Finally, A GUARANTEED Principal Reduction Program that makes sense!
Here’s how it works. Our private investment group will offer to purchase the note from your lender for the actual value of your home, regardless of your credit. You will not sell your home or transfer title at any time. Your lender in turn goes to the TARP Fund to recover their loss. The program offers you the following benefits.
PRP Program Highlights
· A new mortgage with a principal balance based off what your home is actually worth.
· A new loan based on prime + 3% (currently 6.25%) for 30 years and is fixed.
· No limit to loan amount.
· Any occupancy type qualifies (primary or investment).
· No credit requirements.
· Money back guarantee in writing.
· Money held by licensed mortgage brokers
Because multiple loans are submitted to the same lender, you reap the benefits of having more leverage in regards to having a short payoff issued, meaning your individual characteristics are not as important to the lender as if you went to them on your own. This not a loan modification or a refinance. There are only a few qualifications for the program which involve mostly proof of a specific income ratio and owing more than your house is worth. A Capital Loan Modification specialist will go over this with you.
The process starts with Capital Loan Modification analyzing and preparing all documentation we will need, then Addvent Funding getting you qualified and funded for the program. We’ll also request a BPO (broker price opinion – similar to an appraisal). Your file will then be submitted up the chain, have it reviewed for accuracy and to confirm you meet the qualifications and after that preliminary review – turned into Property Relief that represents the files, for review.
What does it cost me and how long does it take?
The costs associated with this program are nominal and commensurate with what is involved with getting your file approved. Depending on whether you are greater than 90 days late or if you are 89 days or less past due will also determine the fees associated with the process involved in preventing your home from being sold in foreclosure proceedings. Please speak with a rep further to discuss your specific situation. It takes anywhere typically from 6-8 months, but can last as long as 12 months.
modification. Is this true?
No, you do not need to be late on your mortgage. Only companies inexperienced in the Loan Modification process will require this, in addition, at times lenders may require this if individual clients try to modify their loans directly with them.
No, there are no qualifying factors. However, Pay Stubs and Bank Statements and other financial information will be collected as it helps us determine what future payment you can comfortably afford.
Yes, this is actually highly recommended as the rates on the 2
The process currently take anywhere from about 45 to 90 days depending on a variety of factors.
Simple...MONEY!!! In most distressed mortgage situations, foreclosure is a last resort for all parties involved. Simply put, both the homeowner and the lender usually want to avoid foreclosure at all costs. That is why lenders have come up with various alternatives to foreclosure, which they are typically very motivated to pursue prior to going to foreclosure. A loan modification or short sale gives the lender the ability to cut its losses upfront thereby avoiding the expense and time of a foreclosure and potentially greater losses. Lenders want to continue servicing their loans; they do not want to be in the business of owning and managing real estate. In many cases, a loan modification or short sale offers a better return on the lender’s investment than a foreclosure.
Fact: It is much, much cheaper for a lender to modify your existing loan than it is to foreclose on your property or to lose your business to another lender.
Example:
Current Balance: $200,000
Arrears: $20,000
Attorney’s Fees and Foreclosure Costs: $7,000Total: $227,000
In this down market, let’s assume your home is worth $210,000
If the bank forecloses on you and your home goes to auction, it will most likely
only sell for 65% of it’s true value, or $136,500
So, the lender has received $136,500 for your home that you owe $227,000 on.
$227,000 -$136,500 = $90,500 Loss
---OR---
They renegotiate your contract for you and save themselves a lot of money.
-Let’s assume they ask that you send them a $2,000 payment in good faith
-They forgive part of the entire arrearage ($27,000) by let’s say $10,000
-They roll the other $15,000 onto the back of your loan, increasing its balance
-They lower, and FIX, your interest rate to a reasonable level
-They stop the Foreclosure process
Let’s assume your new payment will be $1,400 at a fixed interest rate.
In just the first 2 years, they’ll receive 24 payments of $1,400, or $33,600.
So, yes they will receive less than what your current contract states, but as you can see:
After forgiving $10,000 in arrearages, they saved $90,500 by saving your home from going to auction and gained an additional $33,600 in payments just in the first 2 years.
That’s a total of $124,100!!!
Example over a 5 year period:
If they drop your $1,200 payment to $1,000, yes they will lose 60 payments at $200, which is $12,000 but they will continue gaining the $1,000 each month for 60 months, which totals $60,000.
