The US Economy Fires Up to End 2010

The GDP growth rose considerably to a annual rate of 3.2% up from the previous 2.6%

The market seems to be doing pretty well and those GDP numbers are pretty solid. Just the same I have some worries.


Housing is not looking any better and I think it is or at least could get a little worst. That scares me a bit. I think we are going to see a lot of foreclosures in the future and a lot of banks are going be taking on properties that they can not sell and I think that will be most of them.

Homeowners of course will do their best to stop foreclosure through a mortgage solution such as loan modification or even refinancing. But many will not be able to afford their mortgage payment or rather the home.

I suppose only time will tell. I would just hate to see things take a turn for the worst as I am not sure the economy has what it takes to pull itself back up from a double dip.

How to Get an Affordable Loan Modification

If you are a homeowner who wants to reduce their mortgage payment via the Obama mortgage modification program known as HAMP the Home Affordable Modification Program than you need to follow the step by step process listed below.


Qualify Yourself

The first step is to determine if you meet the basic qualifications for affordable mortgage modification program.

Preliminary HAMP Application

Next you need to obtain, complete, and submit the preliminary modification request application. This is what the government refers to as the Request for Modification Affidavit. This application is what starts the ball rolling and will get you into a HAMP trial modification.

Prepare Financial Package

With the initial application you should send a financial package that includes the following documents listed below.

• Tax Form 4506-EZ. This form allows your lender access to past tax returns you submitted to the IRS.
• Income documentation such as pay stubs and bank statements. Submit at least three months worth.
• Document certifying that you have not been convicted of felony larceny, fraud, forgery, money laundering, tax evasion, or the like in the past 10 years.

Successfully Complete HAMP Trial Modification

You must make all your trial payments on time and respond to the packages and inquires your lender will send in the mail. Play it safe and utilize the envelopes and payment coupons provided.

Get Approval (or Unmentionable) Decision

Wait for lender to evaluate debt, income, financial hardship, and the like.

Three Foreclosure Soloutions

3 Foreclosure Options
I wanted to explore three great foreclosure alternatives for homeowners in financial hardship.




Deed in lieu of Foreclosure

This is a foreclosure solution for homeowners that can not afford the home. This option simply involves handing over the deed to your home in place of the debt owed to your mortgage company.

What is the benefit to the Deed in lieu of foreclosure as opposed to just letting the home go to foreclosure? 

Well the big benefit of a deed in lieu is that the debt is forgiven free and clear. This is different then if the property went to foreclosure because if at the foreclosure the property did not sell then the mortgage company would have to find a different avenue to sell the property. Many times the lender will end up selling the property for a loss which thew lender can then come after you for the difference.

That's right if you let your home go to foreclosure you can lose more then your home.

Deed in Lieu Fundamentals

Repayment Plan

Many times a Homeowner will be able to obtain a repayment plan from their lender as an alternative to foreclosure.

A repayment plan is perfect for any Homeowner who has faced a short term financial hardship and who has since recovered. As long as you can show your lender that you can now afford the monthly payments without any problem then they will generally give you another shot to make good on the mortgage.



Restructured Mortgage - Loan Modification

A loan modification also known as a mortgage modification is perhaps the most popular foreclosure solution out there for Homeowners. The reason for it's popularity with Homeowners is because a modified mortgage agreement which is a rewrite of the terms of the existing mortgage agreement based on the present financial situation of the homeowner, is usually given new terms that favor the Homeowner.

This means that if you were to obtain a mortgage modification you could potentially lower your principle on the mortgage as well as the monthly payment and interest rate.

Modification Basics


Related Articles

Homeowners Can Stop Foreclosure

Homeowners Can Stop Foreclosure

Many homeowners are finding themselves staring down the barrel of mortgage default and a looming foreclosure sale. There are a lot of homeowners who think that all hope is lost and that their is nothing that they can do. They feel hopeless. The thoughts of uncertainty are too much for many to deal with.



