How to find Good mortgage Company
Some key characteristics from which you can realize that you are facing a subprime mortgage and one of those important aspects is that you must pay attention at is the level of the interest rate: if it is higher than the market level, it is not a good sign. Moreover, if the level of your mortgage rate is in the 15% range and the offered interest rate is around 5%, then you are definitely facing with a subprime mortgage.
Most homeowners are aware of the basic ways to stop a foreclosure – refinancing, obtaining a loan modification, selling the house, or filing bankruptcy. But depending on the circumstances, there may be more options available in special cases. Three other methods borrowers can use are recasting their loan, examining different repayment plans, and charging off their loan.
Recasting a loan refers to a type of modification of the original note where the missed payments are added to the back end of a mortgage. The life of the loan is extended and the borrowers will eventually have to pay back those missed payments.
Although recasting a loan sounds like a great idea that could help many borrowers get back on track with a regular monthly payment and worry about their arrears at the end of the loan or when they refinance or sell, leave it up to the mortgage industry to mess it up. Mortgage accounting rules have been changed, and many large lenders and Fannie and Freddie no longer recast loans.
Short term repayment plans can be verbally agreed to with a lender or mortgage servicer and usually last from three to six months. Longer term plans need approval from the mortgage holder. Twelve to twenty-four months are fairly common time frames for a repayment plan for seriously delinquent borrowers, although even longer plans can be proposed to avoid foreclosure.
Although there are numerous methods when it comes to loan modification, here are five common ones that banks and homeowners often agree to:
1. Reducing the interest rate
2. Reducing the principal balance of the mortgage
3. Extending the payment period of the loan
4. Reamortizing the loan and the arrears
5. Placing a deferred junior lien on the home
One reason borrowers request financial hardship information and income and asset documentation in the case of a short sale is to make sure that a deficiency judgment has little value. If homeowners claim to have a lot of assets, the bank may just foreclose and pursue a deficiency.
Clear title can not be conveyed through a deed in lieu of foreclosure. If there are tax liens, second mortgages, mechanic’s liens, or similar issues, the bank will not accept the deed in lieu. In that case, the foreclosure will usually go forward if the borrowers can not sell or work out another arrangement.
Fannie Mae and Freddie Mac will occasionally accept a charge-off of a mortgage, rather than pursue a foreclosure. This is like banks charging off a defaulted credit card or personal loan. But this option will likely be used only in a small number of situations, such as when the default is on a small amount of money and the property is severely damaged and the insurance will not cover the losses.
Remember that if you have one of these types of mortgage, the low-doc or the non-doc, you will surely be considered subprime because of the impossibility to prove and check your financial situation. But this could have a strong impact on your credit history or not, depending on your status. For this reason, if you own a good credit but without any documentation, you will be considered as a risk in the eye of a lender. Plus, if you think about the mortgage crisis and the recently housing shock, you will revise your decision. To sum up, there are many ways to determine and discover whether you are facing a subprime mortgage or not, and many options you need to consider when deciding to have a mortgage loan and how your decision could affect your budget.
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Mortgage Company North Carolina
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