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Answers (12)
- JoAnna Jensen, "StopForeclosureFraud"
- Contributions:141
Hi,
We have several regulations that require the lender do specific things.
Depending on what your loan balance is and if you live in the home or not you may meet the initial criteria for Hamp.
If you meet HAMPs Criteria
Principal residence
loan at or below $729,940
originated loan on or before 1/1/09
the loan is greater than 31% of your gross
your servicer has a duty per California Civil Code 2923.6 to Maximize your Net Present Value.
Meaning, if your loan gives the investor more money today if they modify your loan to 31% of your gross income :
It is the intent of the legislature that the mortgagee beneficiary or authorized agent offer the borrower a loan modification or workout plan.
A few more things to consider. Typically, if you look at the cost of a short sale, realtors fees, attorneys fees and other costs, vs current market value if the lender did not even do your net present value worksheet it may be enough to stop a foreclosure. The services are required to do specific steps in a workout and prove they did the steps otherwise a wrongful denial is the same as no modification review at all.
There is a big difference having a knowledgeable attorney doing your loan mod than trying to do it on your own.
Also, we just had a very nice initial ruling for a homeowner in central ca.
There is a Principal Reduction Alternative Loan Modificaiton Program in effect. This is for homeowners who live in their home and meet the criteria for hamp.
The servicer is required to run the nov twice. Once at the loan balance again at the current market value to see if it would be possible to get the home owner to 31% of their gross income.
We have several regulations that require the lender do specific things.
Depending on what your loan balance is and if you live in the home or not you may meet the initial criteria for Hamp.
If you meet HAMPs Criteria
Principal residence
loan at or below $729,940
originated loan on or before 1/1/09
the loan is greater than 31% of your gross
your servicer has a duty per California Civil Code 2923.6 to Maximize your Net Present Value.
Meaning, if your loan gives the investor more money today if they modify your loan to 31% of your gross income :
It is the intent of the legislature that the mortgagee beneficiary or authorized agent offer the borrower a loan modification or workout plan.
A few more things to consider. Typically, if you look at the cost of a short sale, realtors fees, attorneys fees and other costs, vs current market value if the lender did not even do your net present value worksheet it may be enough to stop a foreclosure. The services are required to do specific steps in a workout and prove they did the steps otherwise a wrongful denial is the same as no modification review at all.
There is a big difference having a knowledgeable attorney doing your loan mod than trying to do it on your own.
Also, we just had a very nice initial ruling for a homeowner in central ca.
There is a Principal Reduction Alternative Loan Modificaiton Program in effect. This is for homeowners who live in their home and meet the criteria for hamp.
The servicer is required to run the nov twice. Once at the loan balance again at the current market value to see if it would be possible to get the home owner to 31% of their gross income.
- Loren Hoboy, "ArizonaDreamHomes"
- Contributions:77
I know you don't want to hear this, but you are headed for a short sale, a deed-in-lieu of forclosure, foreclosure or bankruptcy if you can't pay the monthly payment. The chances of a principal reduction are about zero since the banks have no incentive to grant you one. A discussion with a real estate lawyer is your next step which can be done for under $300. A real estate profession that does short sales can suggest an attorney you can work with or contact me for some names if you are in the Phoenix area.
- JoAnna Jensen, "realestateadvocate"
- Contributions:78
Hi,
The information I gave is accurate.
While I work for a real estate attorney as a Legal Assistant.
Lenders do give principal reductions depending on the value of your home vs. amount of loan and getting your new payment to 31% of your gross income. this is the Principal Reduction Alternative for the Making Home affordable mod.
also depending on the type of loan you have and if your current you may possibly be able to get a short refi this however is only for homeowners who are current, live in the home as their principal res.
the first loan needs to be 10% or more upside down.
No late pays in the past 12 months
your loan can not be FHA, Fannie or Freddie
I do know GMAC, and Wachova are doing this on specific scenarios.
Not intended as legal advice.
If you loan was originated with fraud, ie neg am loan where loan officer said your income was x and it was not lenders have reduced principal as a settlement.
Joanna Jensen
The information I gave is accurate.
While I work for a real estate attorney as a Legal Assistant.
Lenders do give principal reductions depending on the value of your home vs. amount of loan and getting your new payment to 31% of your gross income. this is the Principal Reduction Alternative for the Making Home affordable mod.
also depending on the type of loan you have and if your current you may possibly be able to get a short refi this however is only for homeowners who are current, live in the home as their principal res.
the first loan needs to be 10% or more upside down.
No late pays in the past 12 months
your loan can not be FHA, Fannie or Freddie
I do know GMAC, and Wachova are doing this on specific scenarios.
Not intended as legal advice.
