1.8 million homes were foreclosed in 2008. Millions of homeowners are expected to enter into foreclosure in 2009 and 2010. Rather than face foreclosure and suffer an eviction from your home, is there anything you can do to prevent the situation from escalating?
Indeed, there is! You can ask to change the terms of your mortgage. Mortgage lenders are not in the business of repossessing and re-selling homes. The cost of foreclosure with attorney’s fees and lost income is just too much for a lender’s bottom line. It is in the lender’s best interest to change the mortgage terms so that they continue to earn interest from your home purchase.
Step One: Open Communications with Your Lender
The first step is to call your loan servicer and discuss your current financial situation. If you have experienced a drop in income, or other bills have piled on so that your current mortgage payment is not sustainable, let them know that you would like to discuss a loan modification.
Typically, a lender will require you to go through another underwriting process where they will evaluate your situation. They will ask for your income verification and IRS tax filings. The lender will pull a credit history report, as well as require a home appraisal usually at your cost. If you want to ask for a loan modification, be sure to have all possible paperwork and documentation at the ready. Even after submitting copies of your paperwork, it is likely that the underwriter will ask for additional documentation. The faster you can respond to these requests, the quicker he will be able to make a decision.
Step Two: What Factors the Lender Considers
The loan modification underwriter must determine whether changing your loan terms will still meet the lender’s investment objectives and parameters. They will check to see if your debt to income ratio has changed, and if so, whether a new, lower interest rate will help lower a mortgage payment to one more affordable to you. Sometime a lower interest rate does not fit with their loan parameters. However, even if the new loan terms are not within the typical parameters of their loan objectives, remember that a possible alternative is foreclosure. Mortgage companies will take that into special consideration if they want to avoid foreclosing.
Step Three: The Payment Reduction Scenarios
If you are granted a loan modification to lower monthly payments, it may occur through several possibilities. The best situation (but worst for the lender) is that they could lower your interest rate. This would help lower your monthly payments by hundreds of dollars.
If you have paid a considerable amount down from your principal balance, they may just extend the current term and re-amortize. For instance, if you had a $200,000, 30-yr mortgage with an interest rate of 7%, your monthly payment is $1331. If your balance was down to $175,000, you could extend your mortgage to another 30 years and lower your payment to $1164. That’s a savings of $167 per month, and it could be even lower if the interest rate is reduced as well.
Another possibility is that the mortgage company may extend forbearance on your mortgage payment for a limited time. With forbearance, you are not required to make monthly payments for a period of time; however, interest will still accrue and be added onto the principal balance. Though you could end up paying more for this type of modification in the end, it could certainly save you from entering foreclosure in a time of financial crisis.
How Long the Process Takes
If your lender is willing to listen and re-negotiate your mortgage, and you have the required paperwork ready, you could have a decision within a matter of weeks. If there are delays due to needed documentation, or required fixes found from a home appraisal and inspection, you may have to wait a month or two until everything has been approved to the lender’s satisfaction. The best strategy is to be flexible and agree to meet the demands of the lender.
This article is intended for general information. Always seek sound financial and legal advice before making any financial decision.
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Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9882.shtml
Monday 20 April 2009
Tuesday 7 April 2009
Time to Review Your Goals and Business Plan
It is the end of the first quarter and time to check the score.
Just as planning your goals for the coming year should always begin with a look back at the year in review, so planning your business for the rest of this year should take a look back at the first quarter. Business planning isn’t just a numbers game, but also an accounting and analysis of the year’s overall progress.
Begin by asking the hard questions:
• What happened in your business this past year? Past quarter?
• Did you meet your goals? If not, why not?
• How did you accomplish your successful goals?
• Where did your business come from?
From there, analyze the specific sources of success or failure.
• Were your lead systems facilitating your goals?
• Did the number of listings support the number of closed transactions?
And yes, now analyze the numbers: closed sales, closed commissions, expenses, how many listings taken, how many listings sold, how many active? Quantify where the business came from in comparison to your goals: how many sales from sphere? Referrals? Websites? Print media? Signs? Other lead-generating systems?
Also take a look at the team. Who do you have working with you and what are their roles? Did they support last year’s business? Did they reach their goals? Were their goals congruous with your business plan? And let’s not forget that important last count: the one where you evaluate yourself, including how many hours you worked per week and how much vacation time you took during the course of the year or quarter.
Think of this business in review task as a report to imaginary shareholders in the business. They would need a reminder of last year’s goals, a comparison to the actual numbers, an analysis of the year’s operations and relative success, and an evaluation, ultimately, of your business strategy. The success of the past year forms the basis of your business plan for the next. You are able to determine if you need to completely overhaul your “to-do” list or merely fine-tune it. You are able to focus on the past year’s strengths in order to maximize their results for the future. You are also able to isolate weaknesses or “misses” and problem-solve them to a positive resolution.
The business “flashback” in review cannot be ignored if you hope to continue to grow your business into tomorrow. The necessary steps to planning for that future can only happen once you’ve seen what came before. That is when you learn not just from your mistakes, but from your successes. It’s then you can set the new goal and create the plan. It’s then you can focus your time and resources. It’s then you can make accountability a part of the process. It’s then you can move forward with the confidence that you have planned for an incredible year ahead.
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Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9936.shtml
Just as planning your goals for the coming year should always begin with a look back at the year in review, so planning your business for the rest of this year should take a look back at the first quarter. Business planning isn’t just a numbers game, but also an accounting and analysis of the year’s overall progress.
Begin by asking the hard questions:
• What happened in your business this past year? Past quarter?
• Did you meet your goals? If not, why not?
• How did you accomplish your successful goals?
• Where did your business come from?
From there, analyze the specific sources of success or failure.
• Were your lead systems facilitating your goals?
• Did the number of listings support the number of closed transactions?
And yes, now analyze the numbers: closed sales, closed commissions, expenses, how many listings taken, how many listings sold, how many active? Quantify where the business came from in comparison to your goals: how many sales from sphere? Referrals? Websites? Print media? Signs? Other lead-generating systems?
Also take a look at the team. Who do you have working with you and what are their roles? Did they support last year’s business? Did they reach their goals? Were their goals congruous with your business plan? And let’s not forget that important last count: the one where you evaluate yourself, including how many hours you worked per week and how much vacation time you took during the course of the year or quarter.
Think of this business in review task as a report to imaginary shareholders in the business. They would need a reminder of last year’s goals, a comparison to the actual numbers, an analysis of the year’s operations and relative success, and an evaluation, ultimately, of your business strategy. The success of the past year forms the basis of your business plan for the next. You are able to determine if you need to completely overhaul your “to-do” list or merely fine-tune it. You are able to focus on the past year’s strengths in order to maximize their results for the future. You are also able to isolate weaknesses or “misses” and problem-solve them to a positive resolution.
The business “flashback” in review cannot be ignored if you hope to continue to grow your business into tomorrow. The necessary steps to planning for that future can only happen once you’ve seen what came before. That is when you learn not just from your mistakes, but from your successes. It’s then you can set the new goal and create the plan. It’s then you can focus your time and resources. It’s then you can make accountability a part of the process. It’s then you can move forward with the confidence that you have planned for an incredible year ahead.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9936.shtml
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