Mortgage rates have never been this low in recorded history (since mortgage rates have been tracked), a testament to the impact the Federal Reserve is having on borrowing and lending in this country. The last few months have been a far cry from the days of 6-8% interest rates in the hey-day of American real estate from 2001 to 2006, before the housing bubble popped so spectacularly.

Now, the only question is whether or not these falling rates will spur even more home buying from investors and homeowners looking to jump into a hot buyer’s market.

Last week, the average rate for a 30-year fixed-rate mortgage loan across the country stood at 3.98%, which was up from previous lows established earlier this year. The weekly drop was a 3.87% decrease, one of the largest weekly drops of the last couple of months. A smaller but still significant margin of decrease was found in 15-year fixed-rate mortgage loans that now stand at 3.14% from 3.24%.

Amid falling home prices – the S&P/Case-Shiller index of home prices in 20 U.S. metro areas fell by 3.7% annually as of November 2011 – and increased numbers of foreclosure listings on the market, low interest rates are very attractive to potential buyers because they offer cheap financing. So far, though, impact of low mortgage rates on improving the real estate market is less than expected.

The main obstacle appears to be a lack of sufficient demand caused by consumers who are either hesitant to buy without reassurance that prices will stabilize in the near future or unable to find financing from lenders who are still dealing with tight credit, toxic assets, and potential lawsuits related to foreclosure fraud accusations.

Add in nearly 11 million American homeowners who owe more on their mortgages than their homes are worth at current price levels, and one can see the difficulty inherent in the market today.

President Obama’s administration is working on helping investors purchase large blocks of government foreclosures and helping homeowners refinance their homes at today’s low rates. As a result, low interest rates could have a positive impact in the near future.

Many Americans today cannot make their monthly mortgage payments. Additionally, for millions of Americans – approximately 11 million as of 2011 – owing more on their home than it is currently worth is a sad reality. This situation is especially bad considering median home prices are only expected to decrease over the next 6-12 months in most forecasts.

Short of prices suddenly reversing themselves, underwater homeowners do not have many options left open – nor do people who, for whatever reason, cannot make their current monthly payments. Fortunately, there is usually the option of a loan modification that is at least a possibility – particularly with federal modification programs either in play now or in the works.

Here we will discuss how you can increase the odds of successfully negotiating a loan modification for your home.

What is a Mortgage Loan Modification?

First, an explanation is in order. A mortgage loan modification is an agreement between you and the lender in which the lender agrees to modify the terms of your mortgage contract to help you continue to stay in the home and pay off the loan. They do this because they would rather have a steady source of income – your monthly payments – than face the cost and hassle of repossessing the home and selling it on the market.

Now, a lender is by no means required to carry out a loan modification. Even under the strictest federal programs, such as those involving HUD, Fannie Mae, and Freddie Mac, loan modifications are not mandatory; a lender simply has to make them available.

What are the Benefits?

The primary benefit of a loan modification is to make living in your home and paying payments more affordable. It will usually accomplish one or more of the following:

- A lower interest rate, which results in lower monthly payments;

- A longer loan term, which also results in lower monthly payments;

- Principal reduction, which reduces outright the amount of principal you owe

Of the three, the third option is the rarest. But, all things considered, hitting on at least one of the above benefits is very possible (and given the number of foreclosures lately, pretty likely).

How Do I Apply?

There are two ways to apply for a loan modification. The first is to ask your lender, typically represented by your loan officer. Banks have procedures to follow and paperwork to fill out, so opening up a line of communication is often the first step.

You can also turn to the federal government. If you have an FHA loan, you can participate in a FHA Short Refinance, designed to help people who owe more than their homes are worth but are not behind on their payments currently. The Department of Veterans Affairs also gives you opportunities to participate in a loan modification program, if the lender agrees. Most of these programs were made possible through the Home Affordable Modification Program (HAMP).

For VA loans, call 877-827-3702 or visit http://homeloans.va.gov. For FHA loans, call 877-622-8525 or visit http://hud.gov/offices/hsg/sfh/nsc/nschome.cfm.

Ways to Increase Your Chances of Success

Once you know what a loan modification can do for you, and you want to apply, you can take certain steps to increase your chances of success.

What Factors a Lender Examines

It helps to know what factors the lender examines and takes into consideration when deciding whether or not to move forward with your loan. The first is your ability to make your current payments. Are you currently behind on your payments? It may sound counter-intuitive, but if you are, you are actually more likely to receive a modification than if you are still current. That is because banks will take delinquent clients as a greater priority over non-delinquent ones. They are protecting their investment, after all.

Another factor is your source of income. If you cannot foreseeably maintain payments on your home, regardless of whether or not you are behind, they are less likely to grant you a modification.