I have good news for these homeowners stuck amidst the cloud of uncertainty and fear. There is hope for a brighter tomorrow. Homeowners are able to stop foreclosure. There are literally dozens upon dozens of foreclosure solutions available for homeowners who find themselves amidst a financial hardship.


Below I have created a list of some of the most common methods homeowners use to stop foreclosure. Under each label is a brief description as well as links to resources offering further research.


Hang in there. You can stop foreclosure.

How Homeowners Stop Foreclosure

Loan Modification

Loan Modification has become increasingly popular. This debt help solution allows homeowners to lower their monthly mortgage payment.

Mortgage Refinance

Mortgage refinancing will stop foreclosure but has become increasingly difficult but if a mortgage refinance is obtainable it is one of the more favorable mortgage workouts available to Homeowners.

Short Sale

Short Sale is quite common in the world of foreclosure but the homeowner will always lose their home in this situation.

Hard Money Loan

Hard Money Loans are very lucrative for investors if equity has accumulated in the property.


Loan Audit

Loan Audits performed by lawyers in effort to find grounds to legally challenge the lender is a new trend. Many have found success, as the lender will often opt for loan modification at the threat of a lawsuit.


Bankruptcy

Bankruptcy will stop the foreclosure proceedings but generally the Homeowner will eventually lose the home down the road.


Forbearance

The lender often grants a forbearance agreement or a repayment plan to the Homeowner in efforts to retain home ownership.


Home Sale

Selling the home on the open market is a way to stop foreclosure but it is generally a better idea to postpone the sale to relieve the discounting pressure on the sales price of a home when in foreclosure.


These mortgage solutions that allow Homeowners to stop foreclosure are just some of the many mortgage workout options that are available to Homeowners who need to stop foreclosure and save their home.

Modification Basics

Loan Modification

Loan Modification is the restructuring of the existing terms to loan or mortgage.


Loan Modification may allow borrowers amidst financial hardship to stop foreclosure and keep their home.

Payment terms and payment variables such as the interest rate are adjusted in a way that lowers the monthly installments. Lowering the monthly mortgage payment via mortgage modification allows the homeowner to make home affordable and thus keep their home.


Related Articles

Debt Help and Debt Solutions

12 Obama Loan Assistance Programs Extended through 2013

Banks Playing Off Clueless Homeowners - Destroying the Obama Plan One American Dream at a Time

The HAMP modification has been compromised. Obama's mortgage assistance program designed to provide debt help for homeowners has been sabotaged.


The problem is that homeowners are not able to obtain a permanent modification through the program because they do not get approved after the HAMP trial modification.

Approximately 70% of HAMP trials started through JP Morgan and Chase are not approved. Approximately 50% of the 1.4 million trial modifications through the Making Home Affordable Plan have dropped out.

Now ask yourself; how it is that a program that was created and developed with terms chosen specifically because those terms allowed a projected eligibility of 3 - 4 million homeowners has only been able to issue 1.4 million trials and only half of those participants still have a shot of obtaining a permanent modification. That means about 1/5 to 1/7 of all those who originally qualified will not qualify according to the lenders hosting this program.

Oh Yeah, one other important detail that you may be curious to here about....

the lenders are given 1,000 dollars cash per HAMP trial!!!!!!!

hmmmm...

I know!

The lenders are taking advantage of the fact that homeowners don't know squat about contract law, the mechanics of the MHA HAMP Compliance measures, and have not a clue of the importance of communicating through writing nor do they understand how important it is to keep records. Now even if a homeowner was well aware of these aspects of lender negotiations when would a full time, hard working American homeowner get the chance to keep up with these tasks. They are time consuming and extremely stressful. This is even more true when you consider how much more mentally exhausting it is to deal with loss mitigation talks when it is your personal finances and financial well being that is of interest.

I have talked to many homeowners and read many emails from homeowners and the scoop is this...

Many homeowners have not a clue that they are even in a trial modification! Homeowners can't get their head around why they should not even bother talking and or listening to anything that the "customer service agent" aka DEBT COLLECTING LIARS AND HOME WRECKERS who just lie, lie, and lie.

