There are many things you can do to speed up the process and increase your chances of getting a loan approved. Here are a few tips:

Most of the time, you can see mortgage payment problems coming. When you do, do not hide away and just sit there. Even if you don’t feel like speaking to the bank or anyone else, you have to confront it and get over it.

Always try to work out a solution and be the one that looks for help. Most lenders will be glad that you came in time while there are still many solutions possible. This whole process will only get harder when you start getting more and more behind on your mortgage.

Always make sure to study approval guidelines before submitting the paperwork. If you don’t even take the time to go through the approval guidelines before preparing your paperwork, why should a lender sort out your mess. He won’t and your application will be denied.

Also, when you’re negotiating about a solution with your bank or a lender, don’t try to get away with extremely low monthly payments. When you get in trouble, banks will try to help you out, but only when you are reasonable. Be sure to offer a well thought out payment that’s fair to both parties.

Never ever try to lie about your income or assets. The bank will almost always find out and you will find yourself in a lot of trouble. Remember that banks have a lot of information about you, your income and your credit. There’s a pretty good chance they’ll find out if you’re omitting information. This is a prime cause of loan modification denial, so don’t underestimate the consequences of omitting information.

Take the time to complete your loan modification application properly. This preparation will increase your chances of acceptance greatly and is most efficient for everyone involved. Just make sure you make a reasonable offer and there is a good chance your loan modification will be approved.

Author: Julie Green

According to a recent L.A. Times article dated July 4, 2009, mortgage defaults have surged to record levels amid rising unemployment and falling home prices. Lenders are expected to move quickly to clear up backlogs as moratoriums on foreclosures expire.

Government and company reports both show that the number of completed foreclosures nationwide slowed sharply late last year and into early this year, largely because of various moratoriums in effect during much of the first quarter.

But anecdotal reports indicate that foreclosure sales have started to climb again in the second quarter. It appears that the pipeline is clearly getting fuller.

In the first quarter, some 1.8 million homeowners nationwide fell behind on their loans by 60 to 90 days, a 15% increase from the prior quarter, according to Moody’s Economy.com. The research firm said that loan defaults rose sharply as well, to 844,000 in the first three months of this year.

California accounts for an astonishing share of mortgage loan defaults. A whopping 135,431 homeowners in the state were hit with notices of default in the first quarter, an increase of 11% from the earlier peak in the second quarter of 2008, according to real estate information service MDA DataQuick. Foreclosure sales in the state have been moderating after averaging a high of 26,500 a month last summer.

In some communities such as Stockton, Calif., where the real estate market has been among the hardest hit in the nation with home prices plunging 60% in the last two years, many people are expecting a large increase in foreclosures.

Sales of foreclosed houses soared last year as investors and first-time home buyers swarmed over what were considered bargain houses. This year it’s been unusually quiet, says Jerry Abbott, a broker and co-owner of Grupe Real Estate in Stockton. That doesn’t make sense, he said, because he sees many houses in foreclosure in the city.

But everyone would like to know where mortgage interest rates are headed in 2009. Particularly in these erratic times. Everyone knows that forecasts are not one hundred percent reliable, but fairly educated guesses based on the recent economic events, can be made.

Low interest rates are promoted by lenders all over the country. But this fact is only applicable for individuals that have credit scores higher than 700. If you desire getting a five percent interest or below, you not only need a credit score above seven hundred, but also need to make a considerable down payment.

If your credit score is under seven hundred, or you don’t have the financial reserves for a huge down payment, you will have to pay a higher interest rate.

Mortgage interest rates have declined steadily the past few months. The bigger question is when do interest rates finally go up again? Because of the interest rates consistently going down, you may lose a lot of money when you buy right now. But if you delay your decision, and interest rates suddenly go up, you also lose.

Numerous people have applied for mortgages the last couple of months. Many lenders have tried to slow the application flow down by increasing their fees, because they are loaded with mortgage applications. The general trend for mortgage interest is that it’s going down, but it’s not unrealistic to expect a bounce in interest rate pretty soon.

