Due to the decline of property values during and after the rescission, a large number of homeowners are going for short sale in order to get rid of their mortgages. In a short sale, the lender sells off the property at a price which is lower than the outstanding mortgage balance of the borrower. Thus, there results a deficiency amount from the sale of the property. This deficient amount needs to paid off by the ex-homeowner.

The short sale process seems easy but issues get complicated when a borrower goes for a private mortgage insurance (PMI) as he or she is unable to pay a down payment of 20%. The lender will contact the PMI Company in order to recover the deficient amount that results from the sale of the property.

What happens when lender sends the loan file to the PMI company?
The bank will send your file to the PMI company who will decide what they would accept. The PMI company does not have a guideline for what they would accept. The approval for the short sale depends upon the amount of the loss, the coverage ratio and the fair market value (FMV). The coverage ratio is the percentage of the loss that the PMI insures.  It is actually a percentage of the total debt. This percentage can vary widely from one company to another.

What role does a promissory note play in a short sale?
In the recent times, the PMI companies, along with the lenders, have started asking the borrowers to sign a promissory note in regards to the deficient amount. This frustrates both the borrowers as well as their agents. If the borrower agrees to sign the promissory note, the he/she will have to pay back the amount that they receive from the PMI company. This will reduce the losses of the PMI company.

What happens when a borrower refuses to sign promissory note?
Many a times, when the borrower refuses to sign the promissory note, the PMI company refuses to approve the short sale thereby forcing the lender to foreclose the property. If the lender forecloses the property, it will take a long period of time for him to complete the whole process. Thus, the PMI company will be able to put off the payment of claims to the lender for 12-24 months. But again, if the market improves, the lender will make a lower claim which will be a profit for the PMI company.

After months of debate in Washington, the Health Care Reform Bill was finally passed in the House of Representatives and around the country and has been signed by President Obama into law. The Health Care Reform will cost the government around $940 billion over ten years. It will help the government to reduce the deficit by $143 billion over the first ten years. With the coming of this bill, the health care coverage will expand to 32 million Americans who are presently not insured.

Here are some of the provisions of Health Care Reform Bill:

• Exchanges for health insurance: The uninsured and self-employed would be able to purchase insurance through these state-based exchanges. The government will provide funds to states to establish the exchanges within a year of enactment and until January 1, 2015.   Apart from this, separate exchanges would be created for small businesses to purchase coverage for their employees. Illegal immigrants will not be allowed to buy health insurance through any of the exchanges.

• Medicaid: The new Health Care Reform Bill also expands Medicaid to include 133% of people living below the federal poverty level. Illegal immigrants are not eligible for Medicaid. The Federal Government will pay 100% of costs in order to cover newly eligible individuals till 2016. It also requires the states to expand Medicaid to include childless adults starting from 2014.

• Medicare: This new reform will close the “donut hole” (i.e.  the difference of the initial coverage limit and the catastrophic coverage threshold) by 2020. Seniors reaching the donut hole by 2010 will receive a $250 rebate. Also, from 2011 onwards, seniors in the Medicare Part D coverage gap will receive a 50 percent discount on branded drugs.

• Subsidies:  Individuals and families who make between 100% - 400% of the Federal Poverty Level (FPL) will be eligible for subsidies if they want to purchase their own health insurance. However, they cannot be eligible for Medicare, Medicaid or be covered by an employer.

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Hello Everyone,

I’m glad to announce that MortgageFit Community has come up with a Ranking Chart where mortgage companies and lenders will be ranked based on their company profile, services, and other details.

Any representative of a mortgage company willing to get enlisted in the Companies Ranking Chart will have to register with MortgageFit as a lender. After the lenders register, they will have to fill out certain details like:

• Company Name.
• Accreditation details.
• Fees Structure.
• Loan packages.

Depending upon the above information, mortgage companies would be ranked as “Gold“, “Silver” and “Bronze“.

While you go through the Ranking Chart and click on a company name, it’ll open up a page where where you can view the details of the company such as accreditation, fee structure, etc. Apart from this, the lenders will also be able to upload testimonials that they receive from their clients. On the other hand, consumers will be able to ask queries related to their companies and the lenders will be able to give their opinion/suggestions in this regard. The consumers can also give their feedback regarding the companies.

As the lenders are directly interacting with the consumers, it will be easier for them to promote their business. Also, the consumers can easily find out a suitable lender to work with.

The best part is that if you are a lender but you’ve signed up as a Community Member, you can convert your account into a Lenders Account. In order to do so, you will have to contact Sam, the Site Admin. You can get his contact details in the Contact Us page. Once your account is converted, you will be able to fill out your company details.

The Ranking Chart is now available in the Beta version. Thus, changes will be made from time to time. Feel free to share your feedback in regards to the Ranking Chart.

Thanks,

Brian Dela Cruz.

It has been found that many a times, the debt collection agencies go beyond their rights and harass the borrowers. It is our responsibility to know our rights as borrowers under the FDCPA. Here are a list of things that a debt collector may or may not do while contacting you:

Time to contact - A debt collector can contact you between 8AM to 9PM. However, if you work in the night shifts, then the debt collector can contact you at different hours.

Frequency of calls - As per FDCPA, the debt collectors will not be able to call you frequently in order to harass, annoy or abuse you. The debt collectors may call you more than once in a day but six calls per day would mean that they are violating the rules.

Nature of contact - The debt collector can contact you via mail, telephone, fax or in person. Normally, the debt collectors will contact you through telephone.

Contacting during work - Debt collectors can contact you at work. However, if your employer does not allow you to take personal calls, then you should inform the debt collector immediately about it. You should ask them to stop calling you when you are at work.

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