Frequently Asked Questions
It is
understandable to have questions when
coping with a new and challenging
situation, especially when a home is at
stake. The reality is that millions of
homeowners across the country are
finding out that they have more
questions than answers. I hope that the
following information will help you
better understand the circumstances. If
you have further questions not addressed
below, or would like additional
information resources, feel free to
contact me at 408.832.8899 or at
Jim@Pojda.org
Do I
qualify for a short sale?
The
qualifications for a short sale include
any or all of the following:
-
Financial Hardship – There is a
situation causing you to have
trouble affording your mortgage.
-
Monthly Income Shortfall – In other
words: “You have more month than
money.” A lender will want to see
that you cannot afford, or soon will
not be able to afford your mortgage.
-
Insolvency – The lender will want to
see that you do not have significant
liquid assets that would allow you
to pay down your mortgage.
What is
a mortgage modification?
A
mortgage modification is a process
through which your mortgage lender
changes any or all of the following:
- Your
interest rate
- Your
principal balance (through a
reduction)
- Your
loan terms (example: from an
adjustable to a fixed rate)
This
process can allow borrowers to stay in
their property when they can no longer
afford their current mortgage payments.
Why
would a lender modify my mortgage?
Lenders
have realized that in some cases it is
better for them to work with current
borrowers to lower payments or possibly
improve terms in order to keep
homeowners in their properties. The
average foreclosure can cost a lender
from 35-50% of the value of a property,
so keeping borrowers in their homes is a
good option for everyone.
What do
I need to qualify for a mortgage
modification?
According
to the Making Home Affordable Web site (www.MakingHomeAffordable.gov),
you will need the following information
for your lender to consider a
modification:
-
Information about your first
mortgage, such as your monthly
mortgage statement
-
Information about any second
mortgage or home equity line of
credit on the house
-
Account balances and minimum monthly
payments due on all of your credit
cards
-
Account balances and monthly
payments on all your other debts
such as student loans and car loans
- Your
most recent income tax return
-
Information about your savings and
other assets
-
Information about the monthly gross
(before tax) income of your
household, including recent pay
stubs if you receive them or
documentation of income you receive
from other sources
If
applicable, it may also be helpful to
have a letter describing any
circumstances that caused your income
reduce or expenses to increase (job
loss, divorce, illness, etc.)
How do I
qualify for a mortgage modification?
The first
call you make should be to your lender,
have the information above ready to
discuss with them and call your customer
service line to ask them what options
you have available. If the person you
speak with does not understand what you
are asking, you can ask to be referred
to one of the following departments
(different lenders have different names
for these departments):
- Loss
Mitigation
-
Mortgage Modification
-
H.O.P.E.
Prior to
contacting your mortgage lender you can
quickly complete an eligibility test at
www.MakingHomeAffordable.gov. This test
will let you know if you are eligible
for a modification through the
government-sponsored Home Affordability
and Stability Program (HASP). For a list
of mortgage lenders and servicers, visit
www.HopeNow.org.
What if
I don’t qualify for a mortgage
modification, can’t afford my home, and
owe more than it’s worth?
You are
not alone and foreclosure is not the
only option. If your mortgage lender or
servicer will not work with you to
reduce your payment, you may want to
consider a short sale. Agents like me,
with the Certified Distressed Property
Expert® Designation, have undergone
extensive training that outlines the process
of how to
negotiate short sales. A short sale
allows you to sell your home for less
than what you owe and avoid foreclosure.
What is
a Home Affordable Refinance?
If Fannie
Mae or Freddie Mac owns your mortgage,
you may be eligible for a Home
Affordable Refinance. This will allow
you to refinance your home and often
lower your payments.
What are
the qualifications for a Home Affordable
Refinance?
According
to the resources released by the
government, following are a list of
qualifications:
- You
are the owner occupant of a one-to-four-unit home.
- The
loan on your property is owned or
securitized by Fannie Mae or Freddie
Mac.
- At
the time when you apply, you are current
on your mortgage payments (you
haven’t been more than 30 days late
on your mortgage payment in the last
12 months, or if you have had the
loan for less than 12 months, you
have never missed a payment).
- You
believe that the amount you owe on
your first mortgage is about the
same or slightly less than the
current value of your house.
- You
have income sufficient to support
the new mortgage payments, and the
refinance improves the long-term
affordability or stability of your
loan.
|