What is the nature of the hardship that is keeping you from making payments? If it is a permanent hardship, banks are less likely to approve the loan because they do not reasonably expect you to be able to make payments in the future.

How long have you been paying on the home? Those who have been paying on their home loans for longer periods of time are more likely to be approved.

Finally, the finances have to make sense for the bank. In other words, you have to show them that keeping you in the home, making payments – even reduced ones – is better in the long run for the bank than pursuing foreclosure. If you can show them this – and even take the extra step of preparing financial projections with you as a borrower versus the bank owning the home and going through foreclosure – then you will have a stronger case.

This last point is critical. After all, one only has to go to an online foreclosure directory, like BankForeclosuresSale.com, to see just how many foreclosure properties are available for purchase for deeply-discounted prices, all to the detriment of the banks that own them.

Turn to a Professional

One major piece of advice is to turn to a professional to assist you with your application. Start with a real estate lawyer and ask him or her to review your contract and the loan servicer’s servicing history to see if there have been any legal violations on the part of the lender since you have had the loan. If so, you are in a very powerful position, as banks are very vulnerable currently to lawsuits for mortgage loan fraud and abuse.

Even if you can find no legal violations, you can still obtain help. Ask an accountant to review your finances and put together a convincing case for the bank to consider. Consult with a mortgage loan counselor who can help you prepare your application. Talk to a credit counselor to repair your credit score, which is reviewed when you pursue a modification. Find a second job if you must in order to provide more income, which always helps.

Communicate Early and Often

Finally, you can increase your chances of success by talking to the lender early and often. Applicants who wait until the last minute, right before their home is set to be foreclosed on, are almost always denied. Communicate to the lender your difficulty with making payments and be an open and honest participant in the proceedings.

Lying on your application is a huge no-no, as any misinformation or deception will only come back later to give you trouble you did not anticipate. There is a temptation to withhold information, but the more data you provide, the better off you will be because banks now expect a certain level of insight into your finances before they will grant you their approval.

In the end, a loan modification is a process by which you work with the lender, not against them. It can happen and does on a daily basis; hopefully now you will be able to benefit from that as well.

Buying a new home is still very much part of the American Dream. We, as citizens of the United States, long to have our own home that we can customize without restriction. When you rent a property, you are often unable to paint the walls and do even minor renovations. In comparison, when you have your own home your creation is no longer limited.

(And that is not even mentioning the myriad of financial benefits to owning versus renting.)

Purchasing a new home takes a lot of planning and effort. You must first decide if you want to buy a new property or a discounted foreclosure property. If you desire to purchase a home that is not in foreclosure, then you can search online or visit a local real estate company. However, if you are interested in getting a home up to 60% below market value, then there are several home listing services, which provides immediate access to distressed properties across the country.

After finding a home, it is then time to get the right mortgage rate. Obviously obtaining a low interest rate can save you a fortune in the long run, but how exactly do you go about getting the right mortgage rate for your needs?

Where to Start

Now that you have decided to purchase a home, it is time to find the right mortgage rate for you. The following steps will help you to obtain the right interest rate, which is not always the lowest.

1. Research Lenders

The first step in getting the right mortgage rate actually involves doing your lender research. It is essential that you find a lender with a good reputation before considering interest rates. Simply make a list of lenders and look online for lender reviews. Narrow down your lender list to include only those with great reputations and positive customer feedback.

2. Contact the Lenders

After making a list of reputable lenders, it is then time for you to talk with the mortgage lender about their rates. It is essential that you ask lenders about the same loan term to ensure that you are getting comparable interest rates. Researching and contacting lenders will provide you with a better idea of which lenders will offer the right rate for you. Remember, do not get sucked into an additional program—stick to your plan and only obtain information for the loan length and type you desire.

Getting What You Want

After researching and talking to lenders, it is then time to obtain additional information and get specific quotes. We will assume that you narrowed your list down to two lenders, each with a relatively solid reputation and competitive interest rates. It is now time to take the process to the next step and discuss the specifics with potential lenders to ensure that you are getting exactly what you want.

The first things you need to talk with the lenders about are your mortgage options. There are a variety of mortgage options such as fixed-rate, adjustable rate, FHA, VA, etc. Each of these options could provide you with different pros and cons. Therefore, it is important that you examine each mortgage option with the lenders.

After deciding which mortgage type is best for your situation, it is then time to discuss interest rates. Which rates do you qualify for? Do you want to buy points to reduce your interest rate? Discuss all of these options with both lenders and then get a final quote. After getting a solid quote from both lenders, it is then time for you to make your decision and pick the lender with the right mortgage rate and options for your home buying needs. Remember that interest rates change on a daily basis and therefore the quote may change from day to day.

