The special refinancing program helps people secure a lower rate of interest in the amount owed whereas the loan modification helps them secure lower rate of interest on the amount owed. The first mortgage loan you take while purchasing a home helps you settle down in your own home and makes you feel super good about the investment. However, the positive situation might change all of a sudden and the home owner might face difficulties in paying off the first mortgage loan as the lesser a person?s ability to manage his funds for daily expenses and investment repayments the more he will go into debt and in the process face foreclosure in the near future. However, since experience teaches everyone a bitter lesson, the real estate market and the lenders learnt a lesson when the home which had undergone foreclosure was to be re-sold in the real estate market and it was a really tough time getting the right value for the particular home.

Since it was very difficult for lenders to sell off the home again in the market, the Government decided to stop the increasing number of foreclosure cases by extending a helping hand to all the debtors who were on the verge of losing their homes and turn it into an opportunity for the home owners to save their homes by paying off the mortgage amount at lower rate of interests or over a extended period of time. The Obama administration introduced two main types of mortgage assistance programs: the first one being the home affordable refinance program and the second being the home affordable modification program.

With the help of home affordable refinancing program home owners were given an option to refinance their mortgage and in the process decrease their monthly payments to an extent which are affordable to them and which can be paid off without any hassles to save ones home. This special refinancing program enabled many home owners to reduce the burden of debt on their shoulders especially the stress of losing their homes by either re-negotiating the interest rates and reducing the existing interest rate to a lower rate to make the monthly repayment amount affordable. However, if anyone wants to refinance their mortgage it is important to find out the value of one?s home as more often than not people whose home value has decreased over a period of time often find it tough to find lenders who will assist them in the home affordable refinance program. The prerequisites for qualifying for special refinancing program are the mortgage loan should be guaranteed by Fannie Mae & Freddie Mac, the amount owed to the lenders should not be more than 80% of the home’s value, one must not have missed out on loan payments in the past 12 months etc.

The second type of mortgage assistance program which are known as the loan modification is also a secure way to avoid foreclosure. Mortgage loan modification enables an individual to reduce mortgage payments to 31% of their gross total monthly income either by lowering the rate of interest or by extending the term period of repayment to up to 40 years. Under loan modification the amount of principal can also be reduced which is owed to the lenders.

High foreclosure rates across the country as well as a faltering financial sector has dictated government involvement in the mortgage industry. This involvement has facilitated growth in both residential and commercial real estate such as Minnesota real estate and has created more favourable and secure lending situations for financial institutions. All this has been done in order to stimulate economic growth in the United States.

The growth of the federal government’s involvement since the onset of the mortgage crisis has created a situation in which the government has become a substantial pillar to the survival of the mortgage industry. Government has taken on much of the risk formerly assumed by lenders and has essentially become the mortgage market. With the power to set the terms that allow mortgages to be approved and their ability to own a proprietary share of many companies this government involvement now has the taxpayer shouldering a substantial part of the risk associated with lending in an uncertain economy.

The Federal National Mortgage Association and the Federal Home Mortgage Corporation have operated as government sponsored enterprises. These institutions are better known publicly as Fannie Mae and Freddie Mac. Although both institutions report to their shareholders they are protected financially and supported by the federal government. These safeguards include a line of credit through the U.S. Treasury, an exemption from state and local income taxes as well as an exemption from the Securities Exchange Commission (SEC) oversight. Their history has shaped the mortgage industry since the 1930’s and continued support by the federal government is essential to restabilising the economy and the housing markets across the U.S..

Fannie Mae was created in 1938 as President Franklin Roosevelt’s New Deal. The creation of the Federal National Mortgage Association was to ensure that mortgages were made more available to lower income families and to facilitate liquidity in the mortgage market. In 1968 the federal government converted Fannie Mae to a shareholder owned corporation in order to remove its transaction from the federal balance sheet. In order to create a competing the federal government formed the Federal Home Loan Mortgage Association in 1970. The idea was that competition would create a more robust secondary mortgage market.

The way Freddie Mac and Fannie Mae work is that they buy loans from approved mortgage sellers. These loans are traded either for cash or mortgage backed securities which guarantee payment of principal and interest. Mortgage sellers in turn can either sell or keep the securities. These companies also bundle mortgage backed securities from their own portfolios to investors in the secondary mortgage market. In order for Fannie Mae and Freddie Mac to guarantee their mortgage backed securities they set the lending terms and guidelines that determine which loan applications can be accepted for purchase. To simplify the role of Freddie Mac and Fannie Mae is to say that they provide financial institutions with the money to provide new loans.