This bounce is not a bad thing. What you need to do is hold off on your decision and buy when interest rates are coming down again. The mortgage market will reach it’s bottom in that period and you can benefit from it. Think about getting a fixed rate mortgage if you can. When mortgage interest rates go up again, you won’t regret your decision.

He discovered that the number of foreclosures posted in Online sites far exceeds the sum of listings and sales found in the realtor multiple listing system by about 70%.

Does this really mean that 70% of foreclosures posted in online databases ARE NOT listed or sold? If so, what might be happening to these homes? Are Lenders holding the foreclosures back from being sold because these Zombie banks are insolvent and can’t afford to take the losses?

Or is something else happening? Well, here are three other scenarios which may help to explain the data disconnect.

1.Erroneous Foreclosure Data. The numbers reflected by Realtytrac.com and Foreclosureradar may not be giving a true and accurate picture of foreclosures. Internet companies are great at tracking raw data, however, they may be counting a property as a foreclosure twice: once when the homeowner has missed three payments (as in a Notice of Default) and twice: when the property has been sold at auction. Also a homeowner who reinstates his loan months earlier will often still be counted as a foreclosure on an online site.

2. Short Sales. A short sale takes place when the owner wishes to sell the property at fair market value, but owes more than what the home is worth. After finding a purchaser and collecting his financial data, the homeowner then makes a request to his lender(s) to reduce the principal balance of the loan(s) so that the sale can be consummated. Because a Lender often takes about 9 weeks to review the owner’s application and purchase contract, the Lender can appear to be acting like a Zombie. The auction date for a short sale may be waived by the lender or extended in order to close escrow, and for this reason it can appear that the house may be at eminent risk of foreclosure on an online site ” yet not show up as either a listing or sale on the realtor’s database.

3. Loan Modifications. To an online Foreclosure website, someone trying to modify their loan might appear to be in foreclosure because they may have missed making several payments. The online site will show a property as being in foreclosure even if the lender has agreed to postpone the late payments. And the property will not show up in the realtor’s MLS database because the owner has no intention of selling.

Naturally this does not explain everything. There will still be homes that fall through the cracks; damaged properties with toxic mold for example, that will be placed on hold while the lender settles with a knuckle-dragging, insurance company.

There may also be a logic explanation for the disconnect that might have more to do with the government regulations that banks have to follow than anything else. But the idea of a Night of the Living Dead scenario, filled with understaffed zombie bank personnel walking the earth while they are doing the best they can under these current challenging circumstances, that uhmmmm, that could never happen, could it?

But the government didn’t ask its citizens before it committed hundreds of billions of taxpayer dollars to guarantee loans through various foreclosure prevention initiatives such as FHASecure and Hope for Homeowners, which let troubled borrowers refinance expensive mortgages into more affordable loans.

Nor did it take a vote before it agreed to fund the new streamlined mortgage modification programs for loans backed by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

And now there is the possibility that some of the hundreds of billions of dollars allocated for the Treasury’s Troubled Assets Relief Program will go towards bailing out borrowers.

Taxpayers are mad – especially those who held off buying their own homes or were careful not to spend beyond their means.

“All these idiots who bought homes they couldn’t really afford are going to be rewarded with loan modifications, but what about those of us who didn’t make stupid decisions?” asked Jay Black, a CNNMoney.com reader who rents in Queens, N.Y.

“I could have purchased two years ago using an option ARM, and now the government would be paying to reduce my balance. But I didn’t. What the hell do I get?”

Alice English, of Highland Falls in upstate New York, feels the same way.

“I made $45,000 a year and I didn’t buy a house. I bought a mobile home because I knew I could afford it,” she said.

But then she took a buy-out from her job as a technical specialist for a nuclear power plant, and her finances deteriorated, putting her home in jeopardy. She may lose it. And there’s little any lender will do for borrowers without income.

