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The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) declined in the first three months of 2012 to 5.78 percent. This improvement ends two quarters of increases that began in Q3 2011, according to TransUnion.
Prior to Q3 2011, 60-day mortgage delinquency rates had dropped for six consecutive quarters. This latest quarter brings the delinquency rate to its lowest point since Q1 2009.
Between fourth quarter 2011 and first quarter of 2012, all but eight states experienced decreases in their mortgage delinquency rates.
House prices continue to face downward pressure and unemployment remains high, but many see the economic environment beginning to show modest improvement. Therefore, TransUnion’s forecast predicts mortgage delinquency rates to drift downward in 2012 as more homeowners are able to repay their mortgage debt obligations.

http://www2.realtoractioncenter.com/site/R?i=zZZnyKfImNyQ8PmnDIDvaA

Bank of America has launched a nationwide program that offers delinquent mortgage customers increased assistance with relocation expenses – from $2,500 to $30,000 – at the completion of a qualifying short sale.
To qualify for the enhanced relocation assistance payments under the new program, the seller must work proactively with the bank to obtain a preapproved sales price prior to submitting a purchase offer to the bank.  A short sale must be initiated by the end of 2012 and close by Sept. 26, 2013, to be eligible for the payment.  Qualifying short sales that have already been started but have not closed may be eligible for the relocation assistance.
Initially, the program will be offered on mortgages that are owned and served by Bank of America.  Currently, the percentage of loans that qualify for the program is 8 percent nationwide.

http://www2.realtoractioncenter.com/site/R?i=9SkYMMUWJORJ5pAdh1CeLQ

Despite the fact that Americans overwhelmingly support homeownership, legislative and regulatory proposals now under consideration would greatly harm homeowners, home buyers, the housing market, and the nation’s economy, according to the National Association of Home Builders (NAHB). To that end, NAHB has launched a new website, www.ProtectHomeownership.com, to bring attention to the threats to homeownership and inspire the public to take action to protect it.
Tax, legislative, and regulatory policies currently under consideration would scale back or eliminate the mortgage interest deduction and make mortgages and small business loans unaffordable and even more difficult to obtain.
ProtectHomesownership.com explains some of these threats and documents homeownership’s importance to individual households and to local, state, and national economies through an FAQ, poll data, economic analysis, and reports.
The site also provides multiple ways for the public to take positive action to protect this very important aspect of American life. These include an online petition urging policymakers to keep housing a national priority, information about how to participate in homeownership rallies that are being held in a number of communities in 2012, and links to social media communities on Facebook.com/ProtectHomeownership and Twitter.com/4Homeownership.

http://www2.realtoractioncenter.com/site/R?i=0NnYhybBaVL82sjh-4RSeA

The Sacramento Bee
Nearly five years after the housing bust began, government programs to help those who are underwater on their mortgages, unemployed, or unable to make their payments are kicking into gear.
Read the full story
http://www.sacbee.com/2012/04/22/4430747/aid-for-troubled-mortgages-has.html

The Washington Post
With home prices at historic lows and rental rates on the rise, a growing number of investors with cash to spare are seeking lucrative returns by gobbling up foreclosures in distressed markets across the country and turning them into rentals.
Read the full story
http://www.washingtonpost.com/business/economy/housing-downturn-spurs-a-boom-in-foreclosure-to-rental-conversions/2012/04/24/gIQAFWUZeT_story.html?hpid=z2

Freddie Mac reported this week that 79 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table in the first quarter of 2012.
Of these borrowers, 58 percent maintained about the same loan amount, and 21 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 26-year history of the analysis.
“Cash-out” borrowers, those who increased their loan balance by at least five percent, represented 21 percent of all refinance loans; the weighted average cash-out share during the 1985 to 2008 period was 50 percent.
The median interest rate reduction for a 30-year fixed-rate mortgage was about 1.5 percentage points, or a savings of about 27 percent in interest rate, the largest percent reduction recorded in the 27 years of analysis. Over the first year of the refinance loan life, the median borrower will save about $2,900 in interest payments on a $200,000 loan.