In the end, when you decide to purchase a home, it is ideal to get a very low interest rate and a lender with a great reputation. However, sometimes the best lenders have slightly higher interest rates. Although it may seem like a negative trade-off, it is often better to get a lender with a stellar reputation. Remember, you have to work with this lender for the next 30 years—you want a lender that provides incredible customer service and fulfills their roles as a lender while also providing a great interest rate. When looking for the right mortgage rate, find a great lender and a great rate.

The failure of lenders to create reasonable lending standards is one of the reasons why none of that is improving.

We are facing record demand in this country for homes. Buyers are flocking like geese to each open house and each new foreclosure listing, but only a fraction of them actually qualify for lending. The days of zero percent down, bad-credit lending are over, thankfully, but they have been replaced by 20% down, near-perfect credit only lending, which only strangles the real estate market.

Case in point: The Mortgage Bankers Association announced today that it predicts a $40 billion drop in the amount of loans being written this year for buying homes, from $473 billion to $432 billion. Previously, in January, they forecast a figure of $616 billion. Now, the first increase since 2005 will have to wait until 2012.

Fannie Mae and Freddie Mac in particular have tightened their qualifications for a federally-backed mortgage, ironically after pumping billions into the economy in the form of tax credits for homebuyers last year.

With interest rates as low as they can get, and with foreclosure inventory sky high, it is a perfect buyer’s market. The only problem is that many buyers are not getting approved for loans that they need in order to purchase the property, deplete the foreclosure inventory, and increase home prices.

Buying homes is important and contributes mightily to our economy. That is why the government needs to work with private lenders to reduce restrictions and allow more people to buy foreclosures and other existing homes. That will be a stimulus worth the money it is printed on.

In states like Idaho, where foreclosures have come en masse over the past few years, mortgage defaults are up and still high, even though in some places they have dropped from the highs seen in 2009 and 2010. In Idaho, for example, there is approximately one mortgage default per day. Approximately half have went through the foreclosure process to become REOs; the other half either made good on their payments, went the short sale route, or provided deeds in lieu of foreclosures.

Elsewhere, the amount of loan modifications that have been either attempted or fulfilled is down. Mortgage modification rates have dropped 10.5% since 2010. Roughly 557,000 homeowners received some kind of help in the first quarter of 2011, and about 53,000 new loan modifications were issued in the same time frame – down 47% from a year ago.

We can see some indications of a disturbing trend here, if we put two and two together. Mortgage defaults are up in some areas, meaning there are still economic conditions that are forcing the hands of homeowners who have found themselves in tight spots. These homeowners also, on average, are not getting the help they need through loan modification programs (although many do receive help from these programs).

We can only guess at the impact on the market, but suspect that the market will continue to be flooded bit by bit with distressed properties as the shadow inventory being built up by these two combined factors continues to enter the market. This will keep prices depressed, meaning steep discounts are to be had for investors and homebuyers willing to work a little simple math and get into the local real estate market.

High defaults, low loan modifications, and high unemployment will all combine to keep the foreclosure market going strong.

The way mortgage companies interact with homeowners facing foreclosure has irked numerous people throughout the nation, from homeowners themselves to bigwigs in Washington who are starting to take a close look at mortgage companies and lenders. Today, federal loan guarantor Fannie Mae announced new rules designed to change the way lenders and homeowners facing foreclosure interact.

The new rules basically state that loan servicers from lending companies and banks must contact the homeowner both verbally and in writing within the first four months of the loan becoming delinquent. This means that homeowners who do business with Fannie Mae no longer have the option of not taking several steps to notify homeowners that they are delinquent on the loan and are in risk of losing their home.

The rules also state that a home loan provider must attempt to enroll the homeowner in some kind of option that helps the homeowner keep the home. These days, that option more often than not is a loan modification program. We’ve seen some success across the country with this plan, and believe that home loan modification programs really can work if applied correctly.

There are also fees that apply to loan servicers who do not abide by the new regulations.

Will these new rules make a difference? Perhaps, even though economic reasons are why most people are losing their homes these days. At any rate, it is good information for you to know if you buy a home or invest in one through Fannie Mae. We are not sure if this will impact the foreclosure market in a significant way. Foreclosures will still be added, and opportunities for buying at steep discounts will continue to flourish in the foreclosure market in most parts of the country.

Investigate nearby properties today for some irresistible buying opportunities.

This number exceeded analyst’s estimates, which is good news for J.P. Morgan. What is bad news for the company, though, is what is contained within the numbers – a total loss of approximately $2.1 billion due to mortgages and housing-related costs.

J.P. Morgan reported a loss of $1.1 billion on servicing its existing mortgage assets, part of the ‘toxic’ real estate assets that it and many other small and large banks have on their balance sheets as a result of plummeting home values over the past three years. It also reported a loss of $650 million due to a record number of foreclosures, and lost $420 million due to mortgage repurchasing.

