Yesterday, Freddie Mac announced that the Streamlined Modification program, an initiative that was originally scheduled to start July 1, 2013, is now available to all eligible borrowers nationwide. Under this program, borrowers with loans backed by Fannie Mae and Freddie Mac that are at least 90 – but no more than 720 – days delinquent may qualify for a loan modification without having to submit financial or hardship documentation to their servicer. 

Here’s how the Streamlined Modification Program will work: all eligible borrowers will receive a letter with a modification offer from their servicers that will include details of a three-month trial period plan. The borrower can then choose to accept the offer by submitting a first trial period payment; if the borrower demonstrates their ability to pay their mortgage payments on time for three months, the modification will then become permanent.

The streamlined modification “offers” can reduce your monthly mortgage payment in a variety of ways, including adjusting interest rates, extending payment terms to 40 years, or, in some cases, providing principal forbearance. While counselors at our HOPE Hotline cannot tell you if you qualify for the program before Fannie Mae or Freddie Mac has contacted you, they can walk you through the various modification possibilities to make sure that it would make sense for your unique circumstances. To speak to an HPF counselor for free about the various Streamline Modification terms, call 888-995-HOPE (4673).

Additionally, if you would like to find out whether Freddie Mac owns your loan, use this self-service lookup tool; to find out if Fannie Mae owns your loan, click here.

For additional resources and more information on the Streamlined Modification Program, please click here or see this Freddie Mac FAQ sheet.

A new academic study, reported on last week by Chicago Tribune ‘Homefront’ reporter Mary Ellen Podmolik, found that, when presented with financial documents, people’s eyes focus more closely on the language that is easiest to understand while glossing over the more complicated information. For example, a homeowner may decide on an adjustable-rate mortgage (ARM) after eyeing the initial low monthly payment, never fully realizing that the interest rate reset will result in a higher payment a few years down the road. An ARM reset, coupled with an unforeseen job loss or wage reduction, could challenge a homeowner’s ability to make their mortgage payment. This was the unfortunate scenario that put many homeowners in danger of losing their homes over the last few years.

The academics behind the study suggest that homeowners be required to pass a financial literary test before securing a mortgage – those who fail the test would then be required to undergo housing counseling. Counseling prior to taking out a mortgage, otherwise known as pre-purchase counseling and education, has proven to be an effective tool in preparing people for homeownership; in fact, a recent study found that those who completed pre-purchase counseling and education are one-third less likely to become seriously delinquent on their mortgage within two years of the loan origination. Similarly, another recent study from Freddie Mac found that pre-purchase financial counseling may reduce the delinquency rate of first-time homebuyers by an average of 29 percent.

These two studies, together with the newly released academic study, illuminate a greater need to help homebuyers understand the terms of a mortgage before they sign the dotted line. With this in mind, HPF urges all prospective homebuyers to do the homework and research they need to make the most appropriate mortgage decision in order to achieve sustainable homeownership.

Over the past few days, we’ve received several comments on our blog from readers asking about the Independent Foreclosure Review (IFR) agreement and, specifically, the recent mailing of postcards to those who are eligible for compensation. First and foremost, we suggest that all those with questions visit the OCC’s website and read its list of “Independent Foreclosure Review Settlement Frequently Asked Questions,” which provides detailed answers to many of the questions that were posted on our blog. The FAQ also includes a breakdown of the servicers that are participating in the IFR agreement and those that are continuing with the review process.

Many of the questions we received were about the timing of the expected payments stemming from the IFR agreement with 13 major servicers. As we’ve previously posted, the over four million families who are expected to receive settlement checks from the IFR agreement were sent postcards over the last two weeks; these postcards provided further details on the anticipated payments. We urge those who believe they qualify for remediation via the settlement to check their mailboxes and open all mail that may pertain to the settlement. Additionally, it’s important to make sure that the program administrators have your current contact information, which you can verify by calling the payment administrator, Rust Consulting, at 888-952-9105.

Those who have received an IFR agreement check may have noticed that HPF’s Hotline number, 888-995-HOPE, is also listed in the accompanying letter. Homeowners who are still struggling financially or who are not sure how to best use their settlement payments to handle other debt issues are invited to call HPF to speak with a financial counselor. For more information on HPF counseling, read our previous blog post on the subject by clicking here.

But there’s another reason IFR letter recipients — or anyone looking to get their finances back on track — should consider calling our housing counselors at 1-888-995-HOPE for assistance.

Although many people know about HPF for the foreclosure counseling work we do, our mission is quite broader than that. It’s about helping homeowners get all their finances back on track. After all, rarely is it just the mortgage keeping distressed homeowners awake at night. It’s also the maxed-out credit cards, dwindled savings account, high-interest-rate store credit card balances, the unavoidable student loan payments, the unpaid utility bills, and past-due car loan obligations, too. Such daily financial stress is an all-too-common reality for many American households.

