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Learn about Mortgages

Learn About Mortgages

Are mortgages secured or unsecured debt? Find out the difference. Can a mortgage be modified, or even cancelled? In some circumstances. Find answers in this Mortgage Information Resource.

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I’m Beginning to Fall Behind On My Mortgage Payments, What Should I Do?

Fall behind on my mortgage payments new jersey lawyer foreclosureMany people struggle to make their mortgage payments, you are not alone. If you’re saying to yourself “I’m beginning to fall behind on my mortgage payments, what should I do now?” Here are some quick and powerful tips that will help you:

 

  •  To answer the question “I’m beginning to fall behind on my mortgage payments, what should I do now?,” you should begin by calling your loan servicer to see what advice they have if you are just beginning to struggle with making your mortgage payments. Your loan servicer is the company responsible for mortgage payment collection. The number to reach them is located directly on your mortgage bill.

    • Your lender will allow you to miss 3 mortgage payments before declaring your loan in default, and then they won’t accept any more mortgage payments.

  • Practice good bookkeeping, this will be important in any solution you may employ down the road if you are faced with needing to apply for a loan modification or file for bankruptcy.

    • It is especially important to have good record-keeping skills if you are self-employed, because it is harder to be approved for a loan modification if you are self-employed, particularly if your finances are not in order or easy for the bank to understand.

  • Keep all of your documents related to your home in the same place, this will make it much easier if you need to call a foreclosure lawyer in the future.

    • The lawyer will need information from you, including home value, mortgage payment, the number of missed mortgage payments, interest rate, expenses, et cetera, so it is helpful if it is all in one place and easy to find.

  • Try your best to keep up with mortgage payments, but don’t be unreasonable. Do not, I repeat, do NOT, begin using your retirement savings or 401K to make your mortgage payments or to pay household bills. This money is nearly impossible to ever replace, and the temporary relief that it provides in paying your bills is not worth the strife that depleting it causes down the road. Further, if you end up filing a bankruptcy to save your home, your retirement money is protected.

  • Research all of your options for saving your home and decide on a solution that works best for your specific situation. Don’t get yourself into a solution that is unrealistic. Usually the best solution for those who have started falling behind on mortgage payments is obtaining a loan modification.

  • Be sure that you will be able to afford the option you settle on. No matter how hard it may be, sometimes moving is the best option if you cannot afford a home-saving strategy, because entering into one that you cannot pay for will only cause more trouble.

 

One of the most important things you can do when you start to struggle making mortgage payments is to learn as much as you can about all of the options that are available. This website is designed to be a great resource for you to do just that.

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Will I Qualify For A Modification If I Am Self-Employed?

self-employed loan modificationSimple answer: no.

Lenders Can’t Understand The Finances Of The Self-Employed

I suppose they just don’t want to.  Maybe they fear they cannot verify the financial information submitted by a self-employed person.  Whatever the reason, this has been a very difficult issue for quite a number of years and given that a large number of people in the United States are self-employed, this issue effects many people.

What, Then, Can A Self-Employed Person Do To Qualify For A Modification?

Start with audited financial statements by a certified accountant.  This will go a long way in convincing your lender that your numbers are real.

It would also be helpful if you have been in business for a number of years.  Many businesses fail in less than five years.  If you have been in business for more than five years, you have proven that you have a reliable income.

Another approach may be to pay yourself a regular paycheck each month just like regular employees do who are not self-employed.  This can be helpful to a lender when underwriting your loan modification.

Understand how the mortgage lender thinks and prepare and submit your information in a form that the underwriter expects and can understand.

To find out if you qualify for a loan modification, read our post: Do I Qualify For A Home Loan Modification?

It will be an up-hill fight but if you start with the ideas above, you may have a chance.

Good luck!

 

 

 

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Do I qualify for a home loan modification?

do i qualify for a home loan modificationWhen trying to obtain a home loan modification, one thing most people want to know up-front is, “Do I qualify for a home loan modification?”

Underwriters evaluate the ratio between your income and your mortgage payments first.