If you loan was originated with fraud, ie neg am loan where loan officer said your income was x and it was not lenders have reduced principal as a settlement.
Joanna Jensen
- JoAnna Jensen, "realestateadvocate"
- Contributions:78
Hi,
The information I gave is accurate.
While I work for a real estate attorney as a Legal Assistant. no information I offer is intended as legal advice. this is simply for homeowners to know potential available options vs. short sale and foreclosure.
Lenders do give principal reductions depending on the value of your home vs. amount of loan and getting your new payment to 31% of your gross income. this is the Principal Reduction Alternative for the Making Home affordable mod.
also depending on the type of loan you have and if your current you may possibly be able to get a short refi this however is only for homeowners who are current, live in the home as their principal res.
the first loan needs to be 10% or more upside down.
No late pays in the past 12 months
your loan can not be FHA, Fannie or Freddie
I do know GMAC, and Wachova are doing this on specific scenarios.
Not intended as legal advice.
If you loan was originated with fraud, ie neg am loan where loan officer said your income was x and it was not lenders have reduced principal as a settlement.
Joanna Jensen
The information I gave is accurate.
While I work for a real estate attorney as a Legal Assistant. no information I offer is intended as legal advice. this is simply for homeowners to know potential available options vs. short sale and foreclosure.
Lenders do give principal reductions depending on the value of your home vs. amount of loan and getting your new payment to 31% of your gross income. this is the Principal Reduction Alternative for the Making Home affordable mod.
also depending on the type of loan you have and if your current you may possibly be able to get a short refi this however is only for homeowners who are current, live in the home as their principal res.
the first loan needs to be 10% or more upside down.
No late pays in the past 12 months
your loan can not be FHA, Fannie or Freddie
I do know GMAC, and Wachova are doing this on specific scenarios.
Not intended as legal advice.
If you loan was originated with fraud, ie neg am loan where loan officer said your income was x and it was not lenders have reduced principal as a settlement.
Joanna Jensen
- sunnyview
- Contributions:25139
Principal reductions are rare and if you need one to keep your house, you need to make another plan. Lenders would rather foreclose and be done with it than do a principal reduction. You need to get legal advice from a lawyer and not an agent or legal assistant. Most attorneys will do an initial consult for a low cost. Some will do 30 minutes for free.
Get all the facts, get your legal advice and see if another option like short sale or deed in lieu might help you get out from under your house.
Get all the facts, get your legal advice and see if another option like short sale or deed in lieu might help you get out from under your house.
- Jesse Madison, "Jesse Madison"
- Contributions:143
There are no "guidelines" per se that I have heard of. Some banks have actually given principal reductions during modifications. It is not common but I have seen it done. If you contact your lender you can ask if they offer such a modification program and see if you qualify.
- Loren Hoboy, "ArizonaDreamHomes"
- Contributions:77
At best you might be able to get a modification if your loans is no more than $25% greater than the home value. Generally that modification is in the form of a lower interest rate and changing the loan term from 30 years to 40 years. None of this is a principal reduction.
If anyone has done a principal reduction, we would like to hear the details and learn what program actually does this.
I am of the opinion, that in the Arizona market where values fell 40-50% that unless your loan is less than the value of your house , asking for a loan modification is a waste of time and other options like short sales or deed-in-lieu of foreclosure with full debt release language (which they will try to avoid), foreclosure (debt goes away in AZ) or bankruptcy should be considered.
If anyone has done a principal reduction, we would like to hear the details and learn what program actually does this.
I am of the opinion, that in the Arizona market where values fell 40-50% that unless your loan is less than the value of your house , asking for a loan modification is a waste of time and other options like short sales or deed-in-lieu of foreclosure with full debt release language (which they will try to avoid), foreclosure (debt goes away in AZ) or bankruptcy should be considered.
- JoAnna Jensen, "StopForeclosureFraud"
- Contributions:141
You may qualify for a principal reduction depending on a few things:
1: if you qualify for a loan mod, and your first mortgage is more than 31% of your gross income, lenders are now doing a Principal Reduction Alternative. howver you need to first qualify for a mod, then the lender/investors reduces your first fully amortized mortgage payment to 31% of your gross.
They do it based on a water fall.
first they reduce your interest, if they can get your payment to 31% by reducing your interest or extending the term of your loan you will not get a principal reduction.
Next if your current, and you have a NON FHA loan you may qualify for a Short Refi. This is also based on lender approval and not a quarantee. if you qualify you can get a new FHA loan at 97% of the current market value.
I know some lenders do participate Im working on this with a few clients.
You can not demand a principal reduction.
If however there was fraud in the origination of your loan we have been able to get principal reductions there but that has to be proven and youll need an attorney to get that done.