http://www2.realtoractioncenter.com/site/R?i=1w8sWhgcjEnVkWSmcc_UQQ

With the recent landmark National Mortgage Settlement between the nation’s five largest real estate loan servicers and state attorneys general over faulty foreclosure practices, troubled homeowners are at risk of falling victim to scam artists offering mortgage modification and other foreclosure prevention services.
C.A.R. wants to help consumers from being defrauded and has launched a special section on car.org with information about forclosure-prevention, short sale, and other types of mortgage-related fraud, along with information on where to get help and where to report suspected cases of fraud.

http://www2.realtoractioncenter.com/site/R?i=K6Gb5mN3CidEVn8uFsKfiA

The Sacramento Bee
Nearly five years after the housing bust began, government programs to help those who are underwater on their mortgages, unemployed, or unable to make their payments are kicking into gear.
Read the full story
http://www.sacbee.com/2012/04/22/4430747/aid-for-troubled-mortgages-has.html

The Financial Crimes Enforcement Network has released its full year 2011 update of mortgage loan fraud reported suspicious activity reports (MLF SARs), which shows financial institutions submitted 92,028 MLF SARs last year, a 31 percent increase compared with the 70,472 submitted in 2010. The increase can be primarily attributed to mortgage repurchase demands.
Financial institutions submitted 17,050 MLF SARs in the 2011 fourth quarter, a 9 percent decrease in filings compared with the same period in 2010 when financial institutions filed 18,759 MLF SARs. While too soon to call a trend, the fourth quarter of 2011 was the first time since the fourth quarter of 2010, when filings of MLF SARs had fallen from the previous year. FinCEN also updated its SAR data sets used in the report.

The Los Angeles Times
The Consumer Financial Protection Bureau is considering tough rules for home loan servicers, including more easily understood statements and warnings before interest rate changes.
Read the full story
http://www.latimes.com/business/la-fi-bank-rules-20120410,0,7307695.story

This alert is written to warn consumers about marketing companies, unlicensed entities, lawyers, and so-called attorney-backed, attorney-affiliated, and lawyer referral entities that offer and sell false hope and request the payment of upfront fees for so-called “mass joinder” or class litigation that will supposedly result in extraordinary home mortgage relief.
More info

The New York Times
With interest rates at historically low levels, many borrowers are finding value with a reliable fixed-rate mortgage.  However, borrowers who think they could be relocating in the near future, or need to shore up savings, might want to consider what some regard as the next best thing: An adjustable-rate mortgage that offers several years at a fixed interest rate.
Making sense of the story

Hybrid adjustable-rate mortgages, or ARMs, originated in the jumbo-loan marketplace at the end of the 1980s.  They fell out of favor – along with the riskier ARMs that offered extremely low teaser rates and interest-only components – after the subprime mortgage market collapsed.
Some adjustable-rate mortgages have an interest rate that changed every year, but a hybrid – also known as a delayed first-adjustment ARM – has a fixed interest rate for a period of time.  Most loan officers refer to a hybrid by the period during which the rate is fixed.  A 5/1 loan, for example, has a fixed rate for five years, then adjusts annually for the remainder of the term; a 7/1 loan adjusts after seven years.
ARMs account for only a small segment of the overall mortgage nowadays, financing just slightly more than 10 percent of home purchases.  However, market share for hybrid loans is expected to increase to 14 percent this year, according to an annual survey released last month by Freddie Mac.  The 5/1 hybrid was the most popular adjustable-rate loan product in the market, according to the survey.  The least popular was a 3/3 ARM, which adjusts once every three years.
A common reason for choosing a hybrid ARM is projected length of homeownership.  It’s a nice option for buyers who don’t expect to stay in their home for longer than three to five years.
Rates on hybrid ARMs are also attractive.  As of last week, the average rate on a 5/1 loan was 2.81 percent, compared with 3.88 percent for a 30-year fixed-rate loan, according to Freddie Mac.
Borrowers should be aware though that with rates starting at rock-bottom levels, there’s generally only one direction for them to go.  And even though there are caps on the rate change amount, the jump could be as much as six percentage points.

