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Beware of Predatory Loan Modifiers

In a recent NY Times article, Swindlers Find Growing Market in Foreclosures, the author sheds light on the growing problem of predatory loan modification businesses.  A major problem with the practices of these “swindlers” is that time is of the essence in the loan modification process.  Many of the people reaching out to loan modification companies do not have time in their favor. They are in desperate need of some source of monthly financial relief and their mortgages tend to be the most significant drain. Loan modifications aren’t an overnight process. Making the initial contact, obtaining guidance, understanding the process, gathering materials needed for submission and the negotiation process with the lender all take significant time.  The predatory companies make it appear that they are acting on your behalf, however, it may be weeks to sometimes months before the consumer knows they have been taken advantage of.  This passing of time creates an even worse set of circumstances for the borrower.  The victims of these scams are put further into a financial hole with the passing of time and the potential for losing their home grows.

Another issue that is created by these swindlers is the negative image their behavior permeates across the industry.  This is like any other industry where a number of bad apples are spoiling it for the whole bunch.  As a legitimate loan modification company, we completely understand the damage that is being done.  For many people, a bad taste in the mouth already exists due to their original experience with obtaining a loan on their home. These individuals feel like they were taken advantage of by their lender or mortgage broker and did not clearly understand the payment or loan structure they were getting. In some cases, they shouldn’t have qualified for their loan in the first place. This lack of knowledge and affordability has led to the growing financial predicament being faced.  Couple this with Read more

Say Goodbye to the $15,000 Home Buyer Tax Credit. Say Hello to an $8,000 First-Time Homebuyer Tax Credit.

This whole tax credit thing feels like an auction gone awry.  For the last week, we have heard numbers from $15,000 to $7,500 and back up to $8,000. Loan Mitigation Advocates have been involved in discussions with clients and co-workers about the exact make-up of the tax credit – everything from the actual amount of the credit to whom it applies – first time home buyers or all home buyers.  For a while, it seemed that we wouldn’t have a definitive answer.

Well, it looks like we have some answers.  We recently read a blog from Jay Thompson, a Phoenix Real Estate Broker, who has been following the action closely.  Here is a link to his site for those of you who are interested in getting some more insight.  Also, Jay provided a synopsis on the breakdown for the first-time homebuyer tax credit.

The bottom line is that the $15,000 tax credit for home buyers has been reduced to $8,000 and is now only specific for first-time home buyers.

For a chart that breakdowns the first-time home buyer tax credit Read more

$15,000 Home Buyer Tax Credit

Besides loan modifications, another way Congress is looking to stimulate the housing market is to provide deeper incentives for purchasing a home.  The latest is in the form of a tax credit.  The Senate recently voted to include a $15,000 homebuyer tax credit to the American Recovery and Reinvestment Act. 

Here are some of the proposed highlights:

• The money would not have to be repaid to the government
• An income restriction on who can claim the credit does not exist
• The credit is nonrefundable and can be claimed over two years
• The tax credit would be limited to primary residences
• When the credit goes into effect is still unknown

Keep in mind, this is just a PROPOSED bill and the contents of the bill are subject to change.  Both the Senate and the House need to work out any differences in each of their individual versions.  The reconciled bill will go back to voting and must be passed by both groups.  President Obama is putting pressure for a quick resolution and is pushing to have the bill signed within the next few weeks.