People had a lot of expectation from the Home Affordable Mortgage Modification program (HAMP) as introduced by the Obama Government. This program was considered to be an excellent initiative aimed at helping the borrowers residing at some of the the worst-hit states. But is the program a success in reality? Most of the experts do not agree. Check out the 4 reasons why Home Affordable Modification failed:

1. Very few foreclosures were being stopped due to this program:
This program has only helped very few borrowers in stopping foreclosures on their property. In most cases, it was found that banks lost the paperwork of the borrowers. Thus, temporary modifications could not get converted into permanent ones. It has been found in a survey that in case of every 100 foreclosed upon properties, the mortgage modification program could save only 6.

2. The loan modification program can ruin your credit score:
In order to save their properties, a large number of underwater borrowers have applied for mortgage modification.  Though most of the lenders give a trial modification program to the borrowers, in most cases, none of them qualify for a permanent modification. However, as the borrowers get a modification, it will have a negative affect on their credit report. Their scores would go down by 100 points. The few borrowers who get a permanent modification will get the chances of improving their scores. However, those who do not get a permanent modification will have to face further blemishes on their credit report.
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In the recent times, the Obama government as well as the private lenders have started considering principal reduction programs for homeowners who are underwater. However, the Internal Revenue Service (IRS) has issued a new advisory to taxpayers who would get such assistance from the lenders.  Let’s check out how the principal reduction on underwater mortgages will affect the taxpayers:

• Loans on which the taxes are forgiven - Most people have the wrong opinion that the federal tax exclusion applies to all types of home loans. However, it is not so. It applies to mortgage balances on principal residence only. Second homes, rental or business property are excluded from the tax forgiveness.

• Debt amount to be forgiven - The maximum debt which can be forgiven under the law is $2 million for married taxpayers filing jointly and $1 million for single filers.

When can you claim tax deductions?
There are certain grounds on which principal debt would be reduced. Principal reduction will be done by the lender only if the loan has been used to build, buy or improve one’s primary residence. If you’ve used the loan amount to pay off credit card bills, buy cars or invest in stocks, then it won’t be considered eligible for tax exclusion.

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There is a lot of misconception and misunderstanding amongst people regarding the social security benefits. Most of us who want to get social security benefits hardly know how one can maximize the benefits. Let’s check out seven things that one should know about social security:

1. Calculation of your social security benefit: The benefit that you receive from social security will be based on your highest 35 years of earnings. The number of years you work will matter. The years you did not work will be counted as 0. Thus, the more years you work and the more you earn, the greater will be your benefit.

2. Primary insurance amount: This is the amount that you would receive when you reach the full retirement age. You should know your primary insurance amount as your calculations for benefits would come from this figure.  You can find this figure from your annual Social Security mailing or by visiting www.ssa.gov.
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Forensic loan audits are the latest variation of loan modification scams. California Department of Real Estate and the State Bar of California have warned homeowners to avoid such scams because these loan audits offer no help towards saving their home from foreclosure.

What is forensic loan audit all about?
In this scam, the homeowners are made to believe that will be able to find errors, improper documentation, or outright illegal activity in the way their lender has originated their mortgage. Thus, the homeowners will have sufficient proof and documentation to challenge the lender and get assistance from him. The companies offering such services would “only” charge an upfront fee. The advertisement related to these scams can be found in the newspaper, radio and television. However, experts are of the opinion that the audits provide no benefit. Moreover, the foreclosure consultants are not allowed by law to collect upfront money for the services that they provide.

Does legitimate forensic audit provide any help?
Forensic loan audits, along with loan modification consultants try to cash in on the fear and desperation of the property owners who are facing foreclosure. There is no statistical evidence to support such claims. This is even true for those forensic auditors who are a licensed, legitimate and trained.

Thus, if you’re facing foreclosure, then your best option would be to contact your lender immediately and apply for a loan modification. Depending upon your financial situation, it is your lender who would help you know whether or not you qualify for any assistance. Your lender will offer you better help than these scam artists.