“The Obama administration is trying to simplify the paperwork for people seeking lower home-mortgage payments in an effort to avert more foreclosures.

The Treasury outlined new guidelines Thursday aimed at streamlining requirements for mortgage relief under the administration’s Home Affordable Modification Program launched a year ago.

The guidelines specify that borrowers must provide three items to loan servicers, the companies that collect mortgage payments: a form requesting a loan modification, authorization for the servicer to seek tax information from the Internal Revenue Service and evidence of income, such as two recent pay stubs. Previously, some servicers have asked borrowers to fax in copies of their tax returns. Borrowers sometimes couldn’t find the needed tax forms or complained that servicers repeatedly lost material faxed to them…”

Read the full article: http://online.wsj.com/article/SB10001424052748704878904575031321628902414.html

“It took a while for mortgage-modification programs to gain any lift. For the first several months, they resembled those early flying contraptions that would bounce along the ground before crashing in a tangle of wood, metal and canvas.

But lately, some loans have gotten reworked, helping certain cash-strapped owners stay in their homes and convincing others to try again.

For example, the government’s Making Home Affordable program seems to be gaining traction, with 650,000 modifications in the works, including more than 34,000 in Arizona, the third-busiest state, according to the Treasury Department. Plus, some homeowners are getting mortgage help in other ways, without resorting to the federal program…”

Read the article: http://www.azcentral.com/business/articles/2009/11/29/20091129biz-TakeCharge1130.html

“The federal government said Thursday it had met its goal of beginning trial loan modifications for 500,000 financially troubled homeowners in a sign the foreclosure-prevention plan is gaining traction.

The loan numbers were released as several senior House lawmakers expressed support for extending an $8,000 tax credit for first-time home buyers. Talk of extending the credit shows how lawmakers believe the fragile housing market remains dependent on federal support.

Treasury Secretary Timothy Geithner said the number of people participating in the modification effort is, for the first time, increasing at a rate faster than that of new families facing the risk of foreclosure. But the number of families at risk is still ‘unacceptably large,’ he said…”

Read the article: http://online.wsj.com/article/SB125504704023074901.html

“Capitol Hill housing and mortgage lobbyists were buzzing last week about an aggressive new legislative proposal that could put tens of thousands of financially-stressed home owners into loan modifications, even if their lenders and loan servicers had to be dragged kicking and yelling to the negotiating table.

Under the new bill, which was sponsored by four Democratic senators active in housing issues, all lenders and servicers operating in the U.S. would be prohibited from foreclosing on home owners unless they had discussed reasonable modification options with the borrowers.

Lenders who didn’t comply would be hit by stiff fines and other legal penalties…”

Read the article: http://realtytimes.com/rtpages/20091005_washingtonreport.htm

“Debra and Arthur Scriven were served notice in June 2008 that their mortgage lender, a unit of Citigroup Inc., was preparing to foreclose on their home. Fifteen months later, the Scrivens are still in their home near Columbia, S.C., and battling to stay there, even though a dispute with the lender over how much they owe prompted them to stop making regular payments last year.

Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing “shadow” inventory of pent-up supply that will eventually hit the market…”

Read the article: http://online.wsj.com/article/SB125366552480532521.html

“You warn that the other shoe is about to drop when it comes to foreclosures in Arizona. What are you referring to?

Goddard: Billions of dollars of payment-option adjustable-rate mortgages(ARMs) were originated in Arizona, particularly near the end of the housing bubble. These loans allowed many consumers to buy homes and make a minimum payment that is only a fraction of the interest due on the mortgage. More than 120,000 payment-option ARMS are expected to reset in Arizona in the next 12 months. According to experts, a large percentage of payment-option ARMs could default once the reset is made…”

Read the article: http://www.azcentral.com/arizonarepublic/opinions/articles/2009/08/24/20090824aztalk-newsmaker24.html

“What’s keeping troubled homeowners from getting mortgage help? Start with the fax machine.

Most loan servicers taking part in the Obama administration’s mortgage modification initiative require that borrowers fax in their applications and supporting documents. And because faxes can be problematic, aid can be delayed or denied.