The 2007 sub-prime mortgage crisis found a lot of low income borrowers some with poor credit were unable to pay their mortgages. Almost 80% of mortgages issued to the sub-prime borrowers were adjustable rate mortgages (ARM). With home prices peaking in 2006 home prices began to decline. Values continue to decline as these high risk borrowers could no longer afford their homes due to steep increases in the payments of ARM mortgages.

This caused an explosion of foreclosures across the country. Again the situation was compounded by problems with the Auto industry and the failure of economic icons such as Bearr Stearns, The Goldman Sachs Group, Citigroup Inc. and even Freddie Mac and Fannie Mae. Home prices accelerated their descent as foreclosures increases, jobs were lost and the countries financial situation teetered on the brink of disaster.

As a result lenders began to employ much stricter standards for loans. A shell shocked lending industry was not equipped to respond to financial failures of this level and they essentially shut off the flow of money available for loans. The federal government was forced to step in to bolster confidence. The Treasury Department and Federal Reserve were given the authority to grant access to low-interest loans and removed the prohibition on the Federal Reserve to purchase stock in Government Sponsored Enterprises. Despite these efforts the economy continued on its downward trajectory.

Currently government involvement has extended programs to reinvigorate the mortgage industry. There are no longer institutions offering mortgage terms that do not require a down payment. But federal programs are in place that assist with down payments for lower income families as low as 3% of the home’s value. Government backed mortgage insurance has made this possible by insuring that lenders are protected in the event of default on loans with limited equity in the home.

The federally backed Hope For Homeowners program offers a glimmer of hope for struggling homeowners hoping to avoid foreclosure. The program allows homeowners to refinance their home at more favourable terms with a fixed rate mortgage backed by the Federal Housing Administration (FHA). Lenders have to agree however to take a substantial loss on their original loan but at least are guaranteed a partial pay off and avoid costly foreclosure proceedings.

The federal government has also extend tax credits to home buyers in order to stimulate growth. The Worker, Homeownership and Business Assistance Act of 2009 has extended a valuable income tax credit. This incentive has stimulated the housing industry and brought some hope back to struggling home sellers languishing in struggling markets.

The Home Affordable Refinance Program is designed provide more affordable loans to existing mortgage holders in good standing. By providing Freddie Mac and Fannie Mae guaranteed mortgages borrowers can refinance at a more affordable monthly payment. It is hoped that this program will save 3 to 4 million families from avoidable foreclosure.

Federal programs now operate as the only means to provide a stable loan marketplace. Without federal involvement corporate and personal finances would be crippled by the inability to obtain affordable, secure and stable financing. Programs such as Asset Guarantee Program, the Home Affordable Modification Program and the Public-Private Investment Program have bridged a period filled with financial uncertainty and have allowed provided much needed support to an industry crippled by its own practices.

The growth of the federal government’s involvement since the onset of the mortgage crisis has created a situation where the government no longer just supports the mortgage market but rather has become a substantial pillar to the survival of the mortgage industry. The government has taken on much of the risk that was previously assumed by lenders and has essentially become the mortgage market. They have the power to set the terms that allow mortgages to be approved and they own a proprietary share of many companies that are major players in the mortgage industry. This government involvement now has the taxpayer shouldering a substantial part of the risk associated with lending in an uncertain economy.

Someday the federal government will be able to limit its involvement in the mortgage industry. But for the time being their support is necessary to reinvigorate the economy and stimulate growth in both residential and commercial real estate sector. You can know more at www.agentsranking.com

Believe it or not, Attorneys, of all people, are quickly developing a national reputation as champions of homeowners facing foreclosure, and are becoming a serious adversary for those banks attempting to fraudulently take possession of the homes of troubled homeowner?s, and in some cases receiving the homeowner’s property back free & clear, by filing a notice of rescission, and a quiet title action, based on Federal violations pursuant to the Truth In Lending Act (TILA), or the Real Estate Settlement Procedures Act (RESPA).

The new focus on contract law, debt-collection practice, securitized mortgages, the trusts that hold them, and the agreements that govern the trusts, have put foreclosure attorneys at the forefront of the rapidly expanding specialty of foreclosure defense.

Over and over again attorneys have found sloppiness, fraud and outright criminality in the nation?s mortgage lending industry. Regardless of why homeowners have been unable to pay their mortgages, foreclosure attorneys maintain that nobody deserves to lose a home to the unethical and illegal foreclosure procedures that are now being used by many banks and loan servicers.

Recently, some homeowners have staved off foreclosure for more than four years using a newly employed legal strategy, which requires the lender to ?Produce The Promissory Note?.

This legal strategy has been employed because of the way mortgages have been securitized. It?s often unclear who actually owns the debt, and what has been discovered is that systematically, the originating lenders only pledged these loans and didn?t actually transfer them? to the trusts that are supposed to hold them and issue the securities.

