Loan modifications may or may not affect your credit score. Generally it is believed that a loan modification will have a positive impact on a borrower’s credit score. In case, if the lender has reduced the principle amount of your loan, it will also help you in reducing your debts. Also, if you pay off your debts on time after the loan modification for the next 6 to 12 months, your credit rating will start improving.

However, after the loan modification, if you’re late on your payments or start making partial payments, your credit score will get negatively affected. In addition, the lender would report the principle reduction as “debt satisfied for less than the full amount”. This will also have a negative impact on your credit score.

In certain cases, the lenders would not accept your loan modification request if you’re not delinquent on your mortgage payments. You may have to show that you are 30 days late on your payments. If the lender reports this 30 day late payment to the credit bureaus, your credit score can go down by few points.

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Hello friends,

It’s my pleasure to inform you that we’ve introduced a new look for MortgageFit to ensure a user-friendly online experience for visitors and members. We have simplified our navigation and highlighted various sections which would make it easier for the users to access information from the website.

The various sections on the homepage like - Mortgage Quote, Calculators, Forums, Ask Question and Lenders have been highlighted and given a new look. Apart from this, it has now become easier to navigate the forum section as it comes along with a drop-down menu. So, you can easily choose a category wherein you plan to post your query or participate in discussions.

We’ve shifted and highlighted the search option at the top right corner of our homepage. Members can search information regarding various topics using this option. The new look will also give the users an easy access to the Members Area which helps users to login as a members or join the Community and enjoy the benefits of being a member.

The makeover comes along with a new section - National Average Weekly Mortgage Rate has also been highlighted on the homepage. Members will be able to check out the current mortgage rates as well as last week’s rate. This section will further take you to a graphical representation of the mortgage rates.

The “Ask the Community ” section has been made more prominent in home page, thus making it more visible to the members.

At the right hand side of the homepage, we have highlighted various sections of our website including MortgageFit Blog wherein you can find the recent happenings in the community as well as financial information.

Hope you like the new design of MortgageFit. Feel free to offer your suggestions regarding our new design.

Hi All,

It’s my pleasure to inform you that one of the MortgageFit members, Ken Lambert just received US Patent status for his mortgage product – Alternative Mortgage Fund (AMF) which would hit the market in the next 6 months.

The AMF was created and developed by Ken Lambert Mortgage Enterprises LLC.  This mortgage product would not only benefit the consumers but also the lenders by helping them expand their market, share revenue and profits.

Alternative Mortgage Fund is considered as a challenge to the 30 year conventional loans. It is a mortgage product which would help borrowers to pay off their loans faster than the conventional mortgage. Also, it would not result into any kind of additional costs for the borrowers and would help increase equity in their homes. According to the U.S. consumer direct surveys, around 19% of the current mortgage customers are willing to switch over to AMF if it is available in the market.

When compared to bi-weekly mortgage plans, AMF would help borrowers to save around  $15,000 under normal market situations. This product is also being considered as less volatile than the other adjustable mortgages available in the market.

Ken Lambert Mortgage Enterprises LLC is presently looking for potential lending partners (banks or mortgage companies) for the licensing and sales of AMF. However, the said LLC would be the exclusive user and seller of the AMF.

President Barack Obama had announced Home Affordable Refinance and Loan Modification program in order to help homeowners avoid foreclosure. These programs compensated lenders who lowered the loan payments of borrowers and most of the big lenders agreed to participate.

However, the initiative taken by the government did not work as expected. Most of the borrowers complained that they cannot reach a lender who would help them with this plan. Moreover, with a large number of people losing their jobs, most of them have become ineligible for this program. Some people who were fortunate enough to get a modification later found out those modifications were offered on a 3-month trial basis. This has left some of the homeowners with mortgage dues which they can’t afford now.

So why isn’t the federal initiative working?
Most homeowners blame lenders for the failure of Obama loan modification. There are borrowers who’ve complained that lenders have not responded to their loan modification request. The lenders who agreed to participate in this program did not develop their own plans for loan modification. Most of the lenders are taking more than a month to respond to the borrowers regarding this plan. A recent study has revealed that most of the lenders do not want to modify the loan as they would lose money in such a deal.

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After years of overbuilding, over-investing, quick-flipping, and credit over-extension, we are now facing the real estate crisis - a crisis which has been created due to our own faults. As a result, the real estate market has been re-priced. Now, it’s high time that we go back to the fundamentals of mortgage and follow them to save ourselves from further crisis.

Here are 5 tips which you may consider before you take a mortgage for your dream home:

Down-payment: If you are planning to buy a property, it would be a smart move if you start saving from today. A large down-payment of around 20% will help you in getting better interest rates and lower payments. You will also be able to build some quick equity in your property and thus can refinance the loan at a lower rate in the future.

Long term loans: This is not a good time for buying a property for quick flipping. No one knows when the real estate market would be revived. Venture into the real estate market only if you want to stay in that property for a longer period of time.