Spokesmen for the company predict that real estate-related issues will continue for a while, with the specter of litigation coming from a coalition of 50 state attorneys general regarding fraudulent and unfair mortgage lending practices.

What does this mean for the real estate industry as a whole? Well, J.P. Morgan is just one bank – but it’s a big one, and is the first bank to release quarterly earnings. We can expect the same story – big losses due to mortgages and foreclosures – from the rest of the big banks out there.

All in all, the outlook for this area is not good for banks, who expect more underwater homes, more foreclosures, and more short sales throughout 2011 and even 2012. For real estate investors, this will continue to make it more difficult than it has been historically to get a home loan for a home purchase or investment.

With that being said, buying opportunities still abound. The big banks have a lot of assets still on their books that they have to handle somehow, and will be looking to unload them throughout the year to willing buyers below fair value prices. 

When Mackey had foreclosure problems, she ran to Shanita Lacy – owner of Clean Slate Financial Services. Then after months of waiting, Mackey was taken by surprise when she learned that she may be dispossessed of her home because her straw buyer is now on foreclosure, near to bankruptcy.

Scammers have devised a new way to earn from others properties, while the unsuspecting victim was left in foreclosure, worst to bankruptcy.

The modus operandi goes:

• The alleged scammers choose their financially problematic victims and assure aid in their loan and foreclosure troubles.
• Instead, they acquire straw buyers to buy the properties when the truth is larger mortgages are taken out. The scammer freely walks away with the money.
• This leaves the homeowner and the straw buyers robbed and with bigger financial troubles.

A Pilot investigation said that at least 9 other homes in Hampton Roads are victimized by this scam.

Lacy has allegedly bagged $750,000 from the 9 known cases. The FBI is now on Lacy’s case, but is unsure if the said properties can be regained.

Rodney Ringgold met Lacy in church then she recruited him to be a straw buyer. Money did come until last spring— the money flow halted, Lacy was harder to contact. Then, he discovered that the property that he paid $118,013 for is old and definitely not worth of his money. Ringgold was stunned then declared bankruptcy.

The Virginia foreclosures opened a window for these frauds to self-gratify through robbing.

President of Virginia Mortgage, Neil Phelan was once invited in a seminar where they were taught how to deplete homeowners of their equity. The speaker was proud that he became a millionaire from this safe activity- swindling from naïve homeowners.

Virginia is seventh in the list of most mortgage-fraud-states.

Search Foreclosures for Sale by Virginia Top Cities:

• Alexandria Foreclosures
• Manassas Foreclosures
• Virginia Beach Foreclosures
• Woodbridge Foreclosures

Basically, states have different foreclosure laws but here are the things that you could usually expect if you miss your mortgage payments:

1. You will receive a letter from your lender or the bank representative informing you of your missed payment.
2. If you failed to contact your lender regarding the missed payment, you will receive another letter – this time asking you to settle the unsettled mortgage payments within 30 days or your lender will demand payment of the entire mortgage debt.
3. Failing to settle your amount past due, your lender will now hire a lawyer to act as trustee in the event of the foreclosure filing. The trustee requests for you to attend a hearing at the Clerk of Superior Court.
4. At the hearing, the trustee presents the evidence and if they are sufficient, the court will order for the property to be sold at a foreclosure auction.
5. Notice of the foreclosure sale will be published in the local newspaper. All the other debtors and lien holders will also receive notices.
6. The property will now be sold at a public foreclosure sale. The highest bidder will be given the property’s deed.
7. An eviction notice will be served if you have failed to vacate the premises even after the foreclosure sale has been completed.

Since Florida is one of the states hit hardest by the foreclosure crisis, it is not surprising that everyone in this state have been helping out just to curb the rising foreclosure rate. Not only will the number of homeless families be minimized but it will also protect the local economy.

With the court ordering lenders and distressed homeowners to undergo foreclosure mediation, it is expected that more homeowners will be able to stay in their homes and curb the rising foreclosure rate in the state.

During foreclosure mediation, homeowners and lenders are able to discuss the problems involving the mortgage with an impartial and neutral third party. It is the only venue that will allow homeowners to face their lenders and explore different options to stop foreclosure.

Sometimes an amicable settlement is reached by the two parties and sometimes not. In any case, it is important for the homeowner to have this chance to work out their mortgage troubles. Even the lenders are given the opportunity to save on foreclosure costs by considering other alternatives including loan modification.

In order to ensure that foreclosure mediation is successful, troubled borrowers are advised to be prepared. All financial documents that show the real financial situation should be presented so that the lender could see the entire picture. By doing so, the lenders will also believe that you are serious with avoiding foreclosure.