Loan Modification’s and New Financial Reform
By Sandy Flores
Instructor in real estate in the Santa Ana College
The recently approved new Financial Reform Act Help for homeowners who are facing foreclosure further broadens the participation of banks and helps homeowners retain their properties.
Homeowners who have difficulty making their payments and are experiencing financial difficulties are eligible for HAMP, Capacity and Stability Program to Pay Homeowners programs – Making Home Affordable. These programs offer loan modification help you need if the homeowner qualifies for payments more affordable.
Initially incorporated HAMP programs applying for refinancing those loans where Fannie Mae and Freddie Mac owned or loans that were insured by these companies. We know that Fannie Mae and Freddie Mac have roughly about 58 percent of mortgage loans between themselves and insured. That is roughly 31 million loans, of which 20 percent are experiencing failure in repayment capacity.
The new (Unemployment Mortgage Assistance) UMA program, which provides assistance to homeowners who are unemployed is also one of the most anticipated programs for those who are currently facing foreclosure. This program will allow financial assistance to make their mortgage payments while they find work.
Other important points that were incorporated in the new law of economic reform were:
The creation of an exclusive agency for consumer protection to verify that financial institutions strictly comply with regulations on home loans and other financial products.
More relief funds to assist the stabilization of communities and borrowers whose property was foreclosed.
The HAFA Program to facilitate a short sale or deeds in lieu of foreclosure for borrowers who do not meet the requirements for a loan modification.
The government will provide funds to encourage financial institutions to help subsidize borrower relocation expenses.
More government funds to provide more information and advice to consumers.
New standards in qualifying borrowers to ensure they comply with the minimum requirements on the ability to repay their loans.
High fees for mortgage loans granted are prohibited.
Protection on prepayment penalties on mortgage loans and abusive lending rates.
Improved data information. HMDA (Home Mortgage Disclosure Data) including the terms and conditions of the loan and the borrower’s age.
Creating a database that allows reporting to banks in the event that defaults on mortgage payments begin to increase, to avoid a massive foreclosure activity.
Creating a database of records HAMP. Increasing the responsibility and commitment of financial institutions for owners who need help and are facing foreclosure.
No more bailout money to the banks of the tax payers.
Even if your property is scheduled for a foreclosure, you have options. Learn and take advice on all options available and at your disposal on assistance programs for homeowners. Many of these programs have expiration dates, so the time factor is the most basic and crucial to achieve this. Avoid being a victim of mortgage fraud!