The majority of people losing their homes are people who experience job loss or are amidst a health crisis (FDIC/Foreclosure Statistics 2). Supposing the individual contacts the lender to state his situation, the lender usually notes the account. If the lender chooses to work with the customer on modifying the loan papers to support payments that work within the borrowers budget, often the loan payments that are currently due are not froze during the modification processing period. If the process takes longer than expected, the borrower’s loan could fall into the three-month default period requiring foreclosure action. At this point, the efforts of the lender have become irrelevant.
A Consultant from Mortgage Banking stated that, “low- and moderate-income borrowers who enter a repayment plan are 68% less likely to lose their homes” compared to those who are not granted repayment plans (FDIC/Foreclosure Statistics 2). I would suggest that lenders who receive what they consider to be a valid indication of financial crisis work with the individual to modify his loan. The lender would need to set up procedures to freeze the borrowers current loan repayment plan and allow a reasonable timeframe to implement a loan modification.
Modifying the terms of the note would...
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...owers loan amount unnecessarily increasing his financial obligation just so the broker can make ridiculous amounts of money. Insure that mortgage brokers are educated on mortgage lending by requiring all loan originators to be certified or licensed to originate loans. Equity on a home pending sale insures that the consumer has a personal interest in the home pending sale. A person would be less likely to walk away from large equity in a home pending sale. No equity in a home on a pending listing could lead to a foreclosure because the consumer has no financial interest. Proper investor guidelines specific to qualifying with multiple mortgage payments could eliminate significant reduction in borrowers walking away from an unoccupied home pending sale. These are some of the ways that I feel would make an impact on reducing foreclosure numbers in America today.
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