Loan Modification Program in Redding, Ca This Thursday
This coming Thursday, November 20, 2008 at the Redding Main Library, we will be holding a seminar on Loan Modification Programs. The public is invited, especially those that think they may be at risk in terms of losing their home due to foreclosure. The following is a synopsis of what will be covered at the seminar. * Loan Modification o Loan Modification - 99% of all “A” type lenders and 70% of sub-prime lenders (with high interest rates) will negotiate a loan modification where most of the delinquent payments and foreclosure fees are either wiped out or added onto the back end of the loan. Payments can remain approximately the same. In most cases the interest rate will be reduced permanently. * Interest Rate / Payment Rate Reduction o With the increase of interest rates on home loans many homeowners with adjustable rate loans are faced with mortgage payments they can no longer afford. Our job is to convince the current lender that it is better to lower the homeowner’s payment by lowering the interest rate or payment rate by creating a payment plan the borrower can afford, than to take the home with a foreclosure sale and lose money on the re-sale. Keep in mind lenders lose money on bank owned properties as it will sell for less than market value, and they must pay a commission to a Realtor; and closing cost plus the cost of holding the property while they wait for a sale in a market that is depreciating. We need to prove to the lender what the maximum payment is that borrower can afford by constructing a financial plan for the homeowner that the lender will approve. Also as the homeowner is often late with their payments and in foreclosure or soon to be in foreclosure, we need to ask the lender to forgive the delinquent payments or put them on the back of the loan. A rate reduction in most cases is the only possibility for a homeowner to retain their home o Note: the success rate on a workout program without a rate reduction is 97%. Note: If we can prove you owe more that the value of the property and there is a second loan, we can convince that second lender to take a major reduction –of 50% to 80% — off the balance of the loan. * Principal Reduction o When a property is upside down and the homeowner is facing foreclosure, the homeowner has more leverage than they may realize against their lender. It is our job to force that leverage upon that lender. In doing so, we are successful in wiping out large portions of principle. Typically 50-80% on seconds. In today’s market, we can also convince the lender of first lien holders to lower the principle amount to the present market value. (ex: a homeowner owes $600,000 on first but the appraised value is $500,000. We can convince the lender to lower the loan amount to $500,000.) That is a $100,000 reduction in principle for the client. For questions on this subject, or if you want input on your mortgage situation, plan on attending the seminar this Thursday at the Main Library in Redding at 7 PM.
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