But only the true debt owner has the legal standing, or right to be a plaintiff in a foreclosure action. This is a basic first-year law school concept. If you?re Mike and the debt doesn?t belong to you, it belongs to Alice, then Alice better be in court, not Mike. You can?t show up in court as Mike, and tell the court you have the right to be there when you know full well that Alice is the true owner.

Yet, time and again, loan servicers and others have sought plaintiff status in order to foreclose on a homeowner, often by using affidavits stating that the actual notes had been lost, and stating that ?they anticipate a transfer of assignment?? of the debt, but the loan originators can?t appear in court and claim the right to foreclose because they would be in violation of securities laws for not transferring the loan to the trust when they were supposed to.

Although making an issue out of the actual ownership of the securitized title might strike some as a shameless stalling tactic aimed at abetting a debtor who, after all, owes the money, attorneys argue that if such basic legalities aren?t adhered to, a homeowner could pay his or her way out of a foreclosure jam only to wind up in another jam when a new plaintiff emerges claiming to own the debt.

Attorneys describe cases in which homeowners have been sued for foreclosure by two different trusts, each claiming they owned their house, and cases where trusts have been sent documents on the same case by two different servicers. So it is essential for the homeowner to determine who is the rightful owner of the debt, before paying off that debt, in order to be provided the legal fairness, and protection that the law intended. Therefore, this legal approach has been viewed as a completely moral and ethical approach.

Additionally, the Government has a dirty little secrest, which it has been surpressing for months. It is that most adjustable rate mortgages were illegally securitized in the haste to convert toxic loans into fee-generating mortgage backed securities.

Judges across the nation, including Boyko, Rose, Kurtz, Schack, Rosenblatt, Bufford, O’Malley, Shaw, Bryant and Foley have issued orders dismissing foreclosures brought by lenders that have illegally securitized loans and are no longer current holders of the notes.

These “quiet title actions” have forced lenders, including Chase, Citibank, Wells Fargo, Washington Mutual, Countrywide, Lehman, Shearson, Indymac, Bear Stearns, Wachovia, and Bank of America to unravel their notes’ dizzying journey from the mortgage closing to an investment bank or depositor, then to a series of trustees who pooled and sold the loans and issued shares of mortgage backed securities.

What makes these securitizations illegal is how fraudulently they were conducted, by foregoing proper assignments and transfers required by law to secure an interest in the underlying real estate.

Now, the Obama Administration not only wants to continue this fraud, but is planning to reward the very investment banks and hedge funds that were architects and participants of the securitization that created the global financial crisis we are now experiencing.

While this is devastating news to taxpayers who will be stuck with more debt, it is great news for homeowners’ with securitized loans. Ironically, their mortgage lenders’ haste to securitize their loans has provided a security blanket that protects them from foreclosure. In fact, many homeowners already own their homes free and clear and just don’t know it yet. Consider this reversal of misfortune divine intervention against a greedy global conspiracy aimed at defrauding homeowners and stealing their homes.

So, you can move to stop the foreclosure, and fight for your home by acquiring a ?Forencis Loan Audit? that will identify any possible lender fraud, or Federal violations of the Truth and Lending Act (TILA), or the Real Estate Settlement Procedures Act (RESPA). Expose the fraud, stop the foreclosure, and take your home back by fighting your foreclosure!

This information is brought to you by Save Your Home at:
http://hop.clickbank.net/?steward014/SAVEURHOME

 
Many people who have no choice but to leave a foreclosed home are not happy with the circumstances they find themselves in. This can lead to frustration and stress that leaves the former homeowner looking for ways to get back at the evil mortgage company.

There are reports by people hired by the mortgage companies to clean out the foreclosed home of dead pets left rotting in the home with a smell so bad you can barely stand to be in the home for a few minutes. Other vandalism found in homes that were foreclosed on include home owners pouring quick setting cement down the toilets hoping to cause major damage to the homes plumbing. Or people taking cabinets, marble countertops, light fixtures, door handles, carpets, and even toilets. These items are normally considered part of a home and would not be taken by the previous owner in a normal situation.

To help alleviate this kind of vandalism by the previous homeowner and help with moving expenses, mortgage companies are negotiating cash for keys offers to homeowners. This type of agreement advantageous for both parties and gives the mortgage company some added insurance that the home will not be trashed when the previous home owners leave.

Where the cost of vandalism is high lets say in the $10,000 range, mortgage companies are going after the previous homeowners with lawsuits. People who are going through a foreclosure eviction would be well advised to keep their financial problems to a minimum and not destroy the property they are vacating.