The fax isn’t the only source of complications. Borrowers and housing counselors complain of endless waits on hold, lost paperwork and incorrect information from customer service representatives.”

Read the article: http://money.cnn.com/2009/08/11/news/economy/dumb_reasons_no_mortgage_modification/index.htm?postversion=2009081110

“The Obama administration, scrambling to get its main housing initiative on track, extracted a pledge from 25 mortgage company executives to improve their efforts to assist borrowers in danger of foreclosure.

In an all-day series of meetings Tuesday at the Treasury Department, government officials reached a verbal agreement with the executives for a new goal of about 500,000 loan modifications by Nov. 1 and stressed the program’s urgency.

The sessions came amid concerns that the Obama administration will fall far short of its original goal of helping up to 3 million to 4 million troubled borrowers with modified loans.”

Read the article: http://bit.ly/BM2yo

“U.S. Housing and Urban Development Secretary Shaun Donovan today announced an expansion of the Obama Administration’s Home Affordable Refinance Program to include participation by borrowers who are current but up to 125 percent underwater on their mortgage. Under authorization provided by the Federal Housing Finance Agency, borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will now be allowed to refinance those loans according to the terms of the Home Affordable Refinance program established earlier this year.”

Read the release: http://bit.ly/W6VxP.

By Ralph Roberts
Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, recently released his list of the top ten steps homeowners can take in order to negotiate an affordable loan modification. The following steps apply to homeowners working directly with a lender as well as to those teaming up with an attorney or alternative third-party representative.

1. COME CLEAN
It can be tempting to bend the truth when you are trying to convince a lender to approve a loan modification. Only by laying all of your cards on the table and disclosing the truth can you begin to develop and implement solutions that will put you back on the path to long-term financial health.

2. UNDERSTAND YOUR LENDER’S POINT OF VIEW
As far as your lender is concerned, it all boils down to money. You are most likely to be approved if you can show modifying your loan will cost the lender less than a foreclosure.

3. KEEP A COOL HEAD
Expressing anger toward your lender puts you in an extremely disadvantageous position. For example, your lender may decide that you are unreasonable and that foreclosing would be less costly overall.

4. GIVE THEM WHAT THEY NEED
In order to expedite the situation, find out exactly which forms you need to fill out and which documents your lender needs to process your application. Make sure you provide everything to your lender or representative in the manner specified.

5. ASK FOR WHAT YOU WANT
Before meeting with your lender, make sure you spend some time figuring out what you want and need. For example, how much can you realistically afford to pay each month?

6. LET THEM DO THEIR JOB
Loan modifications typically take between 30-90 days from start to finish. During this time, avoid the temptation to micromanage the process. To alleviate unnecessary anxiety, ask your lender for an anticipated timeline.

7. GET YOUR FINANCIAL HOUSE IN ORDER
Put a tracking system in place today and start developing a budget to ensure you are not spending more money than you are earning.

8. KEEP EVERYONE POSTED OF ANY CHANGES
If anything changes related to your financial situation, be sure to keep your loan modification representative or lender in the loop.

9. MAKE SURE THE LENDER’S OFFER IS TRULY AFFORDABLE
If the loan modification is unaffordable or makes your budget so tight that you are only one car repair or medical bill away from defaulting again, head back to the negotiating table to try to work out a better deal.

10. HOLD UP YOUR END OF THE BARGAIN
The key to success is discipline and commitment. All the effort you spend setting up a plan is of no use if you don’t follow the plan you created or agreed to.

To read Ralph’s full article on this and other topics, please visit www.keepmyhouse.com.

Ralph R. Roberts, GRI, CRS is an award-winning author and REALTOR® who has penned several successful books, including his latest book, Loan Modification for Dummies (Wiley), slated for publication in summer 2009. For more information about Ralph please visit www.keepmyhouse.com.
The Federal Loan Modification Law Center, LLP, is a law firm dedicated to preserving the American dream of homeownership by successfully renegotiating loan agreements between homeowners and lenders. For more information please call 1-877-39-HOUSE (1-877-394-6873) or visit www.fedmod.com.