Lastly, thru bankruptcy may be an option. but you may want to save your credit and do a short sale way before this happens.
The lender will only help if your facing a financial hardship.
Not intended as legal advice, showing options that may lead to a principal reduciton.
1: if you qualify for a loan mod, and your first mortgage is more than 31% of your gross income, lenders are now doing a Principal Reduction Alternative. howver you need to first qualify for a mod, then the lender/investors reduces your first fully amortized mortgage payment to 31% of your gross.
They do it based on a water fall.
first they reduce your interest, if they can get your payment to 31% by reducing your interest or extending the term of your loan you will not get a principal reduction.
Next if your current, and you have a NON FHA loan you may qualify for a Short Refi. This is also based on lender approval and not a quarantee. if you qualify you can get a new FHA loan at 97% of the current market value.
I know some lenders do participate Im working on this with a few clients.
You can not demand a principal reduction.
If however there was fraud in the origination of your loan we have been able to get principal reductions there but that has to be proven and youll need an attorney to get that done.
Lastly, thru bankruptcy may be an option. but you may want to save your credit and do a short sale way before this happens.
The lender will only help if your facing a financial hardship.
Not intended as legal advice, showing options that may lead to a principal reduciton.
- Godsgirl123
- Contributions:2
WOW!!
Thank you for all your wonderful opinions.
Sounds like I got a real challenge ahead of me.
One thing I know for sure: " Never do anything I don't have Faith in."
I'll let ya'all know my outcome.
Thank you ..... Godsgirl1
Matt:7:7
Thank you for all your wonderful opinions.
Sounds like I got a real challenge ahead of me.
One thing I know for sure: " Never do anything I don't have Faith in."
I'll let ya'all know my outcome.
Thank you ..... Godsgirl1
Matt:7:7
- Loren Hoboy, "ArizonaDreamHomes"
- Contributions:77
Principal reduction is virtually unheard of. I have never personally seen one. [Has anyone else?]
You may qualify for interest reduction, or a restructure of the loan ie 40 yr amortization vs 30 years or they may lower payments and tack them on to the back of a loan. You will need to prepare a Hardship letter and provide a number of documents to prove you can't pay the current loan and than that you do qualify for the revised one. The information they will want is the same as that for a short sale. See http://www.arizona-dream-homes.com/SHORT_SALE_PROCEDURES.html and http://www.arizona-dream-homes.com/ArizonaShortSale.html for more information.
From what I see, loan restructures are generally rejected if the loan balance is more than 25% greater than the actual home value. You may find a short sale or foreclosure is your only option given the lending/economic environment we are in. I suggest you seek legal advice from a real estate attorney skilled in this area and engage an experienced short sale seller's agent to try and get information specific to your circumstances so you can decide what to do. Let me know if you need more help.
You may qualify for interest reduction, or a restructure of the loan ie 40 yr amortization vs 30 years or they may lower payments and tack them on to the back of a loan. You will need to prepare a Hardship letter and provide a number of documents to prove you can't pay the current loan and than that you do qualify for the revised one. The information they will want is the same as that for a short sale. See http://www.arizona-dream-homes.com/SHORT_SALE_PROCEDURES.html and http://www.arizona-dream-homes.com/ArizonaShortSale.html for more information.
From what I see, loan restructures are generally rejected if the loan balance is more than 25% greater than the actual home value. You may find a short sale or foreclosure is your only option given the lending/economic environment we are in. I suggest you seek legal advice from a real estate attorney skilled in this area and engage an experienced short sale seller's agent to try and get information specific to your circumstances so you can decide what to do. Let me know if you need more help.
- Spirit Messingham, "TucsonSpirit"
- Contributions:663
Speak with them, try and get someone on the phone (good luck with that) and I would not demand anything. Show them a REASON why they should work with you. IE what will happen if the reduction does not occur, could the house end up in foreclosure and etc.
Best of luck.
Best of luck.
- wetdawgs
- Contributions:26833
Principle reductions are the exception, not the rule. "demanding" won't work, it will get a good laugh in the break room. I suspect they've offered just enough principle reductions to make the news reports, and no more!
What can you do? You can compile your documentation, showing your changed financial picture and approach your lender for a loan modification. You can read the making homes affordable website to see if you are qualified. Hopefully you can get your interest rates reduced so your monthly payments are lower.
What can you do? You can compile your documentation, showing your changed financial picture and approach your lender for a loan modification. You can read the making homes affordable website to see if you are qualified. Hopefully you can get your interest rates reduced so your monthly payments are lower.
I really need info on how to pursue a principal reduction with my prim. investor directly.
Like what should I ask for or should I demand it?
Thank you Abrana godsgirl1@cox.net
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