Another results of people leaving their foreclosed homes is that the normal upkeep of the home is not done. This combined with the bank selling the new home at a much lower price to dump the home from their books hurts the value of all the other homes in the neighborhood. Which in turn causes more foreclosures.

Prosperity Renewal Tip #23

When buying a used car, never accept a financing package of longer than 36 months.

As much as we are told that a new Lexus, Escalade or BMW will give us the status, freedom and respect we deserve, purchasing a new high dollar vehicle is not a smart purchase for anyone during any economic climate.

Vehicles are not an investment; they loose value the minute you drive them off the lot. The smart shopper will search for a good used car.

If possible, pay cash for your next car. Since cars immediately begin to loose value, you will lose money by paying interest on an item that depreciates. If you cannot pay cash, pay at least 20% for a down payment to get a lower interest rate. Choose a shorter-term loan that is no more than 36 months.

Here is an example of how the length of the loan affects the total amount paid for the car:

$18,000 loan amount with 5.00% interest for a person with average credit

A 36 month loan yields a $539.48 monthly payment  You will pay  $19,421.28 over the life of the loan.
A 60 month loan yields a $339.68 monthly payment but you will pay $20,380.80 over the life of the loan.

You will save $959.52 in interest with the 36-month loan.

If you are getting a loan, get pre-approved so you will know how much car you can afford. This will put you in control of your loan and help you evaluate the financing deal offered by the car dealer.

Ways to implement this tip:

#1  Never buy a new car.
A car starts depreciating the minute you drive it off the car lot.  After two years a new car is worth as little as half its original sticker price which makes a 2-year old car one of the ideal used cars to purchase.

#2  Pay car off as soon as possible.
The quicker a car is paid off the more interest payments you eliminate.

#3  Do your due diligence when purchasing a used car.
– Get a Carfax report before purchasing
– Have car checked by your mechanic
– Read Consumer Report and similar magazines
– Get Blue Book price

Kingdom Focused!

Flora M. Kynard, author of
Prosperity Renewal: 14 Biblical Principles for True Financial Freedom
info@prosperityrenewal.org
www.prosperityrenewal.org
www.50milliondollarclub.com

Prosperity Renewal Tip #1

Buy things for their usefulness rather than their status.

Cars should be bought for their utility, not their prestige.  When you are considering an apartment, a condominium, or a house, thought should be given to livability rather than how much it will impress others.  Don’t have more living space than is reasonable.

Consider your clothes.  Most people have no need for more clothes.  They buy more not because they need clothes, but because they want to keep up with the fashions.  Forget the fashions!  Buy what you need.  Wear your clothes until they are worn out.  Stop trying to impress people with your clothes and impress them with your life.

Kingdom Focused!

Flora M. Kynard, author of
Prosperity Renewal: 14 Biblical Principles for True Financial Freedom
info@prosperityrenewal.org
www.prosperityrenewal.org

Related Articles:
Prosperity Renewal Tip #19
Prosperity Renewal Tip #27
How To Make $1000 Or More With A Garage Sale

Prosperity Renewal Tip #27 

Host a garage sale.

Unload the stuff you no longer need or want.

You have a lot more stuff stored in your house than you will ever need or use.  A quick check of your closets, basement, garage and other nooks and crannies should produce boxes of stuff that you own, but no longer have any use for.

Instead of keeping them in perpetual storage, sell it all. You can do it online through sites like eBay, Craigslist, Half.com or have a garage sale and get rid of it all at once.

The basic guideline: If you haven’t used something for the last year, you will probably never use it again.  Selling all this will keep your house less cluttered and will also bring in well over $100 in most cases.

Ways to implement this tip:

#1  Attract a crowd to your garage sale.  
To attract a crowd to your garage sale, run an ad in your local newspaper and post easy-to-read signs around your neighborhood. Check local regulations about posting notices, of course, and write signs in crayon if it looks like rain.
 
#2  Sell items that sell well at garage sales.  
Children clothes sell well at garage sales, adult clothes don’t — try a consignment shop instead.  List children clothing sizes and brand names, if you have them, in your ad.  Some parents make special trips to garage sales featuring labels like BabyGap and Gymboree.

#3  Involve your children in the garage sale.  
If your children are old enough to help, let them pick some of their older toys to sell.  A special children table with a sign like, “All proceeds go to purchase of our Disneyland souvenirs,” is often a big hit — and it’s a great way to teach your children about money.

Kingdom Focused!

Flora M. Kynard, author of
Prosperity Renewal: 14 Biblical Principles for True Financial Freedom
info@prosperityrenewal.org
www.prosperityrenewal.org

Related Articles:
Prosperity Renewal Tip #9
How To Make $1000 Or More With A Garage Sale