There have been some changes to the way banks are handling the influx of modification applications and short sales due to the financial crisis. Please pass this information on to others who may find it of value.
Bank of America has recently issued a change to its policies regarding loan modification applications for homeowners who are not in default. Bank of America, under its (MHA) Making Home Affordable program has issued a new “Imminent Default Checklist” for homeowners who are still current on their payments but believe that they will soon fall behind. The document goes into detail about the review process for eligibility. It covers a number of requirements including loan amount, date of loan origination, if other properties are owned by the homeowner, principal balance amounts, mortgage payment ratios, impounds, and finally a new calculation for payment to income ratios. Now the gross monthly payment goes up from 31% to as much as 40% depending on your income.
Remember: The MHA program is just a guide for the lenders to use, it is ‘not” etched in stone and the lenders may deter from those guidelines. Additionally, contrary to popular belief, even if you loan is not backed by Fannie or Freddie, we can still renegotiate with the private Note holder.
Wells Fargo has indicated they will no longer work with any third party companies unless the negotiators are HUD approved. This will do two things. 1. It will force schemers out of business who are taking money up front, or provide little to no results. 2. It will force the legitimate negotiation firms to become HUD approved which means courses and knowledge of guidelines which will help everyone including the homeowner get results.
Further changes are underway such as licensing for all individuals who negotiate with banks on behalf of homeowners regarding their mortgage. Licensing has already been in place for mortgage originators and that did not curtail the sale of bad loans in the past. It appears our legislators still do not understand that it’s not licensing that matters, but more the ability to report the firms that take money with no results, fine them, and drive them out of the market.
If you know anyone who can use honest objective advice, please send them to our website at http://www.HowToSaveMoney360.com for a wide range of educational materials.