“My severance package has ended,” said English, “my credit rating is going down the tubes and we are going to bail out big companies and idiots who took an ARM who knew they couldn’t make those payments. And here I sit, no job, no help, but billions are going to help those who created this problem.”

The case for bailing out homeowners is that foreclosures have far-reaching effects. As delinquencies have skyrocketed, most of the country has suffered steep home-price declines which has helped cripple the economy. Helping some homeowners but not others may not be fair, but it’s necessary to keep the economy from deteriorating even further.

“There’s always the issue – ‘I’m paying my mortgage even though I’m upside down and my neighbor is not,’” said Mark Goldman, a real estate professor at San Diego State University.

Letting delinquent mortgage borrowers slide into foreclosure will only do more damage to the entire financial system, according to Goldman. That’s the most fundamental reason to support government funded rescue efforts.

“The appropriate public rationale [for the bailouts] is to support housing prices,” he said. “The reason they’re doing this is to stop plummeting prices and everyone benefits from that.”

Different choices
Still, it’s easy to understand how some people can feel taken advantage of. Consider the hypothetical case of one warehouse manager named John and his colleague Mary. The two make about the same salary and are both married with two young kids and stay-at-home spouses.

A few years ago both bought homes, John’s a modest three bedroom, two bath. He put 20% down and financed $240,000 with a 30-year, fixed-rate loan at 7%. His payment is $1,596 a month.

Mary went for an opulent five bedroom, four bath, 3,500 square foot McMansion that cost $500,000. She put just 5% down and financed the rest with an option ARM, making the minimum monthly payments of just $1,725. But that caused her mortgage balance to balloon, and now Mary has to start paying down her loan’s principal, which has reached $550,000. That means a monthly mortgage payment of $3,659, which she can’t afford.

Luckily for Mary, her lender has reduced her interest rate to 3% for five years, deferred payment on $50,000 of the balance and extended the length of the loan to 40 years, all with the help of one of the new, government-backed rescue programs. That reduced her monthly mortgage bill to $1,790 – not much more than what John is paying for his more modest home.

Mary is essentially able to hang on to her palatial home with the help of some of John’s tax dollars – and as important as that is for the larger economy, it’s hard to argue that it’s fair.

Help too late
Other taxpayers are angry simply because the help that’s now available didn’t come in time for them.

Tony Galindo bought a home in Ridgecrest Calif. for $283,000 in 2005. The one-time career Navy man put $60,000 down and financed the rest with monthly payments of $1,500. His current job with NavAir, which develops weapons systems, pays $6,200 a month, more than enough to afford a nice home. But due to a divorce and some debts incurred by his ex-wife, he lost his house this past June, and can’t buy another any time soon.

“My opinion is that it’s great that the government is going to help people in trouble,” he said, “but where’s my help? I’m eager to purchase a new home but due to the foreclosure on my record that seems years away. I can afford another home, but the foreclosure has closed the door on that.”

Others question why so much of the available foreclosure prevention help targets only severely delinquent borrowers who are at least two or three payments behind.

“Why does a homeowner have to be behind in their mortgage to qualify?” asked Tamila Fiola of Fall River Mass. “Why can’t help be brought to those that are struggling to keep the note current? My sister in law pays over $5,000 a month for her mortgage; she struggles to make it but she does.”

It’s probably impossible for the government to answer those kinds of questions to the satisfaction of all Americans. And yet, the financial turmoil brought on by the mortgage meltdown will likely demand that the government make even more efforts to stabilize markets.

He completemented her on a fine job of marketing to him as a lead-in to what he really wanted. He said, “how can you get me the most money out of my home, compared to another lender.”

The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.

Once that topic was covered in depth, he declared he wanted a first-rate appraiser that would work really hard. This is a way of covertly saying he wanted one that would report in a biased way.

The point being for him, a reverse mortgage lender will lend him a greater amount of money if his value comes in higher.

