DETROIT--(BUSINESS WIRE)-- Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, today released a list dispelling the top five myths about loan modification. Intended to better educate homeowners facing the prospect of losing their home in foreclosure, the following list demystifies the most common misconceptions surrounding the loan modification process.

MYTH #1: My bank wants me out of my house. My bank wants my home. Banks and other lending institutions do not want to foreclose. They earn more money if you can make your payments. When they foreclose, they not only lose your monthly payments, but they also have the expense of foreclosing (attorney fees), rehabbing the home, and then selling it (agent commissions). In today's market, there's a good chance they'll have to sell the home at a loss. This is all good news for you - it means the bank is highly motivated to make a deal with you.

MYTH #2: My credit score is bad so I won't qualify. Unlike the option of refinancing out of trouble, which requires you to apply for a new loan, loan modification simply adjusts the terms and perhaps reduces the balance of a loan you already have. Your credit score is much less of a factor in determining whether you qualify for a loan modification. In addition, a successful loan modification can actually improve your credit score over time, especially if it prevents you from ending up in foreclosure or bankruptcy.

MYTH #3: I am not late on my mortgage payments so I won't qualify. I have to miss a payment to be eligible. Early on, this was true. In fact, some early eligibility requirements stated that you had to be 61 days delinquent in order to qualify. In other words, you would have had to have missed two full payments. The truth is that the eligibility requirements are constantly changing and differ among lenders. Many lenders are now working out loan modifications with borrowers who are up to date on their payments. It's difficult to determine whether you qualify until you actually discuss your situation with the lender or with an attorney who is knowledgeable and experienced in loan modifications.

MYTH #4: I would be better off walking away or declaring bankruptcy than modifying my loan. Walking away from the home and filing for bankruptcy are certainly two options, but they are rarely the best options when you are facing foreclosure. If you simply walk away, the lender is unlikely to pursue legal action against you, but in some jurisdictions, the lender can pursue a deficiency judgment against you to collect the difference between what the lender receives for your home at auction and what you currently owe on the balance of the mortgage. Filing for bankruptcy may be better than just walking away, but it can leave a blemish on your credit history that makes it difficult to borrow money in the future. A successful loan modification is almost always a more prudent choice.

MYTH #5: It's too late. I have already received a foreclosure notice. As long as you still reside in the home - that is, you didn't voluntarily abandon it, and the home hasn't been sold at a foreclosure auction - you may still have time to work out a loan modification with your lender. The sooner you take action, the more options you have available and the more time you have to pursue the best option, but you can still negotiate late into the process. By contacting the lender or, better yet, having your attorney contact the lender on your behalf, you demonstrate a good faith effort to work out a solution and can often buy yourself extra time to negotiate a loan modification. Today's Local Market Conditions Report

by: Ralph Roberts - Sun, Jan.25, 2009

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With a new President and new Congress running Washington, what can we expect in terms of housing and mortgage-related moves early in the new term?

Last week we talked about what's coming in the big $825 billion economic stimulus package, including an improved, $7,500 home purchase tax credit. So let's turn to some of the other top items on the immediate agenda.

Number one: Foreclosure relief. In comments on CNBC, Barney Frank, the House Financial Services committee chairman, predicted that Congress and President Obama would devote as much as $100 billion of bailout money to help financially-stressed home owners out of foreclosure.

Under one option, the government plans to encourage lenders to reduce delinquent borrowers' principal balances and payments in exchange for a federal guarantee that they'll incur no additional losses, even if the borrowers default again.

Another approach will be mass modifications not only of delinquent loans but for non-delinquent borrowers heading for payment problems because of job loss or income declines.

A second high priority: Passing legislation allowing bankruptcy judges to step in to prevent foreclosures by unilaterally reducing the monthly payments, interest rates and principal balance for owners who file for bankruptcy.

A third item that's likely to be passed quickly: A return to last year's higher mortgage limits for high-cost areas around the country. That would be welcome news to borrowers, Realtors and builders in California and along the East Coast, where Fannie Mae, Freddie Mac and FHA limits could return to as high as $729,750 -- up from the current $625,500.

Several other items on the agenda that you can expect to see during the early months of the new Congress: Passage of long-stalled anti-predatory lending legislation that would toughen penalties for lenders or brokers who put home buyers into mortgages they couldn't afford.

A key part of the bill creates a suitability test for new mortgages. Loan originators would have be able to document how the terms of a new mortgage serve the best interests of the borrowers.