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Hi all,

For the first time in MortgageFit, we have a member making more than 4000 posts!!

It’s my pleasure to announce that George M Akerley, one of our moderators have reached this mark.

George has been an active participant of the community since 2007. It’s been a long participation with the community and lots of members and visitors have received his help and support while dealing with mortgage issues.

Though George is a moderator of the Mortgage Know-How Forum, he actively participates in all other forums and even makes sure that no one violates the rules in our community forums.

We believe such a level of participation will inspire other members and visitors to come forward and help others take wise financial decisions or get over financial/mortgage crisis.

Here’s a feedback on George from one of our community members:

Im Glenn Jackson i recently had a very pleasant & rewarding conversation with Mr. George Ackerly George was not only very understanding & informative but gracious i was pleased with the results of our conversation consultation & when we were finished Mr. Ackerly said something in a beautiful tone of voice that made me feel wonderful he said (God Bless you) i love an try & walk within Jesus all day & when & how he finished with those words it felt like two Christians having an understanding.

Congratulations George!!! And let’s hope you’ll enjoy your stay in our forums.

Mortgage interest rates are at record low and you must be planning to refinance your mortgage to take advantage of the low rates. With a good credit score and stable financial situation, you can definitely go ahead and refinance your properties. But again, you should also have a clear idea about the worth of the property. If you do not have equity in the property, lenders won’t refinance your property.

5 Things to keep in mind before you refinance:

• Interest rates: You should refinance your property if it helps you in saving your money. Check out the interest rate on your current loan and compare it with the rate that you would receive after refinancing. This will give you an idea whether you would be saving money or not.

• Refinance Underwater Mortgage: If your mortgage is underwater (i.e. if the worth of the property is lower than the mortgage that you owe), try to assess how far underwater it is. With the introduction of the Home Affordable Refinance program, you may be able to refinance if your loan is not more than the 105% value of the property.

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New set of credit card reforms have been announced by the federal regulators which will come into force from July 1, 2010. The new set of rules will give the credit card users more time to pay their monthly bills, greater advance notice of changes in credit card terms, to avoid retroactive interest rate increases on existing card balances. Apart from this, credit card users will have fewer penalty fees, late charges and interest payments.

Highlights of the new credit card reforms:

Check out the highlights of the new credit card reforms as given below.

• Time limit for monthly bills: Credit card holders will get a reasonable time limit to make their monthly payments. Credit card issuers cannot change the due date without notice. Monthly bills should be delivered to the card holders at least 21 days before the due date.

• Universal default: The concept of “Universal default” should be done away with. Some large credit card issuers have already discontinued this practice.  It is the practice of raising interest rates on customers based on their payment records with other non-related credit issuers.

• Interest rate hikes: There would be limited conditions where the credit card issuer can increase the interest rates.  In case of new transactions, interest rates can increase only after the first year. Also the credit card issuer will have to give 45 days’ advance notice of the change.

• Due dates and times: Credit card issuers cannot set arbitrary deadlines for payments. Early morning due dates should be avoided by the credit card issuers.

• Highest interest balances paid first: Cards with highest interest rates should be paid first or divided on a proportional basis. Right now card issuers apply all amounts over the minimum monthly payments to the lowest-interest balances first.

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The Obama administration has come up with new guidelines for the foreclosure prevention program. It concentrates mainly on how to deal with borrowers who have home-equity loans or other second mortgages.

Most of the borrowers who are delinquent on their mortgage payments also have a second mortgage. However, when the Government announced the $75 billion program to stabilize the housing market, it didn’t concentrate on the question of second mortgages. Thus, the Government has come up with the revised plan which makes it necessary for the lenders to modify the second mortgage when the first mortgage is reworked. The lender’s benefit is that the government will share in the cost of reducing the interest rate on second mortgages for 5 years or it will pay the borrowers to extinguish that debt.

Lenders who will modify 2nd mortgages will receive an upfront payment of $500 and additional payments of $250 a year for up to three years for successful modifications for second mortgages. Apart from this, the borrowers who will be current on the modified loan would receive payments of $250 a year for up to five years. This would be used to pay down the balance of their 1st mortgage.

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This year borrowers will be receiving special tax breaks for refinancing. Most of us overlook the tax breaks available when we refinance our mortgage. You can get special tax breaks on the following:

PMI premiums: Private mortgage insurance or PMI comes into the play when you are unable to pay 20% equity in your home as down-payment. If you have taken out a loan in 2007 or later, you’ll now be able to deduct premiums for loans. The best part is that, this rule applies not only for private mortgage insurance but also for premiums paid for mortgage insurance provided by the Department of Veterans Affairs, the FHA and the Rural Housing Service.

Suppose you took out a loan before 1st January, 2007. You must be thinking that you won’t qualify for the tax breaks. However, if you refinance the loan now, you can take advantage of the tax breaks. But, it should be noted that this deduction is available only to taxpayers who itemize their deductions. The write-off will expire at the end of 2010.

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