Homeowners are not making payments with the coupons. They say "coupons? what coupons?" It is a total cluster duck of a situation. It is not hard to communicate the idea that the payment coupons are the means for tracking the HAMP trial modification. The lenders just don't make an effort besides putting the directions in print. If the homeowner calls typically the lender won't mention the coupons. I would not be surprised if we were all to find out that the vast majority of entry level customer service agents that work for the major lenders are not even aware of the payment coupons themselves.

You know what the homeowners could use????

REPRESENTATION

They don't know what to do.

They are overwhelmed and most of them are working twice as hard to find work, or they are just working more hours. They are fighting for their crumbling marriage. They are trying not to worry their kids. They are in shambles. They HURT they CRY they need HELP.

I just posted a new article that takes a closer look at the negotiation playing field between lender and homeowner. Take a look if you are interested.


Related Articles

Homeowner Risk and HAMP Modification

US Economic Growth... Well Kinda

The United States economy is at a fork in the road. Which way and where it will go? Nobody really knows, even if they don't tell you so.

How to Hedge a Failing US Economy

The finance blogs and finance bloggers of the world have been speaking of a dooms day looming in the not so distant future of the American economy. The really scary part is that they all have strong arguments.


There is a large supply of worry, and perhaps even a larger supply of reasons to be worried about.


In researching the current state of the American economy I had a few moments to think about what would be a good investment.


I asked myself; where should one put their hard earned money?




The Answer will shock you...









I think the most appropriate way to hedge ones portfolio at this point is to invest your time in a garden.


See the thing about this whole situation is that we as a country have messed with things like stimulus, bail outs, zero interest rates, new legislation, more regulations. and the like so much that there is little else to throw at the next unknown problem.


If things go bad again... It won't be because there is a shortage of money. No, It will be because there is no money of any standard or clearly determined value. Our economy will shift back over to the bartering system.


I am just not sure that are economic wheels can take another pot hole, recession, depression, or whatever.


We are already driving this thing with a spare tire (and on "E" thanks to BP).


The way i see it the US is still on track to a recovery, our economy is still growing, the illusion of money is still alive and well. However, there is just not a whole lot of great looking tricks to patch a tire if we catch another flat.


We can hold this thing together as long as everything runs smoothly, or if destiny blesses us with just a bit of luck we should all be just fine and dandy.


 I fear that any sort of bad luck in the near future could really F**k us.


But then again what do I know?


Let's get to the latest numbers that everyone is talking about...



GDP and Economic Growth

Where is The US Economy Going?

Over the last quarter the economy has grown at a rate of 1.6% which doesn't really sound all that bad to me. However original guidance predicted 2.4% which means that estimate fell by about 33%. On the brighter side analyst on wall street were expecting 1.3% so in that respect we are up 20%. I think that the fact that we are growing at all is either a miracle or a damn lie.


Over the last four quarters GDP has averaged 2.9%, The Experts on the matter say that unemployment will only get worst unless we have a GDP growth rate of 3%.


US Consumers



The US Consumer has actually been spending more on everything except for housing. Not to long ago I posted that the housing market was stabilizing but apparently I am a big fat liar.


Housing Numbers

Consumers are Spending - But Not on Housing

From the home sale numbers that have been released I estimate that at the very most in the month of July only 23,000 homes were bought and sold. This is less then an avg of 500 per state though trust me when I say that state home sale numbers differ tremendously. That does not say much for the previously posted story on the housing stability theory.

 In fact you have to go back half a century or so to find home sale numbers that low!

The home sale numbers have droped 33% year over year and they were not doing so well last year as you already know unless you have a world of warcraft account.


On top of that the Make Home Affordable Plan, Obama's mortgage assistance programs, has had fewer and fewer loan modification workouts come through HAMP, the modification program. The Obama modification plan, or more accurately HAMP has been a tremendous success by any comparative measure. But just the same, as of late, the HAMP performance has been a bit sluggish.