Read the full story
http://www.nytimes.com/2012/02/19/realestate/mortgages-a-fixed-rate-alternative.html

Borrowers seeking a review of their mortgage foreclosures under the Federal banking agencies’ Independent Foreclosure Review now have until July 31, 2012, to submit their requests.
The new deadline provides an additional three months for borrowers to request a review if they believe they suffered financial injury as a result of errors in foreclosure actions on their homes in 2009 or 2010 by one of the servicers covered by enforcement actions issued in April 2011.
Borrowers are eligible for an Independent Foreclosure Review if they meet the following basic criteria:
The mortgage loan was serviced by one of the participating mortgage servicers.
The mortgage loan was active in the foreclosure process between January 1, 2009, and December 31, 2010.
The property securing the mortgage loan was the borrower’s primary residence.
There are no costs associated with being included in the review. For more information, borrowers can call 888-952-9105, Monday through Friday, 8 a.m.-10 p.m. ET or Saturday, 8 a.m.-5 p.m. ET or visit www.federalreserve.gov/consumerinfo/independent-foreclosure-review.htm or www.occ.gov/independentforeclosurereview.

http://www.federalreserve.gov/newsevents/press/other/20120215a.htm

As you may know, there is a program to help homeowners who are having difficulty making their mortgage payments. The White House announced the Making Home Affordable program to help homeowners experiencing financial setbacks. The Making Home Affordable program (MHA) is a partnership between the mortgage industry and the federal government, designed to stabilize the housing market.
To see if you qualify for this program, visit www.makinghomeaffordable.gov.
The following documentation may be needed to determine if you meet the requirements for a workout solution (Be sure to include your account number on all documents):
A HARDSHIP LETTER  describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).  Completed and signed
Information about the monthly gross income of your household.

Copies of your two most recent pay stubs
Copy of your most recent quarterly profit and loss statement (if self-employed)
Award letter stating your Social Security, disability, or pension earnings (if applicable)
Your  last two years federal tax return (all pages including W-2′s, 1099, etc.)
Completed and signed IRS Form 4506T

Information about your assets & liabilities

Copies of your most recent last two bank statement (all accounts & all pages)
Information about any second mortgage on your 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.

Please be advised that you will be required to complete additional forms if you qualify for a loan modification. Completion of some of these same forms may be requested again under the requirements of the Making Home Affordable program, so please keep a copy of these forms for your records for easy access.
The following is an excerpt from a U.S. Treasury Department document titled “Making Home Affordable: Borrower Q&As” that explains some frequently asked questions about the program.
Can Making Home Affordable help me if my loan is not owned or securitized by Fannie Mae or Freddie Mac?
Yes. Making Home Affordable offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage servicers with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
How do I know if I qualify for a Home Affordable Modification?
To apply for a Home Affordable Modification, you must:

Be an owner-occupant in a one to four unit property, and have
An unpaid principal balance that is equal to or less than $729,750 (for one unit properties and higher for two to four unit properties (consult your servicer),
A loan that was originated before January 1, 2009,
A mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31% of your gross (pre-tax) monthly income, and
Have a mortgage payment that is no longer affordable, perhaps because of a significant change in income or expenses.

