After a year of discussion, Attorney General Eric T. Schneiderman of New York and California’s attorney general, Kamala Harris have pointed to the fact that they are closer to an agreement regarding the Mortgage Relief Plan.

There are 3 specific situations in which the Mortgage Relief Plan will be of great help to the homeowners. They are as follows:

1. Mortgage is underwater but homeowner is current on payments: There are around 10 million homeowners who are underwater on their mortgages, i.e. they owe more on their mortgage than their property value. The underwater mortgages are mainly due to the decline in home prices. Thus, though the interest rates are at an all time low, yet they are unable to refinance. If the Mortgage Relief Plan comes into effect, then it would help people who are paying the loan on time to save about $3,000 a year on their mortgage by helping them refinance their mortgages with low interest loans. These low interest loans will be guaranteed by the FHA.

2. Home loan is underwater and homeowner is behind on payments: It has been planned that $17 billion will be set aside for principal reduction for those homeowners who are delinquent on their mortgage payments and owe more than their property value. However, the amount will depend upon how many states decide to participate in the program. Apart from this, it should be noted here that the plan would not assure any minimum amount of mortgage relief by the state.
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With the start of a New Year, most of us have a New Year’s resolution in mind. Why don’t we take a resolution to save money? I guess that will be a better New Year’s resolution compared to anything else. Here are some of the ways by which you will be able to save money this New Year:

Organize your finances: It’s a new year. So, you can take steps in order to get your finances organized. You should get all your paperwork under control. Create a separate place to put the mail that needs attention. This will help you avoid losing important documents and incurring late fees. This will also help you in managing your finances in less time.

Create an emergency fund: Financial crisis can hit you at any moment. It won’t give you a prior notice. In such a situation, the best option is to create an emergency fund.  This will help you in handling an emergency medical situation or car wreckage without any problem.

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Started by Governor Robert Bentley, Hardest Hit Alabama (HHA) is foreclosure prevention program which aimed at mainly helping the homeowners who were unable to return to work after the April 2011 tornadoes. As per this program, those who apply and qualify for this mortgage assistance, will either receive $15,000 per household or may receive assistance of up to 12 consecutive payments. Around 900 people have received assistance about the Hardest Hit Alabama mortgage help program.

The HHA program authorities are trying their level best help more people consider this as an option to save their property.  They are coordinating with  a number of other organizations to make people aware of this program so that people don’t lose their home.

This program is still on and if you want to learn more about the program and its qualifying criteria, then you can take a look at “hardesthitalabama.org”. In order to take advantage of this program, you don’t have to pay a fee.

In a recent development, the U.S. House and Senate have voted in order to increase the mortgage limit for FHA loans to $729,750. This will help the homeowners to get higher and cheaper loans. Currently, the loan limit for FHA conforming loan is $625,500.

Voting in favor of the bill:
The house voted 298 to 121 in favor of the bill. However, it is to be noted here that around 101 Republicans voted against the bill. The Senate, on the other hand, voted 70 to 30 in favor of the bill.

Housing industry groups lobbied in favor of change:
Various housing industry groups such as the National Homebuilders Association had always supported the increase in FHA loan limits. They have always maintained that around 5.3 million homeowners wll be positively benefited from the change. The increase in FHA loan limits will provide borrowers with an affordable financing option. This will also provide a much-needed boost to housing markets.

President Barack Obama is likely to sign the change into law in a few days of time.

Fannie Mae has recently reported a third quarter loss and will be asking for help of $7.8 billion from the Treasury Department.  In a recent report, the government-sponsored enterprise had reported a net loss of $5.1 billion in the period between July and September. This loss is due to the defaults on loans which were made before 2009 and consequent losses that are linked to a decline in interest rates.

It has been reported that Fannie Mae is working forward in order to reduce the losses.  Both Fannie Mae and Freddie Mac have survived on the aids from the Treasury Department since 2008 after the sub-prime mortgage crisis took place.

How will Fannie Mae pay off the aids?
As per the Stock Purchase Agreement with the Treasury Department, Fannie Mae and Freddie Mac will pay 10% dividend in exchange for taxpayer support. Till date, both the organizations have received about $185 billion in aid and returned about $32 billion in dividends.

The $7.8 billion aid request by Fannie Mae today includes $2.5 billion that will be repaid to Treasury in the form of dividends on the U.S. stake.

Good news for the borrowers!! Federal regulators and nation’s largest mortgage servicers have announced that around 4 million borrowers, who had faced the problem of foreclosure since early 2009, will now have the chance to get their foreclosure cases reviewed for potential wrongdoing.  Some of the examples of financial injury can be the miscalculated fees charged to borrowers, foreclosure of property when borrower has filed bankruptcy, foreclosure of the property when borrower had applied for loan modification and so on.

