A loan modification/ loan mod is a process whereby a homeowner's mortgage is modified and both lender and homeowner are bound by the new terms. The most common modifications are lowering the interest rate, reducing the principal balance, 'fixing' adjustable interest rates, increasing the loan term, forgiveness of payment defaults & fees, or any combination of these.

A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years, applying to debts discharged in calendar year 2007 through 2009. (With the Emergency Economic Stabilization Act of 2008, this tax relief was extended another three years, covering debts discharged through calendar year 2012.)

A short sale is not always the answer. First, the bank must agree to it and generally will weigh the cost of the short sale against the cost of a foreclosure. Another significant factor is which bank or loan servicing company is handling the short sale loss mitigation. In many cases the reason for the denial on the short sale offer is due to the loss mitigations process. An example of the process being unfavorable, is the short sale bank ignoring market conditions or being misinformed of current market conditions for the short sale property area.
A few examples of companies that we’ve had difficult in negotiating short sales with are:

• Country Wide
• Option 1 Mortgage
• Popular Mortgage
• SunTrust Bank

Banks and loan servicing companies that are favorable in negotiating short sales with are:

• Chase
• Wells Fargo
• Citi Mortgage / Citi Financial
• HSBC

We may negotiate on your behalf to modify an existing loan. If that’s not an answer, we may negotiate the short sale of your property. If a short sale isn’t practicable, your debt may be settled by turning the property over to the lender without formal foreclosure proceedings. This is called a Deed in Lieu of Foreclosure.

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of repossession, and additional advantages if the borrower subsequently files for bankruptcy.

In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

*This summary of a Deed in Lieu was obtained from Wikipedia.com

Fortunately, our services are paid at closing/settlement by the lender (if a short sale) or by the homeowner (if you have equity) only at closing of the sale or purchase. We’re licensed and insured real estate professionals. We are only paid if we successfully provide you a solution that works. We also contribute a percentage of our profits to our chosen nonprofit.

Accelerated Selling Advocacy Program (ASAP)^TM is our system of providing home sellers time-definite alternatives to foreclosure. A.S.A.P^TMoffers a fast and proactive accelerated approach to sell a property, compared to the traditional “list & sit” process. A.S.A.P^TMqualifies for the “Making Home Affordable” & HAFA incentives. The program offers solutions in pre-foreclosure and/or short sale situations when needing to sell property FAST. A.S.A.P ^TM is a win-win for lenders, sellers, buyers and real estate agents. We’re proudly offering this system in partnership with our national recognized accredited company and in conjunction with local and national property investors.

Contact us today for more information: save@wahousingadvocates.com

A mortgage loan meets the basic eligibility criteria for HAFA if all of the following are true statements:

• The loan was for the principal residence of the borrower.
• The loan was a first lien mortgage originated on or before January 1, 2009.
• The mortgage is delinquent, or default is reasonably foreseeable.
• The unpaid principal balance on the loan is no more than $729,750 for a single-family property, $934,200 for a dual-unit property, $1,129,250 for a three-unit property, or $1,403,400 for a four-unit property.
• The total monthly payment on the mortgage (including principal, interest, property taxes, hazard and flood insurance, condominium association fees, homeowner’s association fees, and any escrow payment shortage amounts subject to a repayment plan) is more than 31% of the gross income of all borrowers on that mortgage.
• The loan servicer has already considered the borrower for a HAMP loan modification, and one of the following conditions applies:
• The borrower does not qualify for a Trial Period Plan.
• The borrower does not successfully complete a Trial Period Plan.
• The borrower is delinquent on a HAMP modification by missing at least two consecutive payments.
• The borrower requests a short sale or a deed-in-lieu.

Use of the term “borrower” means all borrowers on the mortgage in question.

HAMP-eligible borrowers must be considered for HAFA within 30 days of either the termination of the HAMP agreement or the request for either a short sale or a deed-in-lieu.

Every potentially eligible borrower must be considered for HAFA before the borrower’s loan is referred to foreclosure or the servicer allows a pending foreclosure sale to be conducted.

Loan servicers retain the right to accept or deny a HAFA application based on external factors, such as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.

The above content is owned, copywritten & provided by hafa-program.com

No borrower will be charged any direct costs or administrative processing fees in connection with HAFA. The servicer must pay all out-of-pocket expenses, including but not limited to notary fees, document recording fees, release fees, title costs, property valuation fees, credit report fees, or other allowable and documented expenses.
 In the event the short sale or deed-in-lieu is not completed, the servicer may add these costs to the outstanding debt in accordance with borrower’s mortgage documents and applicable laws.

 Servicers may require borrowers to waive reimbursement of any remaining escrow, buy down funds, or prepaid items. Servicers may also assign any insurance proceeds to the investor, if applicable. Those funds will not be applied to reduce the total net proceeds from the sale.

In the event that one or more borrowers are unable to sign the paperwork in person, such as illness or military deployment, the borrower(s) may be responsible for costs associated with paper or electronic transmission of their signature.

The above content is owned, copywritten & provided by hafa-program.com

As the current economic conditions show, lenders are accumulating more and more bad assets in the way of expensive foreclosures. By accumulating more and more of these toxic assets, in turn, banks are not able to originate new performing loans. This is why lenders are negotiating short sales more than ever to minimize their losses.

Not if the short sale is your primary residence. Fortunately, in 2007, President Bush passed the Forgiveness Act, which permitted the IRS to forgive the debt in a short sale situation. To learn more, please review the following links for additional information.

“IRS passes special tax relief for Short Sales and Loan Modifications”

When viewing your credit report after a short sale settlement, the result will be listed as “settled debt.” A short sale is much less damaging then a foreclosure recorded on your credit report, which affects your credit score for seven years. A foreclosure will affect applications for new loans and even employment applications. You may also consult with us on improving your credit future that our proven and trusted affiliate offers.

We may negotiate on your behalf to modify an existing loan. If that’s not an answer, we may negotiate the short sale of your property. If a short sale isn’t practicable, your debt may be settled by turning the property over to the lender without formal foreclosure proceedings. This is called a Deed in Lieu of Foreclosure.

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of repossession, and additional advantages if the borrower subsequently files for bankruptcy.

In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

*This summary of a Deed in Lieu was obtained from Wikipedia.com