If you answered YES to all of these questions, you are eligible to apply for a Home Affordable Modification. Only your servicer will be able to tell you if you qualify.
Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification?
No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default, for example, because they have had or will soon have a significant increase in their mortgage payment that they cannot afford. If you have had or anticipate a significant increase in your mortgage payment or have had a significant reduction in income, contact your servicer. If you meet the minimum eligibility criteria for a Home Affordable Modification, your servicer is required to evaluate your loan to see if you are at risk of imminent default.
I have missed some mortgage payments am I eligible?
If you answered yes to the questions above, have missed two or more mortgage payments and your servicer is participating in the Making Home Affordable Program, your servicer must evaluate your loan to determine if you qualify for a modification.
I have a second mortgage. Am I still eligible?
Yes, but only the first mortgage is eligible for a modification.
How do I know if my servicer is participating? Are all servicers required to participate?
Servicer participation in the program is voluntary. However, the government is offering substantial incentives to servicers and investors, and it is expected that most major servicers will participate. Participating servicers will sign a contract with Treasury’s financial agent, through which they agree to review every potentially eligible borrower who calls or writes asking to be considered for the program.
As contracts are signed, a list of participating servicers will be available on the Internet at www.FinancialStability.gov. Participation will be mandatory for any servicer that accepts future funding from the Treasury’s Financial Stability Program.
What will my servicer do to determine if I qualify?
Your servicer will:

Determine that your loan meets the minimum eligibility criteria (owner occupied, originated before January 1, 2009, UPB equal to or less than $729,750). If yes:
Obtain sufficient income information to determine if your monthly mortgage payment is more than 31% (approximately 1/3) of your gross or pre-tax monthly income. (Your servicer may initially accept verbal information about your income, but eventually you will need to provide proof of income in the form of tax returns and pay stubs). If yes:
Add past due charges (interest, taxes, insurance and costs that your lender paid to other parties on your behalf – but not late fees, those must be waived) to the loan balance.
Determine how much of an interest rate reduction will be required to get your mortgage payment down to a point where it is about 31% of your gross monthly income.
Apply a test to determine if the cost of the modification (including the government’s incentive payments) is less costly for the investor than a foreclosure. If yes:
Put you on a trial modification for three months at the new interest rate and payment.
If you successfully make the payments and are current at the end of the trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years.
The modification payment will also include a monthly amount to be set aside (escrowed) to pay taxes and insurance when they become due. This escrow is required even if your prior loan was not escrowed.

What happens after five years?
If the modified interest rate is below the market rate, the modified rate will be fixed for a minimum of five years as specified in your modification agreement. Beginning in year six, the rate may increase no more than one percentage point per year until it reaches the rate cap indicated in your modification agreement. The cap is equal to the prevailing market interest rate on the date the modification is finalized as published by Freddie Mac based on a survey of its customers. This cap means that your rate can never be higher than the market rate on the day your loan was modified. If the modified rate is at or above the prevailing market rate, the modified rate will be fixed for the life of the loan.
How low can my interest rate go?
Treasury is providing incentives to your investor to write the interest down as low as 2%, if necessary to get to a payment that you can afford based on your income.
What happens if that is not enough to get to an affordable payment?
If a 2% interest rate does not result in a payment that is affordable (31% of your gross monthly income), your servicer will:

·First try to extend your payment term. At the servicer’s option your payments could be extended out to 40 years.
·If that is still not sufficient your servicer will defer repayment on a portion of the amount you owe until a later time. This is called a principal forbearance.
·A portion of the debt could also be forgiven. This is optional on the part of the investor. There is no requirement for principal forgiveness.