Just as most homeowners use a professional to initially get into a mortgage, we firmly believe that it is in the homeowners best interest to use a professional to negotiate a loan modification on their behalf. You only get one shot to negotiate your way out of a bad loan, and while it is certainly possible to negotiate with the lender yourself, it is highly unadvisable. Most lenders’ loss mitigation departments are understaffed, and the overworked loss mitigators are usually overloaded with all parties vying for their attention. Unfortunately, the loss mitigator can be very difficult to get a hold of, and when you finally do get through, you have very little time with which to make your case. Because we work with all lenders and represent homeowners from all across the country, and since we specialize in loss mitigation, we understand how to collect, prepare, and effectively present the information that lenders require to seriously consider a loan modification or short sale. We have excellent working relationships with the lenders’ loss mitigation departments and we will leverage our network and expertise to help you solve your situation.
How do I qualify for a loan modification or short sale?
There are a few ways to be eligible for a loan modification. A common hardship occurs when a homeowner has an upcoming change to their mortgage payment due to a ‘recast’ or their loan converting into an adjustable rate. Another common hardship is due to their already high rate of interest that can no longer be maintained. Regardless of either situation, your income is still considered in determining the outcome of your loan modification.
How long does a loan modification take?
Every loan modification situation is unique and follows its own timeline. Typically a loan modification is completed within one to two months from the time we have a complete package ready to present to the lender. Having said that, we have successfully negotiated a loan modification in as little as one month. Timing depends on how quickly we can begin negotiating with your lender.
When should I begin the loss mitigation processes?
As soon as you possibly can. These situations tend to be extremely time sensitive. The sooner we can begin the negotiations with your lender, the greater the chances of a successful resolution especially if you’re behind on your mortgage.
Do Not Take Your Banks Modification Offer!
Who Qualifies for a Loan Modification?
There is a very wide variety of homeowners qualify for loan modification. With so many questionable loans being sold over the past few years, homeowners have more causes than ever for foreclosing. First off, you have Adjustable Rate Mortgages (ARMs) where the fixed term is up and the rate increases. The payment now becomes too much to afford. Many of these borrowers used stated income documentation to qualify, meaning that they could not truly qualify for the loan under normal guidelines. Once the rate adjusted upward homeowners who barely squeaked by in the past now have no chance at making their mortgage payments.
Others candidates for loan modification are victims of decreasing home values and now have no or negative equity. Property values are dropping at a record pace in many areas, especially those who saw extreme appreciation over the past few years. Many homeowners just see no benefit in trying to pay a huge mortgage payment when they are upside down tens of thousands of dollars and property values are still decreasing. In many cases the same house down the street is renting for half of a homeowners current mortgage. These borrowers might be eligible for a note reduction to market value. If you get the right attorney who knows how to handle this situation, you can have your balance reduced substantially which also lowers the monthly payment. Why pay thousands and thousands of extra dollars just to save your credit?
Financial hardship is the textbook definition of a borrower who qualifies for a loan modification. This means that something happened in your life that caused you to lose money, lose the ability to earn money, get your wages cut or many other causes along those lines. Homeowners with a large savings account and plenty of income rarely qualify just because they are upside down on their mortgage.
If you are in foreclosure you may have no option but to turn to an attorney. We can recommend qualified attorneys to you if necessary. However you do not need an attorney to modify your loan per se. Most people facing foreclosure or NOD think that if they cannot afford their mortgage, how can they afford an attorney? Most of the time lenders will delay foreclosure or allow reasonable requests for delays once they find that you a re attempting to modify. There is of course no guarantee that this will occur however. An attorney can file a lawsuit and restraining order in certain extreme cases to prevent the sale of your property. Most people with no housing expense each month are going to have extra disposable cash to help them save their house. Besides, even if you can qualify for a refinance, the loan modification process is cheaper and more sensitive to the homeowner. As long as you do not want cash out, you should consider a loan mod before a traditional refinance.
Example of What You Can Save Modifying with Us
Total savings Over 5 years: $187,326 plus Equity *
Here is how!
Scenario:
· Purchased property in April 2006 for $450,000
· 2 year ARM, 30 Year amortization
· Stated income, 100% one loan
· Interest Only Payment Option, below average credit
· 6.5% interest rate
Let us say that you haven’t been paying at all into principal for the 2 years so your balance is the same. You could barely make your payments before your loan adjusted and your rate now adjusted to what was signed in the loan documents: up to 10.2%.
Your payment went from $2,845 per month to $3,825 --- neither includes paying into principal.