Freddie Mac is replacing its Debt Coverage Ratio program with a new option, called a Standard Modification.  The program is designed to assist borrowers who are ineligible for a Home Affordable Modification Program (HAMP) loan modification or have previously defaulted on a HAMP or other loan mod. For those who are approved, the program reduces a borrower's mortgage principle and monthly payment by at least 10 percent each, thereby making the payments more affordable. To qualify, homeowners must be at least 60 days past due on their mortgage.  Those who are not at least 60 days past due can qualify by proving they are in imminent danger of default, through demonstrating an eligible hardship and providing verification of income. Mortgages that are modified will have their interest rates set to 5 percent and the amortization period (time required to pay off the mortgage) extended to 40 years from the time of the modification. Lenders approving such modification will receive cash … [Read more...]

Everyone's personal financial situation is different. Finding the right mortgage can be a daunting task, especially if you are not familiar with the various mortgages out there.  In the long-run everyone wants to save money on mortgage premiums and interest rates. Either one of these factors will effect the family finances in a major way. However, it is important to understand what mortgage plan you are getting into. What appears to be a great deal on the surface may not be so once you analyze what the plan offers and how it stands up to external factors such as the national and global economy, the real estate market at any given time, Gross National Product (GNP), stock market and interest rates. ARM mortgages Adjustable rate mortgages (ARM) seem at first to be a very attractive since the interest is adjustable. Homeowners are told that rates can go up or down depending upon the market.  Just as there is an advantage for the homeowner when the rates go down, there is an even … [Read more...]