Could I end up with a balloon payment?
Yes. If your servicer determines that a principal forbearance is required to get your monthly payment to an affordable level, the amount of the forbearance. Say for example this was $20,000, would be subtracted from the amount used to calculate your monthly mortgage payment, but you would still owe the money. You would have a $20,000 balloon payment that had no interest and was not due until you paid off your loan, refinanced or sold your house.
How much will a modification cost me?
There is no cost to borrowers for a Home Affordable Modification. Your servicer will not ask you for money. If there are costs associated with the modification, such as payment of back taxes, your servicer will add those costs on to the amount you owe. Your servicer will also forgive any late fees.
If you would like assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a counseling fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
Is housing counseling required under this program?
Borrowers, especially delinquent borrowers are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan. These services are free. However, housing counseling is only required for borrowers whose total monthly debts are very high in relation their incomes, and it is voluntary for others.
When you apply for a Home Affordable Modification, your servicer will analyze your monthly debts, including the amount you will owe on the new mortgage payment after it is modified, as well as payments on a second mortgage, car loans, credit cards, or child support. If the sum of all of these recurring monthly expenses is equal to or more than 55% of your gross monthly income, you must agree to participate in housing counseling provided by a HUD-approved housing counselor as a condition of getting the modification.
I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. Borrowers who make timely payments on their modified loans will receive success incentives. For every month you make a payment on time, Treasury will pay an incentive that reduces the principal balance on your loan. Over five years the total principal reduction could add up to $5,000. This contribution by the Treasury will help you build equity faster.
I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for a Home Affordable Modification?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage servicer will check to see if the dwelling is your primary residence.
I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on two, three, and four unit properties are eligible as long as you live in one unit as your primary residence.
I have two mortgages. Will a Making Home Affordable Modification reduce the payments on both?
Only the first mortgage is eligible for a modification.
I owe more than my house is worth. Will a Home Affordable Modification reduce what I owe?
The primary objective of the Making Home Affordable Program is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Investors may, but are not required to, offer principal reductions. However, it is more likely that your servicer will use interest rate reductions in order to make your payment affordable.
I have an FHA loan. Can it be modified under the making Home Affordable Program? Are all loans eligible?
Most conventional loans including prime, subprime, adjustable, loans owned by Fannie Mae, Freddie Mac, private lenders and most loans in mortgage backed securities are eligible for a Home Affordable Modification. The Administration is working with the Congress to enact legislation that will allow FHA, VA and USDA to offer modifications consistent with Making Home Affordable in the near future. Currently loans insured or guaranteed by these agencies are being modified under other programs that also enable borrowers to retain homeownership.
What should I do if my servicer tells me that the “investor” is not participating in Making Home Affordable?
As contracts with servicers and investors are signed, the list of participants will be posted at www.financialstability.gov. Borrowers should first check there to see if their servicer is listed. If so, you should call your servicer back and ask to speak to a supervisor or you may contact a HUD-approved housing counselor for assistance. If your servicer is not participating in the program, you should ask your servicer or a housing counselor about other workout options that may be available.
I’m already working with my servicer or a housing counselor on a loan workout. Can I still be considered for a Home Affordable Modification?
Yes. You should ask your servicer or counselor to explain the benefits of all available foreclosure prevention or payment reduction options. A Home Affordable Modification is one of many valuable tools available to your servicer. Other options may be more appropriate for your situation.
How do I apply for a modification under the Homeowner Affordability and Stability Plan?
If you meet the general eligibility criteria for the program, you should gather the financial documentation that your servicer will need to determine if you qualify. Once you have this information, you should call your mortgage servicer and ask to be considered for a Home Affordable Modification. The number is on your monthly mortgage bill or coupon book.
If your loan is current, please be patient. Treasury just published detailed program requirements on March 4, 2009, and it will take some time before servicers are fully operational. However, the Treasury has encouraged servicers to immediately begin reviewing the eligibility of delinquent borrowers that are at the greatest risk of foreclosure.
If you would like to speak to a housing counselor you can call 1-888-995-HOPE (4673). HUD-approved housing counselors can help you evaluate your income and expenses and understand your options. This counseling is FREE.
If you have already missed one or more mortgage payments and have not yet spoken to your servicer, call them immediately.
My loan is scheduled for foreclosure soon.  What should I do?
Many servicers have made a commitment to postpone foreclosure sales on all mortgages that meet the minimum eligibility criteria for a Home Affordable Modification until those loans can be fully evaluated.
However, borrowers whose loans have been scheduled for foreclosure or any borrower that has missed one or more mortgage payments and has not yet spoken to their servicer, should contact the servicer immediately. Borrowers may also contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).
If you are in danger of immediate foreclosure, call 888-995-HOPE – the Homeowner’s HOPE(TM) hotline and talk to a counselor who can help you assess your current situation and map out a solution.   Homeowner’s HOPE(TM) is a counseling service provided by the Homeownership Preservation Foundation, an independent non-profit that provides counseling services through HUD-approved counselors.
If all the above has failed you, give it a lot of thought in doing a Short Sale. DON’T WAIT UNTIL IT IS TOO LATE… Give us a call, if you have questions. (530) 391-7699  ask for Marian Velez, serving the Hwy 50 corridor between Sacramento & Placerville, CA. 
 Legal Notice and Disclaimer: The information presented or referenced are intended for informational use only and does not constitute the rendering of legal or tax advice or services. The accuracy of all information regardless of source is deemed reliable, but is not guaranteed. Always independently verify through personal inspection by and/or with the appropriate professionals. This information is not a substitute nor constitutes the rendering of legal, tax or other professional services. State, national and international laws vary, as do individual circumstances; so always consult legal, tax and/or appropriate professionals.   This is not intended as a solicitation if your property is currently listed with another agent. These materials may contain information and contain links to sites on the Internet owned and operated by third parties. We are not responsible for the availability of, or the content located on or through, any such third-party sites. We do not endorse the recommendations of any third party nor guarantee the information provided is complete or correct. Information is provided “as is” without warranty of any kind, either expressed or implied. The user assumes the entire risk as to the accuracy and the use of this information. We will not be liable for any damages of any kind arising from the use of this information, including, but not limited to direct, indirect, incidental, punitive, and consequential damages.