With home values reducing he is in the same shaky boat as many senior mortgage holders. They want to use the reverse loan to rid themselves of the burden of the monthly payment.

Yet the lender can’t at all times loan an adequate amount to fulfill this wish if the appraisal returns too low. So the poor borrower has to maintain payment on the regular loan until his home value increases enough to give it another shot.

Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.

If you are a strict rule following appraiser, the above statement might tick you off a bit, but come on, it is general knowledge this practice was occurring.

Fast forward to today when everyone is getting the blame for the mortgage fiasco, appraisers included. Appraisers are being scrutinized more so than ever.

Appraisers are getting checked up on more than ever before, and are in jeopardy of having their license revoked if they do things unscrupulously.

All of this important information was relayed to the potential client, and the lender hasn’t heard form hm since. She also warned him that other lenders would possibly assure him the highest possible appraisal.

Most lenders will promise it, but won’t do anything differently when it comes down to it. A decent and honest lender will inform potential clients with all the facts at the risk of losing them as a client. 

That’s OK though. In the end, she’ll sleep much easier at night knowing she did the right thing.

Equifax is one of the primary credit bureaus and is the publisher of myFICO.com. This site provides a wealth of suggestions, tricks and tips that will help you figure out the credit scoring system.

Check out the following basics:

Remember the number 30: Credit card balances should hold steady at no more than 30% of the card limit.

The credit bureau believes that you are responsible with use of credit if this is your situation. If you consider consolidating several credit card balances into a single card, be careful of the single card limit because overloading could hurt your score.

Your Trend Is Your Friend: Payments that are “on time” are favored by the credit bureaus. If your pattern is on time payments, the bureaus know you will probably continue paying regularly and on time. This is the biggest part, 35%, of your credit score. If you have late payments, catch up.

The Trend Is Your Friend: A track record of paying accounts on-time means that you’re likely to continue paying on-time. Credit bureaus like on-time payments. If you’ve been late, catch up immediately. At 35 percent, this is the largest component of your credit score.

Learn From History: Your “credit history” is 10% of your score. So, to hold that history, don’t close credit cards that you don ‘t use.

There are more helpful hints available at the Web site so with additional credit score adjustments to mortgage rates expected later this year, the best way to protect yourself is to be proactive. Identify potential issues in your credit profile and work to improve them.

We all want the best mortgage rate possible, but are not always clear about the best way to get credit scoring formation. Please speak with your loan officer about getting the personal information that you need.

The number of defaults and indeed, foreclosures have been on the rise as sub-prime lenders have been going out of business. However, there is a lot more foreclosure investors out there than you may think.

Will You Be Able to Turn a Profit with Foreclosure Investing? It seems like a simple enough proposition to just obtain a list of properties, which are in default and contact the owners of these homes. Following this, you might be able to close a deal before the bank swoops in and repossesses the home. You could do some repairs on the home and resell it, or keep the home and rent it, and thanks to the built in equity, youre making a profit from the get go, right? Well, not always.

You may be able to make a lot of money in foreclosure investing; enough to support yourself and your family, even pay for luxuries. However, foreclosure investments could also turn into a money pit which could take up all of your time and your money.

There are few people who consistently turn a profit on their foreclosure investments. Why is this? They are in a competitive, crowded market and are going about things the wrong way.

Making Yourself Stand Out To Homeowners in Foreclosure Investing Game. Crowded and competitive is probably understating the case. Foreclosures are a very competitive sector of the real estate market. The media have been giving a lot of attention to foreclosure investing as of late, meaning there are more people getting involved in these investments. Many send out mass mailings to homeowners facing foreclosure, others even bother them with phone calls and knocks on their doors.

Any homeowner who is looking at the possibility of foreclosure is probably being deluged with offers from other investors, along with everything else they’re struggling with. Your mailings will likely be just one of many and it may be destined for the trash! That is, unless you can manage to set yourself apart from the competition; keep reading to find one way to do this.

