USA Today reports that 11 million homes across the U.S. are facing foreclosure. If you are one of these homeowners, you need to take action. Falling further and further behind on your mortgage payments will only make the situation worse. But what do you do? Who do you talk to and what do you say to get results?

The loan modification process can be a confusing one and dozens of loan mod companies have sprung up to renegotiate loan terms with your bank. While this might sound like a great service, the reality is that there are many scammers out there who will take thousands of your dollars and get no results. In fact, CNN reports that the government recommends that distressed homeowners not use load mod companies and rather do it yourself.

If the prospect of dealing with your bank on a loan modification is a daunting one – and for most homeowners it is daunting indeed – the Emergency Foreclosure Relief Kit can be a huge help. The Kit provides you with the same worksheets, forms, letters, phone scripts and step-by-step process that loan modification companies and attorneys use.

Using the powerful information in the Emergency Foreclosure Relief Kit, you can get your loan modified in four easy steps. First, you’ll receive the information instantly by email. Then simply read the easy to understand information – confusing jargon is kept to a minimum. Next, fill out the included letters and forms and send them to your lender. If you need to talk to your bank directly you’ll learn exactly what to say – and what not to say!

The Emergency Foreclosure Relief Kit will explain why you can do it yourself and save thousands of dollars and why lenders want to work with you to modify your loan. The Kit walks you through the entire loan modification process and explains the many loan mod programs that are available and which one may be right for you. The Kit even works with all the new programs just announced by the government.

The Emergency Foreclosure Relief Kit was put together by a team of industry insiders including experienced attorneys, mortgage experts, and lending executives. The Relief Kit is a powerful tool even if you have missed mortgage payments and owe your lender money, you have received any type of notice from your lender, or your home has lost it’s value.

No one cares more about your home than you do. Why trust a random company that will charge you thousands of dollars to do something that you can do yourself? The Emergency Foreclosure Relief Kit costs only $49.95 and is the first step in saving your home.

I hope you have found this Emergency Foreclosure Relief Kit review helpful. Get the kit, read the material and contact your lender. Get in front of this situation…Don’t let it get in front of you!

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There is finally good news for the millions of homeowners who find themselves under water on their mortgages. On Wednesday the nation’s largest provider of home loans, Bank of America, announced new steps to forgive some mortgage principal to keep homeowners out of foreclosure.

Unlike past program which have focused on restructuring loans to make monthly payments more affordable, Bank of America’s move is one of the first to focus on where the real problem lies: lower home values. Many consumers who bought homes at the height of the housing boom a few years ago now owe tens of thousands of dollars more on their mortgages than their house is worth – a situation known as being under water on your loan.

An increasing number of borrowers have come to realize that the only option available to them is to walk away from the home and completely stop paying the mortgage. The thinking goes: why keep paying off a mortgage on a home that may never get back to its previous value, especially when the option to rent is so much cheaper? These consumers have decided that waiting until their credit records recover and then stepping back into the housing market makes more sense than sticking it out.

The problem for banks like B of A is that each homeowner that walks away from a house costs the bank tens of thousands of dollars in carrying and remarketing costs. Banks are making the calculation that taking some losses now is better than even bigger losses down the road if the housing market continues to deteriorate.

Under the B of A pilot program, a select number of homeowners would have a portion of their principal reduced – in effect acknowledging the fact that the house is now worth less. With a lower principal comes a smaller mortgage and less costly mortgage payments.

The Bank of America offer is now only available by invitation only, but there is widespread hope that this pilot program will be expanded to the millions of homeowners who hold mortgages from the bank. B of A’s leadership on this issue may also encourage other banks to follow suit.

If there is a widespread adoption of reducing principal and not just restructuring over valued mortgages, it could put a real dent in the foreclosure crisis. That is turn would boost the overall housing market which is being dragged down by the excess inventory of foreclosed homes.

The bottom line: if you’re currently facing foreclosure this program will probably not roll out fast enough to help you unless you are one of the lucky few that Bank of America invites to participate. But if you can hang in there a little longer help may finally be on its way.

photo credit: mrkathika

Freddie Mac, one of the two main government-sponsored institutions that set lending standards for home mortgages announced recently that it will be phasing out interest-only loans. This is expected to drastically shrink the number of interest-only mortgages available to consumers.

Freddie Mac has already begun the phase-out after losing money on the loans over the last three years. Nearly one in five interest only loans that Freddie Mac holds are at least three months delinquent. Fannie Mae has also incurred big losses on these types of mortgages but the company has not yet said whether it will phase them out as well.

While smaller lenders say they will continue to make interest-only mortgages available, the lending standards are getting a lot stiffer. Typically consumers select a fixed-rate or variable-rate mortgage and pay only the interest on the loan or the first 10 years, after which they pay for principal and interest for the next 20 years.

Borrowers with good credit can get adjustable-rate interest-only mortgages with a 4.5 percent interest that is fixed for five years. The rate then increases a maximum of five percentage points over the next five years. Under the new tougher lending standards a consumer would have to prove they would be able to pay the fully indexed rate of 9.5 percent.