The foreclosure review deal:
In the beginning of this year, around 14 servicers agreed to hire independent consultants in order to evaluate whether or not borrowers suffered financial losses as a result of the foreclosure process. If any error is found, the consultants will let the financial firms know what compensation should be granted to the homeowners.
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The housing market has still not improved and as a result the homeowners have become desperate to get a mortgage and buy a property. Due to this, the homeowners are turning out to be an easy prey for the mortgage scammers. These scammers will say what you want to hear and you will start trusting them and then sign on the dotted lines. Con artists and scammers are duping a large number of homeowners in this way every year and the number has increased in the last few years.

In order to avoid getting scammed by the con artists, its better that you become aware of the common mortgage scams. Here is a list:

1. Theft of deed: This is one of the scams which have become very common in the recent times. In order to get better interest rates, the homeowners/borrowers are lured into signing away their properties to scammers who pose as mortgage professionals. These scammers convince the homeowners that they will modify or refinance their home loans at a better rate and ask them to sign the supposed modification papers. The borrowers actually give away their properties to these con artists once they sign those documents. In order to avoid this scam, it is better to read the documents before signing on the dotted lines. Always remember that if it’s too good to be true it probably is.

2. Loan modification scams: Due to the crisis in the mortgage market, loan modification has become quite common. Thus, scams related to loan modification has also increased. It is to be noted here that loan modification does not require any kind of upfront fees. A large number of homeowners fall prey to scam artists who demand upfront fees in order to modify the mortgages. Homeowners should clearly understand the fact the upfront fees are illegal.
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The Federal Housing Finance Agency, Fannie Mae and Freddie Mac have announced an improved Home Affordable Refinance Program (HARP). Experts are of the opinion that this will allow quite a large number of delinquent borrowers to refinance their existing mortgages.

What is the new HARP all about?
Under the new HARP, those homeowners whose mortgages are owned by Fannie and Freddie, but are underwater, will be able to refinance their mortgages. Under the earlier version of HARP, the borrowers were allowed to refinance only up to 125% of the property’s appraised value. In the new version, this cap has been removed. Due to this cap, homeowners of the states that were hardest hit by foreclosures such as Florida and California were unable to take advantage of this program. As the cap has been removed now, large number of borrowers will be able to take advantage of this program.

Apart from this, HARP has been extended through December 31st, 2013. Those borrowers whose loans had been sold to Fannie or Freddie on or before May 31st, 2009, will be able to take advantage of this program.
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Unemployment and financial crisis have created havoc in our lives. In a recent survey, it has been found that there is a gap in Americans’ ability to pay their mortgage after they became unemployed. Around 68% of the homeowners have claimed that once they lose their jobs, they wouldn’t be able to make mortgage payments for more than 9-10 months.

Here is a list of 5 ways which will help you in dealing with this problem of mortgage gap:

1. Rent out a portion of your home: This is a good option to earn some extra money which will help you in paying off your mortgage. You may even rent off a single room to generate some extra income.

2. Look out for help: There are various government organizations, non-profit agencies as well as social programs which will readily help borrowers when they are facing financial hardship.  The National Council of State Housing Agencies, Home Affordable Modification Program, Hope Now are some of the organizations to contact and take help from. They will look into your situation and let you know what type of help you may expect to receive.
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Paying off the mortgage early is always a good option to go for provided you have the required money. A lot of people have seen the foreclosure crisis. Now people want be safe and secure to some extent by owning their home free and clear.

Here are 3 ways which will help you in paying off your mortgage in a safer and faster way. You can compare the options and go for the one which you think will suit you the best:

1. Pay more toward your mortgage: You can use the various online mortgage calculators and find out how much to pay more so that you can significantly shorten the length of your loan. You will be surprised to find that paying as low as $100 extra will help you in reducing the term of your loan by quite few years. The lower your principal gets, the more every payment is applied to principal. This is because a less amount will go toward the interest expense.

However, you should make sure that the extra payment is applied to the principal balance. Apart from that, before paying extra, you should check out whether or not a pre-payment penalty clause is mentioned in your loan docs.

2. Go for biweekly payments: Paying your mortgage payments biweekly will help you paying off the mortgage faster. There are 52 weeks and 12 months in the year. If you pay half of your regular mortgage payment every alternate week, you’ll have made 26 half-payments which is equivalent to 13 full monthly payments, at the end of the year. Thus, it will help you make one extra mortgage payment which, in the long run, will help you pay off the home loan quite faster.

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