A little farther down the road: The Obama administration is expected to consider reforms for the federal financial regulatory agencies, and to figure out what to do with Fannie Mae and Freddie Mac, which are both now in federal conservatorship.

The banking regulators have been widely criticized for being too passive during the excesses of the housing boom years. Rather than reining in banks with large subprime and Alt-A production and exposure - Indy Mac and WaMu among others -- they did little to intervene and avoid what turned out to be multi-billion dollar losses. Today's Local Market Conditions Report

by Kenneth R. Harney - Sun, Jan 25, 2009

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In case you missed it, please see below the editorial endorsement by the San Jose Mercury News from this morning, supporting Measure B to bring BART to Santa Clara County, connect with Caltrain commuter rail service and San Jose International Airport, and finally build a rapid rail system that circles the entire Bay Area.

As the Mercury notes, Measure B could hardly come at a better time.  The challenges with the national economy underscore the fact that Measure B - building the BART extension - will create thousands of well-paying local jobs that put people to work, on a transportation improvement that will help tens of thousands of us get to work. 

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Editorial: Vote yes on Measure B to put BART on track to San Jose
Mercury News Editorial
Article Launched: 09/27/2008 08:00:00 PM PDT

Eight years ago this fall, 71 percent of Santa Clara County voters approved a tax to bring BART from Fremont through downtown San Jose to the Santa Clara Caltrain station. Finally, the largest city in the Bay Area and the urban core of Silicon Valley would be on the region's best commuter line, and high-speed transit would ring the bay.

That was before Sept. 11, 2001, and the dot-com crash. Since then, costs have gone up, and like the overall economy, revenue from the 2000 half-cent sales tax has lagged behind projections. The measure was supposed to provide the local share of both construction and operating costs, but now it will cover only construction.

Measure B on this fall's ballot is a one-eighth-cent sales tax to fill the gap in operating money, about $42 million a year. It's a reasonable price to pay for the dividend this line will pay to the region for generations to come. We strongly support it.

Bringing BART to San Jose is if anything more important now, as we struggle to achieve energy independence and to build communities where people don't have to drive everywhere. And make no mistake: Measure B is only about BART. It is very narrowly drawn. It will not be collected until every dollar needed to construct the line is firmly committed, and it cannot be spent on anything but operating the BART line.

While BART has had setbacks, much has gone as hoped. The Valley Transportation Authority already has spent $460 million buying the right of way and on pre-engineering studies. Just last week, the state completed its commitment of $760 million toward the $6.1 billion project. It's money well spent.
Measure B will help secure the final piece of the construction puzzle: $750 million in federal dollars. The Federal Transit Administration will not recommend this allocation until it's confident VTA can operate the line. This is believed to be the final barrier - but if for some reason the federal money still isn't forthcoming, the Measure B tax will never be collected.

Opponents of this project have four main arguments: BART is old technology, the 2000 sales tax money should be spent on other things, the route is wrong, and you just can't trust VTA.

Yes, BART's old technology. It's proven, terrific technology, a fast, reliable system with a high fare-box return. That's why it's so popular. The 2000 tax measure never would have passed with that margin, if at all, for other projects.
On the route, some argue it should go to North San Jose instead of downtown. But the point isn't just to get East Bay commuters to existing jobs. It's a strategy to connect the region's major cities, universities, airports and other institutions, as well as job centers, and to focus new development in places like downtown San Jose, where high-density construction is welcome. Shifting that development to now-suburban areas would suck the life out of a downtown just starting to show real vitality.

As to VTA - it's not perfect. But the new general manager, Michael Burns, has improved its management and revitalized the all-important bus system. Ridership is growing. A state audit this year basically affirmed that the agency is on the right track.

On fiscal responsibility, one of our bellwethers is San Jose Mayor Chuck Reed, as practical and parsimonious a politician as you'll find. Since BART was the passion of his predecessor and political nemesis, Ron Gonzales, he has no personal stake in this.

Reed isn't just supporting Measure B. He's co-chairing the campaign. He believes BART is critically important to San Jose now, but perhaps more important, that it's one of those things you just have to do for future generations.

We agree. Measure B is a referendum on that belief. Vote yes.

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• Most of the aspects are the same as calHFA but underwriting standards are more lenient, esp. when it comes to borrower's debt to income ratios
• As. of Oct. 1, 96.5%  financing, 3.5% down payment required
• borrower pais PMI
• at least 30 day close, 45 day is better
•  Interest rates in mid mid 5-  mid 6s for conforming loan amounts and to mid 6s to 7s for agency jumbo

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