Next, the underwriters look at your monthly expenses and compare these next to your mortgage payments. They subtract your mortgage payments and expenses from your income; this value cannot be in the negative in order for you to qualify.

If your debt to income ratio is OK and your expenses are not too high, you should qualify for a home loan modification which will save your home from foreclosure.

Will I Qualify For A Loan Modification If I’m Self-Employed?

If you’re self-employed, there are certain considerations that the bank makes in evaluating your loan modification application. You must organize your finances in such a way that the bank approves of. If you are self employed and trying to get a loan modification to save your home, read our post: Will I Qualify For A Modification If I am Self-Employed?

 

How Do I Get A Home Loan Modification?

To get a loan modification you must find out what forms your bank requires and send them in exactly the way that they specify. If you want to find out how to get a loan modification, read our post: How To Get A Loan Modification. 

 

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What is MERS?

MERSAlthough it has become less of an issue, What is MERS? is a question I get from time to time from clients as they try to understand just who it is they are dealing with at their home loan lender.

MERS is a warehouse and database for mortgage documents designed to simplify the recording of mortgage documents and the process of trading loans form one investor to another to save the big banks money.

MERS stands for Mortgage Electronic Recording Service.  When you first closed on your home loan, you signed two documents: a Note and a Mortgage. The Mortgage was then recorded in the County Clerk’s Office in your County to let the world know there is a loan on the propriety which is secured by the property. The name on your mortgage document was the home lender you first dealt with and MERS.  MERS kept a copy of your mortgage document in their warehouse and database as a convenience to your lender.  The very next day, your home loan lender transferred your loan to an investor.  In fact, your home loan may have been transferred several times between investors since you first closed on your home loan.  Each and every time there is a transfer of the loan from one lender or investor to another, an assignment of mortgage would have to filed in the County Clerk’s Office in your County and a filing fee would have to paid to the County Clerk.  However, because MERS is warehousing the mortgage document for the lenders and investors and continues to do so even after each and every transfer, there is no need for an assignment or the recording fee.  Brilliant! Right?

Definitions:

The Note is a contract between you and your lender where the lender agreed to provide funds to purchase your home and you agreed to pay the bank back over time with interest.

The Mortgage is a document which is recorded in the County Clerk’s office in the County where your house is located and let’s the world know that your home lender has a priority lien on the property and if you default on paying on the Note, the lender has the right to foreclose on the property in order to pay themselves.

While there was  lot of discussion about whether or not MERS was legal in the early days of the foreclosure crisis, the issue has pretty much been resolved and is no longer a grounds for a defense in a foreclosure action.

Resources:

MERS can help you if you don’t know who your mortgage servicer is. You can use the MERS database to find out who your loan servicer is if you don’t know.  Go the MERS website and enter the Mortgage Identifier Number to find out.

If you need help with a foreclosure action or getting a loan modification, submit your information through our Free Evaluation feature her on our website.

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New Jersey Foreclosure Activity Still High in 2014

foreclosure homeNew Jersey foreclosure activity still high in 2014 according to the latest information from RealtyTrak which tracks the foreclosure market nationwide.  In New Jersey foreclosure filings have picked-up compared with a year ago, but, it still takes more than 2 1/2 years for lenders to evict New Jersey homeowners who can’t pay their mortgages.

According to RealtyTrak, the number of homes in or at risk of foreclosure  in New Jersey rose 55 percent from September of a year ago to September 2013. Foreclosures were all but frozen for more than a year after questions arose about “robo-signing” – in which mortgage industry representatives signed legal documents without checking them. It has resumed in the wake of several legal settlements and court rulings.

Lawyers from New Jersey’s largest foreclosure law firms such as Fein Such and Zucker Goldberg, tell me they filed a very large number of foreclosure cases in September and October in efforts to get many cases that were stalled for months back on track for a Sheriff’s sale.

New Jersey’s foreclosure process is still the second-slowest in the nation, after New York. Other states have already gotten past the worst of the foreclosure crisis, and foreclosure filings dropped nationwide about 27 percent in September compared with a year earlier.

In the third quarter, Florida and Nevada continued to have the highest foreclosure rates.