Long time Harris Real Estate University Students know that the problem isn’t the payment…its the principle. Today the FHFA announced a new program to assist homeowners. Note that this does not include principal reduction as a solution. This new plan is limited to: “extending the term, reducing the interest rate, and forbearing interest”
Harris Real Estate University will be announcing a new people-helping…money-making opportunity for agents over the next few weeks….doing loan mods! Watch the free video now how to start your own loan modification business.
Lets be super clear about this next point..
There will be no slow down for the demand for Agents who know how to do short sales…and of course, the REO listings will continue to surge.
This is intended to help “thousands” (a drop in the bucket unless it is several hundred thousand), and seems to encourage homeowners to stop making payments until they are 90 days late.
Helpful questions and answers:
Tags: agent short sale secrets, how to do a loan modification, loan modification training, real estate training, realtor coaching, realtor short sale trainingQ: What is a streamlined modification?
A: A streamlined modification is a modification that requires less documentation and less processing. In this case, the streamlined modification seeks to create a monthly mortgage payment that is sustainable for troubled borrowers by targeting a benchmark ratio of housing payment to monthly gross household income.
Q: What is the benchmark ratio?
A: This is the first time the industry has agreed on an industry standard. The benchmark ratio for calculating the affordable payment is 38 percent of monthly gross household income. Once the affordable payment is determined, there are several steps the servicer can take to create that payment – extending the term, reducing the interest rate, and forbearing interest. In the event that the affordable payment is still beyond the borrower’s means, the borrower’s situation will be reviewed on a case-by-case basis using a cash flow budget.
Q: Why is it necessary?
A: With the rise in serious delinquencies and increasing number of loans in foreclosure, this program will help borrowers who have missed three or more payments, but want to keep their homes. Because the eligibility requirements and process are streamlined and consistent, the program will allow servicers to reach more borrowers more quickly.
Q: Who is eligible?
A: The highest risk borrower, who has missed three payments or more, owns and occupies the property as a primary residence, and has not filed bankruptcy. The loan is a Freddie Mac, Fannie Mae or portfolio loan with participating investors. To qualify for the streamlined modification, the borrower must certify that he or she experienced a hardship or change in financial circumstances, and did not purposely default to obtain a modification.
Q: Why must the borrower be 90 days delinquent? Why not earlier in the delinquency cycle?
A: This is a streamlined solution targeted to reach the most at risk borrower. For borrowers who do not qualify, other solutions are available. This in no way substitutes for the meaningful efforts by all servicers and investors that are currently in place. The 212,000 workouts reported by HOPE NOIW in September are testimony to that fact. We will continue to see those efforts produce meaningful results.
Q: How many people will this help?
A: While difficult to assess, it is clear delinquencies are predicted to continue well into 2009. Foreclosure estimates are significant. Having a streamlined approach will assist many borrowers who default and more quickly. We estimate this will ultimately help thousands of borrowers.
Q: How do borrowers apply?
A: To be considered for the program, a seriously delinquent borrower should contact his or her servicer and provide the requested information – monthly gross household income, association dues and fees, and a hardship statement.
Q: How do borrowers complete the modification process?
A: Upon receiving the Modification Agreement from the servicer, the borrower signs it and returns it with the 1st payment at the modified terms along with income verification. Once the borrower makes three payments at the modified terms and the account is current as of day 90 of the modified plan, the modification is complete.
Q: When will servicers start offering this program?
A: We expect that by December 15th, servicers will be positioned to work with eligible borrowers.
{ 5 comments… read them below or add one }
Looking forward to the New Loan Modification program, from Harris Real Estate University!
So, the balance is still the same or more or may be a little less. What happens when the borrower needs to move or sell in a year or two? Will it be a short sale then?
What about those homeowners who couldn’t make their payments and therefore rented the place but now don’t qualify? what about all those “dirty” investors who all their lives bought, fixed and rented out properties so they could retire on the income when they get older? Those people are now going
broke and their retirement alongside with them. Ah, but they are getting what they deserve, after all they are the ones who brought us to this place
right? WRONG FOR THE MOST PART! Who brought us to this place foremost is the securitization and derivatives of those securities which are the
brainchildren of financial institutions. And guess what, those are the ones getting bailed out now. So this really is a double whammy for the guy at the bottom, us taxpayers.
Has anyone done the math of simply bringing everyone’s mortgage to today’s values and then taking off 20% since we still aren’t at the bottom? Perhaps 700 billion isn’t enough to bring everybody’s mortgage to this benchmark but it would be interesting to see where that would take us.
I have been in the loan modification business for over 7 years and right now this is the busiest ever with all these NEW companies opening up. Here are a few guidelines
Never ever pay anything upfront! As long as you can provide the paper work that is needed any legit company can tell you within 48 hours what they can do for you. Right now you can get 4% over prime (prime is 1%) and you can get delinquent fees dismissed and the new loan amount will be on the assessed value of the home not what you owed on it( that is where the $700 billion bail program comes from, it will pay the difference to the banks) and that is why banks will work with companies like mine. I would do all the negations for you come back in 24-48 hours with a deal if you like it then i get paid (usually 2k per case) and then we do all the filing for you and get the work finalized
I am interested in becoming a loan modification agent. I have 8 years in the consumer finance industry and enjoy helping customers and managing business relationships. Please contact me if I can be of service to your organization.
Sherman
So whats the status on the new training for Loan Modifications for HarrisREU?
I checked the course listing but as of today - it is not listed.
Thanks