Avoiding Foreclosure: When a Lender Won’t Work with You
You have done all your homework,
explored your workout options,
talked to a housing counselor,
tried to talk to your lender…..
BUT, the lender won’t work with you….What do you do now?
Contact me of course!
If you’re facing a foreclosure and you want to avoid it, we may be able to find an alternative. You should consider other options as soon as you become concerned about your ability to make your payments. Don’t wait until you receive a notice of foreclosure. The sooner you call us to explore your options, the more that may be available to you.
 If you wish to NOT keep the property –
Sometimes the lender will offer “Cash for Keys” to homeowners or tenants who are victims of foreclosure or short sale in exchange for surrendering the keys and vacating. Lenders generally reach an agreement with the occupants, which stipulates the home will be left in good condition and cleaned. The agreements typically set forth a specific date that the home will be left vacant, including a promise from the occupants that they will not vandalize or strip appliances, fixtures, etc.
SHORT SALE OR EQUITY SALE – Working together, we can work out the best possible plan for your needs. If you have decided that you do not want to keep your property and are interested in doing a equity or short sale you can contact Marian Velez, Realtor® at (530) 391-7699 or email me at marian@marianvelez.com, for more information visit my website at: http://www.marianvelez.com
FORECLOSURE - You can just let it go to foreclosure. Basically you don’t do anything. Typically you will get evicted about 2-4 weeks after Trustee Sale. You may leave with nothing in hand and a foreclosure on your credit report. This is without question the worst option of all. Don’t let anyone convince you to just give up and do nothing. At least try something. You have nothing to lose. It could mean the difference between a few thousand dollars in your pocket compared to nothing and a foreclosure on your credit. Not to mention what another foreclosure on the market does to the neighborhood.
 If you wish to keep the property -
For Conventional Loan:  First talk to a HUD approved housing counselor (800) 569-4287 or go online to: http://www.hud.gov If you are facing foreclosure, search for a foreclosure avoidance counselor.
For FHA-insured loan:  Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA’s National Servicing Center toll free at (877) 622-8525 or go on line http://www.fha.com. Be prepared to provide the full name(s) of all persons listed on the mortgage loan and the city, state and zip of the property.  They may be able to help you more quickly if you can also provide your 13-digit FHA case number from the loan settlement statement.
For VA-insured loan:  When your loan goes into default, your servicer/holder is responsible for contacting you, the mortgagor, to determine the reason for the default and attempt to make arrangements to cure the delinquency. If the problem cannot be resolved by the time you are two payments past due, the servicer/holder is required to notify VA that your loan is in default. If you anticipate getting behind or are behind on your mortgage payments, VA may be able to help. Visit the VA Foreclosure Alternatives at http://www.va.gov/. If you need assistance or have additional questions, talk to a Loan Service Representative. 
For all loans:   You can also contact HOPE NOW at: http://www.hopenow.com or call the Homeowners Hope Hotline at: (888) 995-HOPE to ask for assistance in working with your lender.
Options to avoid foreclosure -
 1.     Reinstatement – Pay the Delinquency – A reinstatement is the simplest solution for a foreclosure; however it is often the most difficult. The homeowner simply requests the total amount owed to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale. You may be allowed to reinstate or make the loan current by paying a lump sum or making scheduled payments to your lender over a given amount of time. Just explain to them you had a few bad months and things are now better and most lenders will try to work something out with you. 
 2.     Forbearance – Your mortgage company may be able to arrange a repayment plan based on your financial situation. They may provide for a temporary reduction or suspension of your payments.  You either make reduced mortgage payments or no payments for a period of time (generally three months) to give you a chance to get back on your feet during a temporary hardship. The missed payments are then repaid through a repayment plan where you would resume making your normal monthly payments plus an additional amount over time.
 3.     Refinance – If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.
 4.     Loan/Mortgage Modification – If there is lots of equity in your home and you’re not too far behind on payments, this is a great option. The goal of these programs is to modify your home loan, making the monthly payments affordable and sustainable so that you may be able to avoid foreclosure.  Your mortgage company may reduce the interest rate on the loan, may move you from an adjustable-rate mortgage into a fixed rate loan, reduce the principal balance of the loan, extend the term of the loan, or any combination of these. Usually the lender would refinance the existing loan and include as part of the new loan any late payments, and fees. It would all be “wrapped” into one mortgage. The challenge that most homeowners have is they have leveraged their home to the max. Therefore, very little equity is in the home especially when you add on back payments and fees so it becomes very difficult to refinance.
 5.     Home Affordable Modification Program (HAMP) – (Part of the federal government’s Making Home Affordable program) If you have an FHA loan and you qualify, you may be able to restructure your mortgage payments to make them more affordable. http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/hamp.aspx
          HAMP lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable. The typical HAMP modification results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.
        PROGRAM ELIGIBILITY – You may be eligible to apply if you meet all of the following:

