to understand the difference between a fixed-rate interest and an adjusted-rate mortgage; what payment adjustments are; whether or not you will have to pay a penalty for paying your mortgage early and what is an APR and how you can use it to compare mortgages.

Understand loan prices and fees

In many ways shopping for a mortgage is like shopping for a car. Nothing is set in stone. There is ample room for negotiations. Remember, mortgage brokers and loan originating officers get paid a commission on your mortgage. So it is not always in their best interest to get you a good deal. Get my drift? There are many fees that can be waived or at the very least reduced. A lot will depend on your credit score and history but there is always room for negotiation.

Get advice from trusted sources.

Mortgages are complicated. As the most costly financial contract you are likely to ever sign you owe it to yourself to get good advice before committing yourself. For example, you can use a housing counselor you can trust or an attorney specialized in real estate. Just make sure it is an attorney YOU are paying for, not the bank or the broker that is set to make a profit out of your business. The Department of Housing and Urban Development have a list of government-sponsored counseling services you can use.

The National Credit Union Administration provides you with the resources and information you need to find a good deal on your mortgage. Understanding the jargon and fine print of mortgage agreements can be daunting so here are some pointers of where you should start.

Key Terms and Questions You Must Understand and Ask

Find out what conventional mortgages are, as opposed to FHA and VA insured mortgages. Learn what an escrow is and how they are used during the closing stages of a mortgage. Understand the difference between loan origination fees, third-party fees and points.

Ask about the rates each lender offers. Is it a fixed-rate or an adjustable-rate loan. If it is an adjustable-rate mortgage, ask your lender how the monthly payments will vary and if your monthly payments will go down if interest rates drop.

Ask what their loan’s APR is and how they calculate it.

Ask what points you will have to pay for your mortgage and what points you can choose to pay to reduce your interest rate. Request the dollar value of these points so you can compare them to the points requested and offered by other lenders.

Ask for a good faith estimate, also known as a GFE. This is a detailed run-down of all the fees associated with the mortgage. In the United States, every lender must provide a GFE with a list of fees and costs linked to a loan within three business days of the customer applying for a loan. But you can also request it before applying for a loan as a comparison tool between mortgages. The fees included in a GFE fall into six main categories: loan fees, reserves, title charges, government charges, additional charges and mortgage initiation fees. Each fee is prefaced by a code. Use this code to compare the fees between mortgage provides because the actual names can vary from one lender to another.

Negotiate

Once you know what each lender is offering you, make a list of the mortgage providers who offer the best deal. Go back to them and try and negotiate better terms by using the terms offered by other lenders as leverage.

If shop around, compare (and understand) the quotes each lender offers and negotiate better terms, you are much more likely to get a good deal.

The NCUA provides a mortgage shopping worksheet you can use to help you collect the key points of the mortgages you research as well as more resources to research information on home lending issues.

You will need to fill an IRS 4506T Form to complete your Homeowners Information Packet

This series of articles looks at the process of applying for a loan modification program. This process is used by CHASE’s Loan Modification Program (the program we are using as a model), CitiBank’s Loan Modification Program, Bank of America’s Loan Modification Program and other major lenders in the United States.

As we have seen in previous articles in this series the main stages of a loan modification program are:

1.) The initial conversation with a loss mitigation agent.

2.) The eligibility review.

3.) The trial period plan.

4.) The final agreement.

Our previous three articles described the forms and documents required to apply for a loan modification. These documents are important because the information collected in the Homeowners Information Packet determine your eligibility for a loan modification. This packet contains your documentation list, a list of all the documents you must provide, a Request for Modification form (also called RMA) and an IRS form 4506T. This article will deal with the last form in the Homeowners Information Package, the IRS form 4506T, and provide useful tips on how to fill it.

The IRS form 4506T

The IRS form 4506T form gives Chase permission to request copies of your tax records to the IRS. Tax records are used to check and verify your income information. Click here for a pdf copy of an IRS form 4506T. You need to fill in the form with your personal information and all borrowers listed on the mortgage agreement. Remember you and all co-borrowers need to sign and date all the necessary forms. Check you are sending all pages of your statements and copies of any documentation you need to back your claims. If you are sending your application by fax, make sure you send the front and back of the document (a classic mistake). One of the biggest complaints homeowners have about loan modification programs are the long delays and ongoing lists of necessary documentation. Often delays and the need to send extra documentation can be avoided if you check your Homeowners Information Packet’s Document List, make sure all forms are completed and signed by all parties involved in the mortgage and include copies of all the supporting documents required by your lender.

