How to Stop Foreclosure and Get a Loan Modification – Tips From a Massachusetts Lawyer

How to stop foreclosure, modify your mortgage, reduce your interest rate, and decrease your mortgage payments — Tips from a Massachusetts lawyer.

If you are behind on your mortgage payments, your interest rate is about to adjust, or your payments are simply becoming unaffordable, the first thing you need to do is take action.

The worst thing a homeowner can do is nothing. The mortgage company won’t seek you out to ask you if you want to solve your financial troubles.

Sometimes, simply by calling your servicer and explaining the reason for your late payments, you can actually stop impending foreclosure proceedings and modify your mortgage.

Here in Massachusetts, the mortgage company is legally required to give you a “90 Day Notice” when you default on your payments. This notice — which the mortgage company must provide to you as a condition to starting foreclosure on your home — tells you that you have 90 days before your home can be foreclosed on, and allows you to make up the missed or late payments during those 90 days. If you get one of these notices, it is vital that you take action immediately.

If you take the rights steps (which often means getting help from a qualified Massachusetts mortgage and foreclosure lawyer), you may be able to get your loan modified at this point.

Why? Because the mortgage company wants to keep you in your home as long as it can get a reasonable payment amount from you. It knows that your loan has become unaffordable to you — but if you can prove that you can afford a reduced payment, you often will be able to stop foreclosure or modify your loan.

How to do this? The best way is to get legal ammunition. There are a variety of legal claims that you might be able to make against your mortgage company that you don’t even know about. For example, did you know that if there are material errors in your HUD-1 Settlement Statement, you may be able to rescind your mortgage under the Truth In Lending Act? Or that if a broker put you into a mortgage with the intent that you refinance it in a few years, the broker may be liable for “predatory lending”?

Massachusetts has foreclosure laws that are extremely favorable to homeowners, and the Massachusetts Attorney General has been vigorously enforcing these laws against big lenders. You may even be able to get money damages against your mortgage servicer if they mismanage the money in your escrow account. The number of claims is only limited by your (or your lawyer’s) knowledge of the law.

Once you have the legal ammunition you need against your mortgage company, the next step is to take your claims to them to demand a loan modification or other foreclosure assistance. If they refuse, you can take them to court. In order to get you to dismiss your claims, most servicers will allow the foreclosure to stop or do a loan modification.

So, a foreclosure isn’t always inevitable when you are unable to afford your mortgage payments anymore. With the right help, a default can be the first step in getting your loan modified.

Getting a Mortgage in 2009

With the economy in trouble and the declining housing market all over the news, it might surprise you that now is an excellent time to get a mortgage. However, if your credit is bad, you will likely not qualify. Borrowers with decent credit can get an excellent deal on a fixed-rate, 30-year conforming mortgage. To qualify, you’ll need a good FICO score, a reasonable debt burden, and proof of continuing income.

Mortgage rates will likely dip even lower in 2009, bringing up the question of whether it’s better to borrow now or wait for an even better rate. Mortgage experts tend to disagree on this issue. In simple terms: if you like to gamble, then wait. If you lose sleep at night fretting that rates will soon rise, then borrow now.

Here are some things to consider about the current mortgage market:

Comparison Shop, Especially Now

In a typical economy, one loan is pretty much the same as any other, since most interest rates on 30-year fixed loans are grouped within about a quarter of a percentage point. This is not so today. With the uncertain economy, lenders vary greatly in terms of how much risk they’re willing to assume in loaning money. This is why it’s important to shop around. You’ll want to keep checking often, since home loan rates are continually in flux.

Lock in a Fixed Rate for New Loans

Disregard what you might have heard in less troubled times about the pros and cons of fixed versus adjustable rate mortgages. Nowadays, you’ll always get the best deal on a fixed rate loan, because this is the financial market that congress has designated for support. The time of securitized adjustable-rate mortgages has come to an end, so most banks don’t want to originate ARMs. Lenders no longer offer attractive rates on these risky loans.

Keep Your ARM, for Now

If you already have an ARM that is due for an interest rate adjustment soon, there’s no need to rush to get rid of it. Short term interest rates have taken such a dive that you’re likely to actually see a reduction in your monthly payment. The one-year Treasury bill yield has dropped to less than half a percent; so even if your ARM is indexed to the one-year Treasury bill, chances are you’d still only pay about 3.25% per year. ARMs that are indexed to LIBOR are adjusting to the low 4% range, which is also an excellent rate.