You occupy the house as your primary residence.
You obtained your mortgage on or before January 1, 2009.
You have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
You owe up to $729,750 on your home.
You have a financial hardship and are either delinquent or in danger of falling behind.
You have sufficient, documented income to support the modified payment.
You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

6.     Home Affordable Refinance Program (HARP) – (Part of the federal government’s Making Home Affordable Program) May help you qualify to refinance your mortgage and take advantage of lower rates. Page ContentIf you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined lower than the total you owe on it. HARP is designed to help you refinance into a new affordable, more stable mortgage. The HARP loan is a new loan and will require a loan application and underwriting process. Loan refinance fees will apply.
         PROGRAM ELIGIBILITY - You may be eligible to apply if you meet all of the following:

You have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac.
You do not have an FHA, VA or USDA loan.
You are current on your mortgage payments and have not been more than 30 days late making a payment over the last year.
You owe more than the home is worth, but your mortgage does not exceed 125 percent of the current market value of your home.
The refinance will improve the long-term affordability or stability of your mortgage.
You have the ability to make the new payments.

       *NOTE: Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you qualify for HARP.
       PROGRAM AVAILABILITY – The HARP program is offered by many servicers. Homeowners should check with their mortgage servicer (the company to which homeowners        make their mortgage payments) to determine if they are participating in HARP. If their mortgage servicer is not participating, the homeowner may contact other lenders that      participate in HARP to determine if they are eligible for a refinance. Program Dates Effective March 2009 – June 30, 2012
       STEPS TO HARP REFINANCE -

Determine whether your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac by visiting their respective Loan Lookup tools.
Contact your current mortgage servicer or another that is approved by Fannie Mae or Freddie Mac to inquire about HARP.
Compare rates and costs with additional mortgage companies to ensure best refinance terms.