However the Obama Plan made an additional Hardest Hit Fund Payment to an additional five states that were hardest hit by the financial crisis.


I believe the foreclosure prevention assistance payout through the Hardest Hit Fund was 600 million dollars. Combining that with the original 1.5 billion dollars that stimulus total adds up to 2.1 billion dollars.

I think Obama is doing an amazing job overall on this side of things. Obama's housing and financial stability efforts have been tremendous.



The US Job Market



The private market is actually still producing new jobs. In July we had 71,000 new private sector work force additions. However the US economy as a whole shed a total of approximately 130,000 jobs.


These job losses were in large part due to the temporary census jobs that have come to an end. In July this number was around 145,000 jobs terminated. In June 225,000 jobs were lost. That is a total of 370,000 paychecks that are no longer going to be spent every other Friday... That is just no good.


But let us not get to hung up on that large and very scary number. The good news is that the private market is hiring and not firing. This is a blessing and a glimmer of hope for homeowners.

Stabilizing The Housing Market – How America Did It

The mortgage loan and housing crisis created tremendous economic anxiety and directed the American economy towards a black hole of financial hardship.

Though the US economy is not out of the recession or perhaps depression, things have appeared to settle down a bit.

It looks as if the housing market may be stabilizing. This sis a article exploring the steps and actions that were taken to stabilize the US housing market.

Key Actions of Housing Recovery

• The FHA's Efforts and Powerful Initiative

• Their efforts to spend capital on mortgage assets and securities when private capital was no where to be found.

• Political backing of their efforts to reform the financial markets and particularly the practices and operations involving debt and risk management.

• Obama’s Making Home Affordable Plan

• HAMP Modifications have helped 1.2 million homeowners obtain a loan modification

• HARP Refinance

• Lender Incentives

• Freddie Mae as acting agent for the MHA-C or the compliance assurance operations

• The Plans overall flexibility and agility to structure and restructure programs as they are needed.

• The Marketing and Advertising – aka the out reach efforts of the Making Home Affordable Plan

• The Hardest Hit Fund – Foreclosure Relief

• Home Buyer Tax Credit
• The home buyer tax credit added a great incentive for first time home buyers.

• The Nearly 25 Billion Dollars Given to US Housing Agencies
• US Housing Agencies were able to keep lending while other private lenders were saddle bagging cash out of fear and financial panic.

• 1.4 Trillion dollars of Purchases by the FED and Treasury to Keep Credit Markets from Choking
• Thank God. We would be Russian otherwise.

• Financial Support for Fannie and Freddie

All of these actions taken by our collective American government has really helped stabilize the US housing market.

Mortgage Modification - No Easy Task

Obtaining a loan modification is hard. The lenders are overwhelmed with calls and mortgage defaults. It seems as if the only tactic they have to deal with the overwhelming volume of calls is the run-around and what a run it is. Homeowners, loan modification service reps, attorneys, nonprofit advocates, and even politicians have no luck with the dreaded call centers of the typical mortgage lender.

Don't take my word for it....




If she can't get these things through then who else is going to be able to obtain a loan modification?

Learn More -

Mortgage Modification Three Times More Likely to Reduce Principle

HAMP Qualifications - Obama Mortgage Help

Debt Solutions

Obama Loan Modification - From 1 to 500,000 Mortgage Modifications

The Obama Loan Modification program known as the making home affordable plan has been a success! Mortgage Lenders finally got the hint from President Obama and his administration, They are now clearly headed in the right direction and offering Homeowner Hope to those in financial distress.


Large lending institutions such as Saxon, Bank of America, Wells Fargo, and many others have really cam through this last month or so and have done their part in America's collective effort to Make Home Affordable by restructuring Home Mortgage loans under the Obama specified guide lines. In fact the mortgage lenders have even one upped Obama by completing the goal of 500,000 loan modifications by November 1st. They completed this feat with ease and plenty of time to spare as of early this month on October 6th.