Take An Ethical Approach To Help Homeowners Facing Foreclosure. Most people who are in danger of losing their home are not that interested in talking to a property investor about selling their home. More than likely, they perceive these investors as vultures preying on the misfortune of others.

So, if you want your phone to ring with people in foreclosure, contact them with an offer to keep the home.

Advanced Foreclosure Investing – Keep Homeowners in Their Homes Instead of Purchasing Their Homes As Your Starting Point. Reason number one is giving homeowners facing tough times a chance to keep their home is simply the right thing to do.

In addition to that, you can make a tidy profit by doing things ethically. You can try to assist the homeowner in negotiating a payment plan with their lender (through the lenders loss mitigation department) and charge a fee for this service. You can get your hands on a nationwide list of contacts at loss mitigation departments easily enough. With so many homeowners struggling to keep their homes, there are tens of thousands of opportunities for you to make money by offering loss mitigation negotiation services.

Lastly, this is the most profitable foreclosure investing approach. In many cases you will end up buying the home. Remember, the loss mitigation process will only work for those owners who got behind, but now recovered their ability to pay. Most won’t qualify for a repayment plan because they can’t prove their hardship is behind them. And they won’t know it until you, the foreclosure investor, helped them to pencil their income and expenses on paper and submit it to their lender.

Now they have undeniable proof they can’t keep it and you’re right back to your original foreclosure investing game plan. Once the reality settles in, they’ll start talking sale. Who will they sell to? You, of course, the foreclosure investing pro. You have now earned their trust and it’s the only next natural step to take.

Interest rates on 30-year-fixed mortgages have dropped this week to their lowest levels in about 37 years.

The recent decline occurred as the Federal Reserve pledged to pour money into the lagging mortgage market in an attempt to revive the broken U.S. housing market.

Freddie Mac reported that the average interest rate on a 30-year fixed-rate mortgages has dropped down to 5.19 percent from 5.47 percent last week. This rate is now the lowest seen since April of 1971.

Interest rates on 15-year fixed-rate mortgages also dropped this week. They are now at an average of 4.92 percent, a decline from 5.2 percent seen last week.

Mortgage rates began immediately falling after the Fed kicked off a new program in late November to try to assist the housing market, by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

We’ll have to see how this all shakes out in the housing market, but one group is quickly taking advantage of the ultra-low rates. Homeowners from around the country are currently scrambling to refinance their mortgages.

Mortgage brokers from across the country are reporting a huge surge of phone calls from borrowers who are now trying to take advantage of the Federal Reserve’s interest rate cut this week.

You should really take the time to think about taking out a 40-year loan to purchase your house.

For many years, as home prices spiraled upwards, many people began being priced out of the real estate market. The American Dream of home ownership was just that for many ….. just a dream.

But the extra 10 or 20 years won’t reduce your monthly payments all that much. Plus you’ll pay so much more in interest to your lender. As a result, your equity will grow very slowly and your home will never achieve being a good investment, or helping you to save and build wealth.

Take this example - look at how much more it will cost to borrow $100,000 and repay it back over 40 or 50 years, compared to the traditional 15 or 30 years in a standard mortgage loan.

There is a basic fact about the mortgage business.  The longer the term of the loan, the higher the interest rate. Why you ask? Because 40 or 50 year loans are riskier since lenders need to wait a longer period of time to be repaid.

With good credit and a suitable down payment, you could probably get a $100,000 mortgage for 15 years at 5.7%. That same loan over 30 years would probably cost you 6%. For 40 years, it would be 6.25%.

Below is a table that demonstrates what your monthly payment would be for both interest and principal — taxes, insurance or any fees or assessments are extra — and the total amount you would pay in interest over the life of the loan:

- $828 a month for a 15-year loan and $48,992 in interest.
- $600 a month for a 30-year loan and $115,838 in interest.
- $568 a month for a 40-year loan and $172,515 in interest.

Quite a suprise isn’t it?  Don’t be fooled.  Proceed with care if you are considering a 40 year or longer loan.