7.     Home Affordable Unemployment Program – (Part of the federal government’s Making Home Affordable program) This program is designed to help homeowners who are unemployed. If you are currently unemployed and struggling to make your mortgage payments, you may qualify for a period of at least three months of suspended payments while you look for new employment.
8.     Home Affordable Modification Program Military Modification – (Part of the federal government’s Making Home Affordable program) If you’re a military service member having difficulty making your mortgage payments, you may be eligible for assistance, including principal forgiveness.
You should also beware of one other thing that can halt foreclosure. It is called the Soldier Relief Act of 1940. When a property is owned by a person who is in the military and the mortgage payments are not made, then this relief act may stop foreclosure based on certain criteria. The person has to be in active duty in order to qualify. The mortgage loan had to be established before the soldier was called out to active duty. Not only will this stop foreclosure, but it will stop seizure of any personal property while the soldier is actively serving and several months thereafter.
9.     Partial Claim – Your mortgage company may be able to work with you to obtain an interest free loan from HUD to bring your mortgage current. HUD will pay your mortgage company the amount necessary to bring your mortgage current. You must execute an interest free Promissory Note, and a Lien will be placed on your property until paid in full, property is sold or you leave the property.
10.  HOPE for Homeowners Program – The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments and are at risk of foreclosure but can afford a new loan insured by HUD’s Federal Housing Administration. The program is effective from October 1, 2008 to September 30, 2011.
11.  Rent the Property – A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, can convert their property to a rental and use the rental income to pay the mortgage.
12.  Sell the Property - You can list your home with a realtor or try to sell it yourself. If you have equity in the property this can be a great option. However, if you have little equity, it would be a “Short Sale”. The goal of a short sale is to help you avoid foreclosure if you are no longer able to retain the property. If a homeowner owes more on their property than it is currently worth, then they can hire a real estate agent to market and sell their property through the negotiation of a short sale with their lender. In the short sale process, you sell your property with lender approval and settle your mortgage debt for less than the amount that you owe.
13.  Deed in Lieu of Foreclosure – You may voluntarily “give back” your property to the mortgage company. If there are no other liens on the title, the lender may agree to take the property back. This option lets you avoid going through the foreclosure process by signing the deed to your property over to your lender. A deed in lieu of foreclosure does not protect your credit, nor will it cut off the rights of junior lien holders. In other words, the lender would take the property back subject to the junior lien holders. So if you have equity in the property this is not a good option. You will give up all rights to receive any surplus. A deed in lieu can negatively affect your credit score, but the impact is generally less severe than a foreclosure.
Many foreclosures can be avoided, particularly when all parties work together.  You should be prepared to discuss:

The reason you are, or will soon be, in default
Your current financial and employment situation
Whether you or someone else occupies the property
Whether or not you wish to keep the property

We hope this information is helpful and with this knowledge you now can make the right decision about your property, good luck, the best to you… Give us a call, if you have questions  (530) 391-7699 ask for Marian Velez, serving the Hwy 50 corridor between Sacramento & Placerville, CA. 
Legal Notice and disclaimer: The information presented or referenced are intended for informational use only and does not constitute the rendering of legal or tax advice or services. The accuracy of all information regardless of source is deemed reliable, but is not guaranteed. Always independently verify through personal inspection by and/or with the appropriate professionals. This information is not a substitute nor constitutes the rendering of legal, tax or other professional services. State, national and international laws vary, as do individual circumstances; so always consult legal, tax and/or appropriate professionals. This is not intended as a solicitation if your property is currently listed with another agent. These materials may contain information and contain links to sites on the Internet owned and operated by third parties. We are not responsible for the availability of, or the content located on or through, any such third-party sites. We do not endorse the recommendations of any third party nor guarantee the information provided is complete or correct. Information is provided “as is” without warranty of any kind, either expressed or implied. The user assumes the entire risk as to the accuracy and the use of this information. We will not be liable for any damages of any kind arising from the use of this information, including, but not limited to direct, indirect, incidental, punitive, and consequential damages.