Incomplete Homeowners Information Packet, which are not signed or have documents missing will cause delays. If y0u have any questions call your servicer’s customer service desk. If you are a Chase customer (we have been using Chase’s Loan Modification Program as a sample) you can call 866-550-5705.

Our next and final article in this series on Loan Modification Procedures will deal with your Trial Period Plan and The Final Agreement.

Chase is one of many banks offering its clients private Loan Modification Programs

If you are struggling to make your mortgage payments but still have a regular income and could afford mortgage payments if they were a little more affordable, you might be a candidate for a loan modification. This series of articles looks at how bank’s loan modification programs can help you save your home from foreclosure. We are using CHASE’s loan modification program as an example, but the principles apply to most loan modification programs.

As we explained before the only reason banks are willing to lower your mortgage payments or otherwise improve your mortgage terms is if you can prove you have a real financial hardship and you will be forced to foreclose on your mortgage if your payments cannot be reduced. You also need to prove you have enough income to pay for reduced mortgage payments. Your objective when applying for a loan modification is to prove you can’t afford your current payments but could afford modified (i.e. lower mortgage payments).

If you can’t prove you have a financial hardship, your bank will see no reason to reduce your payments. If you can’t prove you can afford reasonable mortgage payments, your bank might decide foreclosure is their best option after all. Remember, banks offer loan modifications because foreclosures are more expensive than loan modifications not because of a specially charitable disposition. You need to provide evidence that you will be a reliable borrower if only your payments can be reduced. This evidence is provided in the second step of a loan modification: the eligibility review.

Loan modifications have four basic stages:

1.) The initial conversation with a loss mitigation agent.

2.) The eligibility review.

3.) The trial period plan.

4.) The final agreement.

In the eligibility review you must provide detailed information about your personal and financial situation. Your first step is to complete a homeowners information package. The package is composed of three sections:  the Documentation checklist

The Documentation list is a list (fancy that!) of all the documents you must provide to your bank so they can review and verify the information you provide. Documentation lists include recent bank statements and tax returns, W-2s and proof of additional income from you and any co-borrowers that appear on your mortgage. Required forms will vary depending on your situation. For instance if you are self-employed you will need to provide additional documents. The documentation list includes all the information you need to fill in the form correctly, so read it carefully. Remember all borrowers will need to sign and date all the forms and don’t forget to send both the back and the front of the forms when faxing documents.

The key is to supply your banker with proof of all the income you receive, whether it is a wage packet, a pension, alimony or any other regular deposits that appear on your bank statements.

Your next step is a request for modification of RMA. You will find more information on this in our next article.

Bank of America announced to 2,500 of its workers in they were being reassigned to loan modifications. This increase in staff for BofA’s loan modifications section comes two weeks after the national bank promised Congress they would improve the service they offered to struggling borrowers facing foreclosure. BofA came under scrutiny by the Senate Banking Committee hearing into mortgage servicing.

Servicing is a term that describes the billing, collecting of payments and managing of delinquencies and foreclosures for investors in mortgage-based securities.

Bank of America has received a lot of criticism for the way it deals with customers facing foreclosure. At the Congress hearing, chief of BofA, Barbara Desoer, announced the company would create a new system to deal with loan modification cases. The new system will assign case managers to loan modifications so that homeowners do not have to jump from one loan modification agent to another and explain their situation over and over again. The idea is this will speed up the process and reduce the number of lost documents and unnecessary delays.

Bank of America is the largest mortgage servicer in the United States since they bought out Countrywide Financial Corp., the previous number 1 mortgage lender.

Up to now, Bank of America has helped over 130,000 modify their loan to reduce their mortgage payments to an affordable level. The two other American banking giants, Chase and WellsFargo have also announced they will assign specific case managers for loan modifications, although Chase has still the implement the program.

Barbara Desoer explained in the Senate hearing the program would deal with one of the main problems borrowers complain about: having to explain their situation to a different employee each time they called and having to deal with changing and often conflicting instructions for loan modification officers.

According to BofA, they are using workers from their mortgage origination departments because they are already familiar with the processing and analysis of documents required to asses loan modification applications. This is a significant increase in the staff dedicated to loan modifications, a more than 10 percent increase in a single week.

The problem until now is that loan modifications remained a “specialty” operation of billing and collecting of payments departments. These departments had neither the manpower (or womanpower) or resources to deal with the flood of loan modifications that started in late 2007.

This change in strategy will hopefully give more borrowers the chance of reducing their monthly payments and avoid foreclosure.