The key components of President Obama’s foreclosure-avoidance program are loan modification and loan refinancing.

The details of this provision has created an extraordinary opportunity for millions of Americans to either re-finance or modify their existing mortgage.

Home Owners will receive an up-front fee of $1,000 for each modification.

They will also receive monthly cash incentives (as long as the borrower stays current on the loan) of up to $1,000 each year for three years.

The Fair Home Loan Bureau was established following the signing the of the economic stimulus bill to assist, defend, and protect American homeowners from loan modification fraud and abusive banking practices. Fair Home Loan Bureau advisors are available free-of-charge to Americans throughout the country.

It is recommended that no American should begin a loan modification without first consulting a Fair Home Loan Bureau advisor. Call the Fair Home Loan Bureau anytime at

Or for your convenience, you can request that a FHLB advisor call you be filling out the contact information below:

Mortgage Modification Help
Seeking a mortgage modification can be confusing, but there is plenty of help available these days. Most of the time, homeowners are mot aware of their options and not sure who to turn too when they realize they have a financial crisis and cannot make their monthly mortgage payment.

Several options are available to borrowers to seek advice on mortgage modifications:

• Mortgage Modification Company
• Attorney
• HUD credit counselor
• Lender or mortgage broker

The government’s new mortgage modification plan is helping many homeowners save their home by putting together lenders and their borrowers to modifying the borrower’s existing mortgage to lower the payment to an affordable amount. You must reside in the home as your primary residence and show that you have sufficient income to be able to pay the new mortgage payment.

What Documentation is Necessary to Provide to the Lender?
Your lender will want to make sure you can document your income so they will require the following information:

• Your last two paycheck stubs. If you are self –employed, then a financial statement.
• W-2 or 10099 for the last two years.
• Your most recent bank statement.
• Copy of our latest tax return.
• Hardship letter explain your financial situation and why you cannot afford your currently mortgage payments.
• Borrower’s financial statement showing your assets and liabilities.

How Long Will It Take to Get Approved
Mortgage modifications are taking approximately 90 days before you get a response. The lenders are overwhelmed and understaffed so they are not able to get to all the applications quickly. The new guidelines under the government plan should help streamline the process now.

Be patient, but be persistent. Hiring a mortgage modification company will help you facilitate the process since they are experts in this area and can get results for you. If you do decide to do it no our own, then keep calling your lender every day to find out the status of your application.

Do Loan Modifications Really Work?
Past experiences have shown that large number borrowers have defaulted. The modification will work if you can afford the payments. If you do not have a steady income, then you will not qualify for a modification and will need to seek another option. Consult with an attorney or financial advisor to determine which options are available to you.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.

Mistake #1
Do nothing. This is the worst mistake that most homeowners do. They feel helpless, overwhelmed and just do nothing. If you fall behind on your mortgage payments, call you lender and find out your options. Or contact a mortgage modification company or your mortgage broker and consult with them as to what you can do to avoid foreclosure of your home.

Mistake #2
Avoid communicating with their lender. Call and write to your lender and discuss your situation. Find out if you qualify for a mortgage modification plan or whether you qualify to refinance your home.

Mistake #3
Waiting too long. If you are more than 3 months behind in your mortgage payments, your lender could start foreclosure proceedings against you. There is still time to save your home by contacting your lender, a mortgage modification company, your attorney or financial adviser. You have other options. Short sale, selling your house if you have equity, deed in lieu of foreclosure, mortgage modification, and last resort bankruptcy filing.

Mistake #4
Moving out of their home. If you do get a notice of default or some other legal document stating your lender has started foreclosure proceedings against you, do not move out of your home. A mortgage modification company or an attorney can help you negotiate with your lender options for saving your home, giving you more time to stay in our home and sometimes without having to make any mortgage payments while you are negotiating with your lender.

Mistake #5
Falling victim to an unscrupulous criminal who says they can help you save your home. Check out anyone who asks for money upfront and claims to be an expert in handling mortgage modifications or other negotiations to save your home. There are numerous legitimate mortgage modification companies and housing counselors helping homeowners so always check references and credentials before you pay any one to help you save your home from foreclosure. The only person who is legally allowed to charge an upfront fee is an attorney who may charge a retainer for their services.

Mistake #6
Not consulting with a professional advisor and asking for help. Many homeowners are too embarrassed to seek professional help, and as a result they lose their home to foreclosure because they are not properly advised on their options.

Mistake #7
Being in denial and not believing that their lender will foreclose. Lenders are in the business of making money, and if you do not pay your mortgage, they will institute foreclosure proceedings and foreclosure on your home. However, lenders would much rather work with their borrowers and avoid foreclosure. An average foreclosure costs the lender around $50,000.

Mistake #8
No using other assets to save their home. If you have assets, then you may want to consider
selling them to pay your mortgage balance current.

Mistake #9
Not being educated and informed on foreclosure laws. There is a lot of free information available to homeowners on the Internet that they can take advantage of to educate themselves on their rights and remedies with regard to their state’s foreclosure laws.

Mistake #10
Not hiring a foreclosure defense attorney to defend them in a foreclose proceeding. You have rights and remedies to defend yourself in a foreclosure proceeding. A real estate foreclose defense attorney can help defend you and save your home. Seek legal help immediately.