Monitor Your Finances

Getting one of those attractive low interest rate fixed loans is difficult, because Fannie Mae and Freddie Mac have made standards even stricter for loans they’re willing to buy or guarantee, even though both of these megalithic mortgage finance companies are now under government control

Your FICO score should be at least 720 to garner the best possible interest rate, though for a large enough fee, both Fannie and Freddie will guarantee loans all the way down to FICO scores in the mid 600s. You may also need a 20% down payment.

One of the biggest hurdles for many buyers has been the tightening of lenders’ debt-to-income standards. Monthly mortgage payments can’t be more than 28% of gross income for Fannie or Freddie conforming loans, and all monthly debt payments combined (e.g., student loans, auto loans, revolving credit accounts, etc.) can’t exceed 36% of a borrower’s gross income.

For a loan guaranteed by the Federal Housing Administration (FHA), these figures are 29% for mortgage debt, and 41% for combined monthly debt.

Carefully Consider Whether to Refinance Now

Deciding when to refinance boils to down to how willing you are to accept a certain amount of risk. Utilizing one of the many available online calculators can help you make a good analysis. A good rule of thumb is that refinancing is a good option if the new interest rate is a full percentage point below what you are currently paying, and if you don’t plan on moving soon.

The argument for waiting to refinance is that the Federal Reserve and Treasury Department are set on pushing mortgage rates even lower in 2009, and are likely to get their way. This means putting pressure on banks to keep lowering interest rates; not just on mortgage loans, but on all kinds of personal loans as well.

On the other hand, while it seems like a reasonable predication that rates will drop even lower, nothing is guaranteed. Rates have crashed so quickly that trying to wait for rock bottom may be a mistake. If the numbers work for you, you really can’t go wrong in deciding to refinance now.

Tips For First Home Buyers On Getting Home Loans

Buying your first home will likely be the biggest and most important purchase you will ever make. It can be a very stressful and may even leave you sleepless for nights on end wondering whether you are making the right decision – especially where choosing the right home loan is concerned.

With all the other questions that tug at first time home buyers, the question of finding their deposit and obtaining the right mortgage are probably the ones that claim the most attention.

There are a number of different resources that first time homebuyers can consult in order to find some guidance; from financial institutions, government offices, books and the internet there is wealth of information just waiting to be had. However, there are a few things that first time home buyers should keep in mind when shopping around for the right home loan.

Determine just how much house you can comfortably afford. There are online calculators that can help you get a general estimate of what a lender might give you.

However, you should also consider your existing debt, your living expenses and closing costs when trying to establish what your budget should be.

Get your deposit together and find out if you are eligible for the First Time Home Buyer’s grant offered to people who have never purchase or owned a home or property. You may check this on governmental website –

You should try to get at least ten percent of your projected budget’s price as a deposit if you want to avoid paying lender’s insurance on top of your mortgage.

First time home buyers should not feel pressured into making any snap decisions by lenders who use scare tactics to frighten them. Instead, they should shop around to find out what the current interest rates are, who is offering the best deals and just how flexible are the terms.

You should never sign anything without first understanding your mortgage agreement. Find out if there are any penalties for extra payments.

Find out how the interest on the loan is calculated. If you have chosen a variable loan find out the length of each adjustment period. Find out how much of your monthly payments will be covering the interest and how much will go towards the capital.

As long as you do your research and find out as much as you can before making any decision, you can take much of the stress and worry out of this very important time in your life.

Mortgage Sales Letter Tips

A good mortgage sales letter that produces leads from a cold list or generates new business from your old client list is worth 1000 times it’s weight in gold.

Lets say you have a list of 50 clients and 50 leads that you haven’t converted. If you send one letter at a cost of just .42, and $100 for printing. That’s just $142 in total costs for a basic mortgage sales letter.

One new loan can generate several thousand dollars in commission. If you get just one new loan from a mortgage sales letter, you are going to be profitable (assuming you aren’t mailing to an enormous list).

As a result, it’s important to create an effective mortgage sales letter to maximize your lead generation efforts.

The key is to write an effective mortgage sales letter that people read and respond to. Most mortgage brokers don’t know the power of effective writing and rely upon hype and trickery in their letters.

The good news is you don’t need to hype up your letter, and you don’t need to rely on tricks like the old ‘fake looking check in the window’ letter (by the way, this does work, but only if you do it without fooling the recipient).

If you want leads and referrals here are the three most important parts of a successful mortgage sales letter that will help you boost response rates and build your book of business:

1. A Compelling Headline. Almost every mortgage sales letter must have a headline. Why? I’ll let the late great David Ogilvy explain it to you:

“On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.” -David Ogilvy

The job of a headline is to get people interested and excited about what you have to say. For example, a poor headline might say, “Introducing Your Local Home Loan Specialist!”