Ideally, to help fix the one is to address the others — and that’s what HPF counselors do through our comprehensive counseling service (which is also free of charge).  And it truly can help.

What exactly is comprehensive financial counseling (or as we prefer to call it, “financial coaching”)?

At HPF, it means working with a trained, professional financial coach over the phone to figure out a realistic budget and action plan that takes into account all your expenses and gets you to your financial goals at a pace that makes sense for you. HPF’s coaches can help you figure out which bills to pay down first, which credit cards to use only in emergencies, and help create a realistic monthly budget that allows homeowners to remain current on all of their monthly obligations. The coaches’ insights can be of particular benefit to consumers who receive one-time, lump-sum funds — such as an IFR settlement check, to bring this discussion back full circle — and aren’t sure how best to allocate them across their financial obligations.

While the coach helps with the immediate need of making a workable plan, it’s equally important to point out that he or she also gives you the insights and financial wisdom you need to make better educated decisions on your own about your personal finances for the long term.

If financial coaching sounds like it can help you, please give us a call.  There are no lectures or harsh judgments on how you’re spending your money — just independent, confidential guidance and support.

This study is the latest of several that validate the effectiveness of foreclosure prevention and pre-purchase housing counseling (see here and here). With so much positive, independently analyzed and verified data highlighting the benefits of housing counseling, it makes the case that every homeowner should have access to a nonprofit counselor, whether they are in distress or just getting their feet wet in the home buying process. In fact, this most recent study even found that repeat homebuyers who complete pre-purchase counseling are able to avoid delinquency more than those who do not participate in a counseling program – proving that even the experienced can use an ally when considering various mortgage options.

The NeighborWorks release also touched on a report from the Bipartisan Policy Center’s Housing Commission, which said that “housing counseling can improve prospective borrowers’ access to affordable, prudent mortgage loans, especially for families that otherwise might not qualify or who may experience other barriers to mainstream lending.” The report itself mentions data from NeighborWorks’ National Foreclosure Mitigation Counseling program (NFMC), noting “counselors can also be an ally in the event of an unexpected financial change and can start the conversation with a lender about ways to help struggling homeowners.”

These studies do more than reiterate that housing counseling works; they also send the message that homeownership can still be a very viable option for those who are mentally and financially prepared. Many people who witnessed the housing market collapse are nervous about pursuing homeownership, fearing that they too might end up facing foreclosure or trapped in an underwater mortgage. These fears, while very real, can cause even the most prepared consumer to ignore the many advantages of homeownership, which includes building equity in your home, tax savings, and, on a more personal level, creating a home for your family and becoming a contributing member of a stable neighborhood or community. It’s important that prospective homeowners do a lot of research and take everything into consideration – the good and the bad – so that they can make a truly informed decision.

HPF currently offers free foreclosure prevention counseling to struggling homeowners and is working with several lenders and organizations on pre-purchase counseling programs that help homeowners before they sign on the dotted line. For more information, call 888-995-HOPE (4673) to speak with a housing counselor today.

HPF frequently sees the same level of trepidation among homeowners when they first call our housing counseling HOPE Hotline at 888-995-HOPE (4673). Homeowners are initially reluctant to reach out for mortgage help for many reasons: they no longer trust their banks and servicers; the processes and programs confuse them; or they are fearful of being rejected for a program for the first, second, or third time. Underwater homeowners, many of whom purchased their homes at the peak of the market and may owe hundreds of thousands more than their homes are now worth, may feel trapped and not know that programs like HARP are available. And seriously struggling homeowners often tell our counselors that they are afraid to contact their servicer because they think it might speed up the loss mitigation process. The reality is, the sooner a homeowner reaches out for help, the more solutions that are available.

When the HARP program was announced as part of the Making Home Affordable initiative, which also includes HAMP (the Home Affordable Modification Program), HPF was designated to be the “call-to-action” for the program, meaning homeowners interested in either program can call HPF’s Hotline to speak with a housing counselor who will guide them through the various options and help begin the application process. Working with an independent third-party counselor is proven to have better housing outcomes, making it the best option for those who are looking for any form of mortgage relief.

For more information on mortgage refinancing or modifications via HARP or HAMP, please call HPF’s HOPE Hotline at 888-995-HOPE (4673).

Mr. Segal’s February 23 column particularly resonated with me.  In January, he was contacted by a robocaller offering an opportunity to lower his credit card interest rates.  Mr. Segal was immediately suspicious of the offer and decided to investigate the company.  It turns out that the company is run by a Florida couple who, according to Mr. Segal, control other outfits that were sued by the attorney general of Arkansas for violating various laws, including the Telemarketing Consumer Fraud and Abuse Prevention Act.