As a result of the new standards, interest-only mortgages are considered a good fit for only wealthy individuals who need flexibility in their cash flow and who do not intend to own their home for long.

The bottom line: Interest-rate mortgages are not for everyone. If you are considering this type of loan be sure you can meet they monthly payments once the principal portion of the mortgage kicks in, most likely at a higher rate.

photo credit: seier+seier+seier

If you talk to any real estate agent you’ll hear the same mantra: it’s a great time to buy a home. Realtors said it in 2001 when home prices were climbing steadily, they said it when prices peaked in 2005, and they continue to say it today. So what’s the real answer?

There a couple of ways to figure out the timing of the housing market: one involving poring over statistics and one much easier to figure out.

If you’re statistics minded there are three metrics to examine, according to Barry Ritholtz, C.E.O. and director of equity research at FusionIQ, a quantitative research firm, quoted recently in the New York Times:

the ratio of median income to median home prices, which gives you an idea about affordability
the cost of ownership versus renting – if rents in your area are much cheaper than carrying a mortgage that’s a sure warning sign
the value of the national housing stock as a percentage of gross domestic product

Each of these factors were greatly inflated during the housing bubble and are still not back to historical levels. According to Ritholtz there are two ways for these metrics to get back to normal: home prices could drop another 15 percent, or they could remain flat over a period of seven years while the GDP and personal incomes grow. That’s certainly not a vote of confidence in the current housing market.

A simpler method of evaluating the housing market is to simply look at where interest rates are headed. Will borrowing money get cheaper or more expensive? That determines whether you cna buy more or less house.

While it may be impossible to predict whether housing prices have truly bottomed out, all signs point to interest rates climbing over the next few years making it more expensive to finance a home.

The bottom line is this: if you’re thinking about buying a home do it for the right reasons. Don’t view your home as a short-term investment and be sure to compare the cost of buying vs. renting. If you’re in it for the long-haul, then this is as good a time to buy as any. But if you’re looking to make a quick buck, the housing market is not the place to do it.

photo credit: coffeego

Reverse mortgages, also known as a Home Equity Conversion Mortgage or HECM loan, allow you to take money out of your home without the burden of a monthly payment. These types of loans are safe and government-insured by the Federal Housing Administration (FHA), a division of the Department of Housing and Urban Development (HUD).

Probably the biggest “pro” in reverse mortgages pros and cons is the fact that seniors who use these loans can live the rest of their lives in a home with no mortgage payments. There are no credit checks and your home can be financed or owned free and clear to qualify for this program. As a borrower you can choose to get your money out in one lump sum or as a line of credit. Unlike typical home equity lines of credit, a reverse mortgage line cannot be closed if your income or property’s value dips.

Of course, when you are thinking about reverse mortgages pros and cons there are always pitfalls and disadvantages to this type of loan. First, reverse mortgages tend to be quite expensive. There are numerous fees and insurance costs associated with reverse mortgages and in some cases homeowners could be paying as much as $18,000 in up-front payment. These fees are usually added to the loan balance so you will not have to pay them out of pocket, but you will be paying interest on that extra amount, so it can get expensive over time.

In the reverse mortgages pros and cons balance sheet, another “con” is the effect that receiving the extra money can have on your eligibility for certain programs. If a large lump sum gets added to your bank account as a result of a reverse mortgage you may no longer be eligible for Medicaid and other need-based programs. Also, when you have a large sum of money in your account you become a potential target for scammers who want to sell you bad investments, so beware.

If you are considering taking this step keep in mind the reverse mortgage pros and cons discussed here. Reverse mortgages can be a great option for some seniors, but only proceed once you know exactly what you’re getting yourself into.

These low home loan rates, combined with the federal tax credit for first time homebuyers drove up the number of signed home sales contracts for the seventh straight month, the National Association of Realtors reported. The association said that its index of sales agreements rose 6.4 percent from July to 103.8, beating forecasts. The index was 12 percent higher than a year ago, matching similar reporting on home sales from the Case-Shiller home sales index.

The decline in mortgage rates is significant in that the economy appears to be picking up steam, leading many analysts to predict interest rates would start to rise. This clearly hasn’t happened yet, as last week’s rates were the lowest since May when it was 4.91 percent. Mortgage rates hit their record lowest point of 4.78 percent in the spring.

The original goal was for the Fed to buy $1.45 trillion in mortgage-backed securities by the end of this year. However, last week it announced that the goal would not be reached until next March, signaling its confidence in the budding recovery.

At the same time, the Federal Reserve decided to hold its key bank landing rate to a record low of between zero and 0.25 percent. That means that the commercial bank prime lending rate – used to set home equity loan rates, credit cards and other consumer loans – will stay around 3.25 percent.

Analysts say these actions will keep mortgages rates low for now, but they will eventually creep higher as the Fed gradually withdraws from the market and the housing market stabilizes. Homeowners with adjustable rate mortgages need to move fairly quickly because rising rates combined with the expiration next June of a government-backed refinance program, will make it harder to refinance in the future.