A better headline would be, “Susan Johnson Saved $498.95 Per Month On Her Mortgage Payment — Here’ How You Can Save This Much or More!”

That headline needs a little work, but it’s light years ahead of the average mortgage brokers marketing letter.

2. Stories Sell. Nothing gets people more involved and motivated to take action than a good story. Instead of cramming a pitch about your products and services down your prospects throat (which puts them into the defensive mindset), tell them a story about a client who saved money instantly. And as a result of saving this money she could pay for child care or get a mini van, or go on a vacation that she has been putting off for a few years.

They key is to write a story that fits into the mindset of your audience. If you are targeting subprime mortgages, tell a story about how a down and out client with no hope. How he brought his family out of a rental in a bad part of town to owning a nice home in a wonderful school district.

3. Call To Action. The next important area of an effective mortgage sales letter is the call to action. You want your prospect to take action and call you or fill out a return reply card.

For example, a weak call to action would be, “Call me at 555-555-5555 between the hours of 8am and 4pm Monday through Friday.”

A stronger call to action would be, “For a free no obligation consultation to see how much you can save on your mortgage payment call me now: 555-555-5555. We can schedule a time to meet and discus your financial situation, or do it on the phone. You can reach me at 555-555-5555 anytime during normal business hours. Or, you can call my toll-free 24-hour voicemail at 1-800-555-5555 and leave your contact information and I’ll send you more information.”

In addition to a headline, a story, and a strong call to action, your mortgage sales letter should include a Post Script (PS), and testimonials. Studies show that up to 80% of your readers will read the PS first. This is where you restate your benefit in a conversational way. Testimonials are very effective in establish credibility, and they reinforce your claims.

If you follow these simple guidelines to a more effective mortgage sales letter, you will generate more qualified leads and referrals.

Sit down and write a mortgage sales letter tonight instead of watching Fringe or Dancing With The Stars. Send it to your current clients, and old leads. You have nothing to lose and everything to gain.

7 Tips on Mortgage Loans

The complicated, long and grueling procedure of mortgage loans leaves most of us exhausted. Most home and office owners or even automobile owners often find it difficult to get it right. In most of these cases the lack of awareness about mortgage loans creates these problems. But they can be easily overcome with some consultation and research. Mortgage loans can be live savers for paying for education, health and property even travel expenses. Moreover, the mortgage loan often helps in debt clearance.

A.Always look for a mortgage loan refinancing company. It helps to get your mortgage loan refinanced. On refinancing your mortgage loans, you can save a lot of money from the deduction or lowering of interest rates. Besides it also helps you to shorten the period of loan repayment tenure.

B.Checking on the credibility of your mortgage loan broker would be a wise decision. Most of the time the borrower banks on the trustworthy and reliable mortgage loan broker for valuable guidance. But this friendly broker is often the one who cheats and robs you of valuable money. You must seek for professionally qualified individuals.

C.Maintain regular information on various accounts from the Financial Service Authority. This would help you to have authentic knowledge regarding the norms and updates of the mortgage loans. It would help you to counter-attack any fraud related to mortgage loans. Besides, this would be a better guide to finding the best deals.

D.When you decide to zero-in with any mortgage loans providing firms, always check for regulated brokers and licensed firms. These consultants and agents are legally allowed to get commissions from the either parties. Always come to an agreeable terms and conditions for your benefit.

E.Plan your resources to prevent any form of over expenditure. In other words calculate your rate of interest and premium from the mortgage loan beforehand. Do not overspend on paying the brokers or the mortgage loan firm. It would be a loss if the fees of the consultants and interests rise higher than amount of loan.

F.Maintaining a bad credit record or registering incorrect personal as well as professional information would have a negative impact on your account. In such cases, contact a specialized mortgage broker or firm that gets you through.

G.Mortgage loans are all about saving your money. Having a secured loan with lower rate of interest would mean comparatively higher saving than an unsecured loan. But, even these secured loans cost high at the end of closing period. Target to get a mortgage loan quote with lower rate of interest and shorter term. By paying a little bit more every month on the premium, reduce the period of re-payment. This was you can save money by paying at a lower rate of interest before completion of the term.

If you are planning to apply for mortgage loans, you should be prepared to take a huge financial responsibility. Definition of the terms used for mortgage has to be understood by the applicants. Contacting the best brokerages and market awareness would not be of any use if you are unaware of the implications of a mortgage loan or have the ability to pay it off.