A little-known strategy for cutting mortgage payments

Homeowners looking to lower their monthly mortgage payments and reduce their interest rate may be able to do so without refinancing. A little-known strategy called recasting or re-amortization is available through some mortgage lenders and servicers, and eliminates the hefty fees and daunting credit requirements of refinancing.

• Re-amortization requires borrowers pay off a lump sum of the principal amount on the mortgage and asking to have the monthly payments reset according to the original interest rate and loan terms. The lump sum reduces the principal, so the new monthly payments decrease slightly and interest paid over the life of the loan is reduced.
• Lenders typically charge an administrative fee of $150 or more to re-amortize a mortgage; however, borrowers are not required to pay closing costs or submit to another credit check.
• Re-amortizing works well for homeowners unable to qualify for refinancing, especially those who are self employed or have low poor credit.
• Homeowners considering re-amortizing their mortgage should be aware that some lenders require a minimum amount to be paid toward the principal in the lump sum. JPMorgan Chase, for example, charges a $150 fee and requires a minimum $5,000 payment toward the principal.
• Another challenge is finding a lender, or loan servicer, that offers re-amortizing. JPMorgan Chase and Bank of America exclude loans backed by the Federal Housing Administration and Dept. of Veterans Affairs, and loans that were sold off and securitized may also need investor approval. By Lynnley Browning

If you're in a mortgage pickle, it may be worth a look-see into this strategy. Call me if you have questions and I'll try to point you in the right direction! - Mike

Distressed Homeowners! RED ALERT!

The Big Banks are Still Opposing C.A.R.'s Bill to Protect Borrowers

The vote is TOMORROW! Please call TODAY!

Call Senator Dennis Hollingsworth Today!
Urge him to vote "Yes" on SB 1178.

Call 1-800-672-3135 and enter my PIN number -- 196519571 I just did and it took 1 minute!

This is an important vote for many homeowners who are not able to make their balloon payments or their mortgage is readjusting, making it impossible for them to continue to make their payments. These homeowners cannot sell the home for what they owe, and if they "walk away" or sell their home in a "short sale", they oftentimes will be held responsible to be taxed on the deficiency. The banks are digging in their heels about this legislation, even though they are getting bailouts by the Federal government to see them through.

Responsible homeowners who have gotten stuck in this bind could use some mercy from the government in the form of not having to pay the taxes on the amount of money they lost the banks on their mortgages. Please know that this legislation will only cover homeowners whose mortgage is strictly for their home and will not cover equity taken out of homes for other purchases!

Call Senator Dennis Hollingsworth Today!
Urge him to vote "Yes" on SB 1178.

Call 1-800-672-3135 and enter my PIN number -- 196519571 I just did and it took 1 minute!

Thousands of responsible homeowners need our help.

Would You Rather Rent or Own?

And the survey says ...

Americans prefer homeownership!

A new national survey gauging attitudes toward housing finds 2/3 of Americans (65%) still prefer owning a home, despite the challenging economic environment and the housing downturn. The Fannie Mae National Housing Survey, conducted between December 2009 and January 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

Being More Careful!

The survey did reveal that homeowners and renters alike are taking a more cautious approach to homeownership. Nearly a quarter of renters polled (23%) said they will buy a home later than once planned. In addition, Americans with traditional, fixed-rate mortgages with predictable payments are significantly more satisfied than those with other types of mortgages.

Why Do We Want To Own? Getting Rich Quick Days Are Over!
Respondents cited non-financial reasons such as safety (43%) and quality of local schools (33%) as driving factors in wanting to own a home, ahead of financial considerations.

Should You Walk Away If You Can't Make Your Payments?
Most respondents (88%) believe that walking away from an underwater mortgage is NOT acceptable, but those who know someone who has defaulted are more than twice as likely to have seriously considered stopping payments on their mortgage.

How about you? Would you rather own or rent, and why? And how do you feel about walking away from a mortgage you can no longer afford?

Struggling Homeowner? Some Welcome News!

The Obama administration on Friday announced adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) program to assist homeowners struggling to meet their mortgage obligations. The program adjustments target three groups: Unemployed homeowners who are unable to make their mortgage payments; underwater homeowners; and homeowners behind on their payments and seeking loan modifications.

Unemployed Homeowners: You may qualify for three to six months of reduced payments while searching for new employment. During this time, payments will be reduced to 31 percent of their current gross monthly income. To qualify, borrowers must, among other things:
1. Be living in their homes.
2. Have loan balances less than $729,750.
3. Provide verification of unemployment benefits.
4. Request assistance within 90 days of delinquency on the mortgage.

Underwater homeowners— If you owe more than your home currently is worth and you are current on your mortgage payments, you may be eligible for a new FHA refinance option that will allow you to refinance your mortgages into new FHA-insured loans equal to no more than 115 percent of your home’s current value. The difference between the original loan balance and the new balance gradually will be forgiven if the homeowner remains current on payments for three years.

Homeowners Seeking Mortgage Modifications Under HAMP, you may be eligible for mortgage principal reductions. Although lenders always have had the option to do so, many have chosen instead to reduce interest rates. However, under the new guidelines, lenders reducing mortgage principal may receive higher financial incentives. The incentives will be paid jointly by the private sector and the federal government through a $50 billion allocation from the Troubled Asset Relief Program (TARP).

The program changes are expected to go into effect in the fall. However, a measure to offer larger incentives to lenders who facilitate short sales or deeds-in-lieu of foreclosure, as well as assistance for unemployed homeowners, will be in place within a few weeks or months, according to the administration.

I will keep you posted!