Mr. Segal is understandably outraged that the company continues to find new ways to operate, but he shouldn’t be.  Stamping out individuals bent on preying on unsuspecting consumers is akin to playing Whac-A-Mole – you stamp them down and they often instantly appear elsewhere.

HPF’s HOPE Hotline has received more than 30,000 reports of alleged mortgage scams in the past three years.  Many of the scamsters are repeat offenders – they get charged and then reemerge doing business under a different name.  They know how to circumvent the legal system and are quite sophisticated marketers.  Indeed, when Mr. Segal asked the robocaller where he was located, the person knew to terminate the call.

So take a bow, Mr. Segal, for doing your part to protect consumers in advance of National Consumer Protection Week.  And if you want to help stamp out the rapidly growing legion of mortgage scamsters, tell your readers to call the HPF HOPE Hotline at 888-995-HOPE (4673) to report suspected mortgage fraud. Reported scams are put in a database that is accessed by various law enforcement agencies.  And let your readers know that, if they are in need of FREE loan modification counseling, they can get it simply by calling the HPF HOPE Hotline.

Anyone who demands upfront fees for loan modification counseling is not worth listening to. Especially if the person making the offer is a robocaller.

As a partner of the Loan Modification Scam Prevention Network – a national anti-scam effort comprised of multiple organizations that runs the Loan Modification Scam Alert Campaign – HPF is supporting NCPW by educating homeowners on loan modification scams and directing them to free, legitimate mortgage resources, including our HOPE Hotline.

HPF reminds consumers that one of the leading signs of a loan modification scam is when an individual or organization requires an upfront fee for a loan modification service; doing so is illegal, which is why consumers can call our professionally trained counselors to receive loan modification counseling free of charge.

HPF also encourages consumers to be wary of web-based loan modification services that “guarantee” modifications, since only lenders can guarantee a mortgage solution.

If you or someone you know has been the victim of a scam, call 888-995-HOPE (4673) to speak with an HPF counselor for free. You can also visit our scam warning signs page to learn more about how to avoid being scammed.

Click here to read the news release about the Loan Modification Scam Prevention Network’s support of National Consumer Protection Week.

These statistics are contrary to the many indications that the housing market is in recovery: CoreLogic reported that housing prices are up; RealtyTrac says foreclosures are down; and the US Census Bureau announced that homes are once again being built. These improvements, all reported by extremely credible sources, are very good news for homeowners, especially those who are underwater on their mortgages or whose home values have depreciated because of an abundance of distressed properties in their neighborhoods.

The devil, however, may lie in the details. RealtyTrac’s data reports that, while down on a national average, foreclosure activity has increased in 57% of the nation’s metropolitan areas.  In Tampa, Miami, Baltimore, Chicago, and New York, the housing crisis is far from over. Additionally, CoreLogic’s foreclosure report noted that the 56,000 foreclosures completed in December, while down year-over-year, was still nearly triple the pre-crisis foreclosure level.

And here’s another sobering statistic: as previously reported, there’s been a dramatic increase in calls from homeowners who are current on their mortgages but are in danger of default. HPF counselors continue to remain busy helping homeowners build the budgets and find the solutions that will help them avoid foreclosure.

If you or someone you know is having trouble making mortgage payments, counselors are available to assess your financial situation. Call 888-995-HOPE (4673) to find out more.

In our experience, rarely do mortgage delinquencies occur in a financial vacuum. A study published by TransUnion last year, for example, found that more than 60% of people who were delinquent on their mortgage were also behind on their auto loans and credit cards. It’s an all-too-common scenario.

So, while every one of the counselors are HUD-approved, housing counseling specialists, the vast majority of them are equally prepared to provide more holistic financial counseling to homeowners who need guidance with getting all their finances back on track.  They will help the caller look beyond just the immediate issue of addressing the foreclosure worries, and help them create monthly budgets and realistic “pay back” schedules to clear debts, understand better where and how they are spending their money, and ultimately restore their financial footing.

Although we are known for our housing counseling expertise, having this “big picture” financial counseling knowledge and offering it to interested homeowners through our counselors certainly makes sense.  Logic suggests that someone looking to prevent foreclosure (or, after having received a loan modification, are looking to stay current) has a far greater chance of doing so by getting all his or her finances in order.

The more complete a picture our counselors have of your financial situation, the more likely it is that we can help you manage it — all of it.  And while the thought of sharing all the details of your financial life to an outsider over the phone may seem a bit uncomfortable at first, we really are just here to help. Our counselors don’t judge people or lecture them for how they’ve been handling their finances. Quite the contrary — we understand that personal finances, like life, can get messy sometimes through no fault of your own. Holistic counseling is an ideal way to begin to mop it up when it does.

If holistic counseling sounds like something that could benefit you, just call our Homeowner’s HOPE Hotline at 888-995-HOPE today and let your counselor know.