Many times the lender has incorrectly filed foreclosure proceedings, and your attorney will be able to recognize whether they have properly filed the action or not. Also, you may have been a victim of predatory loan practices and be able to rescind your loan. Your attorney will conduct a forensic loan audit to make sure that your lender complied with all Truth and Lending and RESPA disclosure laws. If there is a violation, your attorney can use this as leverage with your lender to get a favorable result for you and save your home from foreclosure.

Step 1
Find out from the lender if the property qualifies for a short sale. Depending on the lender or loan servicer, they will probably need the following documentation to determine if the property qualifies:

• Hardship letter from the seller.
• Authorization letter authorizing a third party to contact and negotiate with the lender.
• Last two paycheck stubs.
• Most recent bank statement.
• 1099 for W’2 forms for the last two years.
• Last two year’s income tax returns.
• Comparative market analysis showing the most recent sales in the area. This can be prepared by a Realtor.

Your attorney, third party negotiator such as a title company or Realtor can submit this information to your lender on your behalf if you sign the authorization letter naming them as your authorized representative.

Step 2
List the property for sale with a local Realtor who will market the property to potential buyers. This is really important because you need the most exposure possible for your home to sell. Be sure to list the home at or slightly below market value so that you will attract a buyer quickly. Another smart tactic is to offer a higher commission than 6% to get the brokers to show the property to their buyers. The lender will have to ultimately approve the commission anyway because they are the one that will be paying it, but it’s a good strategy to get more activity on the property. Your Realtor will advertise in the MLS that the property is a short sale subject to third party lender approval and that the commissions may be reduced so the brokers and the buyers are aware of the short sale, and there is no confusion later on.

Since you owe more on the property than what it is worth, you will not get any proceeds out of the sale anyway so don’t list the property too high. It will just sit on the market, and you will lose valuable time. Your lender will also get a broker price opinion from local Realtors as to what they think the home is worth so most likely the lenders will be reviewing the same comparable sales that you did in determining your list price.

Step 3
Submit your short sale package listed above together with a copy of the purchase and sale agreement and any brokerage listing agreement to the lender for their approval. The lender will pay all the seller’s closing costs, back taxes and HOA or Condo Association dues and the broker’s commission.

Step 4
Follow up with the lender to make sure they received the short sale package, and keep calling every day until a negotiator is assigned. This way you keep reminding them you are out there and you want to sell the house and move on. Today, more than ever lenders want to work with you and avoid a foreclosure if at all possible. Foreclosures on average cost lenders $50,000 per foreclosure.

Step 5
Negotiate the offer with the lender. It may take a few rounds of countering back and forth with the buyer and the lender before the lender and buyer come to terms. Sometimes, short sales fall through because the lender is not willing to accept the buyer’s offer, or the buyer’s get frustrated because the process takes so long and they find another property. It is important that your Realtor explain the short sale process to the buyer thoroughly so they understand that the process can take as long as 90 days or longer. Sometimes it is best to work with an investor on short sales because they are not in a hurry, as they are not intending on living at the property.

Step 6
If the offer is not accepted, then you will need to find another buyer and start the process again. However, by this time your lender will have pre-approved a list price which is acceptable to them so that you can offer the home to sale to the next buyer at the pre-negotiated price. This speeds up the process considerably if you have the short sale pre-approved first before putting the house on the market. Although sometimes the borrower does not have enough time to go through the pre-approval process first and then list the home for sale. That is why it is so important to start the process sooner than later before time runs out, you are in default, and the lender starts foreclosure proceedings against you.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.

What to Do Before You Buy a Home
If you are thinking about buying a home, now is a great time because the interest rates are low and the home prices are affordable. However, if you cannot afford the monthly mortgage payment, insurance, taxes and maintenance fees, if any, then you may want to rent until you save up a larger down payment or your income increases.

Make a list of your assets, income and your debts and other expenses, leaving money for emergencies, and then you can see how much you can afford. Stick to your budget.

Being Responsible and Paying Your Debts on Time
Try and make a habit of paying your bills on time or early and avoid late fees and payments. It’s not a good idea to overspend. Don’t rely on your credit cards to pay your bills. If you get in the habit of staying on your budget and trying to save money as well, then you should be okay in case of a financial emergency. You should have at least 6 months of income saved in case of a job loss, wage reduction or illness or disability.

Of course, you never know what the future may bring, but being prepared can help save your home from foreclosure.

Communicate Early On With Your Lender
If you do get into an unexpected situation that is going to put you in a position that you will fall behind in your mortgage payments, contact your lender right away and discuss options you have.

Early communications can save your home from foreclosure. The lenders want to work with their borrowers. It costs them more money and time if they have to foreclosure on your home, which they don’t really want to do. There are options such as refinancing under the new Obama Home Affordable Modification Program and the Home Affordable Refinance Program
for homeowners who qualify.

Where to Get Help
You can get help by hiring a trusted mortgage modification company to help you negotiate a mortgage modification. Since the mortgage modification company has established relationships with lenders, it’s smart to have them negotiate your modification, and well worth their fee. Yes you could try and do it yourself, but most homeowners don’t have the experience or the time and patience to go through the process. In fact, they could end up wasting valuable time by not knowing who and how to apply for a mortgage modification.

You may also want to seek the advice of an attorney if the lender has already started foreclosure proceedings against you. The attorney and the mortgage modification company will be able to coordinate their efforts. If the lender has already filed a legal foreclosure action, the attorney is the only person who can defend you in a court action. The mortgage modification company can help negotiate the modification at the same time stopping the foreclosure action against you.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.