If you're having trouble making your mortgage payments, the last thing you need is to lose more money. But that's precisely what's happened to a growing number of homeowners who have paid hefty fees to bogus loan modification companies. These outfits promised to work with their customers' lenders to lower mortgage payments--only to take the fees and run.
Preying on People Struggling with Bad Credit Home Loans
If you're having trouble paying your bad credit mortgage, try these options:State investigators across the country are starting to crack down on these companies. The Nevada Mortgage Lending Division recently shut down more than two dozen mortgage modifiers and ordered them to refund payments to customers, the Las Vegas Review-Journal reported.
Washington-based NeighborWorks America launched an education campaign in Southern California to encourage borrowers to seek free help from government and non-profits, rather than paying hefty fees, sometimes as much as $3,000, to companies promising loan modifications.
If you're having trouble paying your bad credit mortgage, try these options:
Washington-based NeighborWorks America launched an education campaign in Southern California to encourage borrowers to seek free help from government and non-profits, rather than paying hefty fees, sometimes as much as $3,000, to companies promising loan modifications.
If you're having trouble paying your bad credit mortgage, try these options:
Bad Credit Mortgage Refinancing
• Refinancing today is tough if you have bad credit, but if you've got some equity it doesn't hurt to try to qualify for bad credit mortgage refinance.
• Contact your lender directly. It's tough to make that call, but it's an important step to take. Your lender has representatives who specialize in addressing situations like yours and can spell out your options.
• Get help through legitimate government and nonprofit sources, such as Neighbor Works america. Check with your local state housing finance agency, which should have information and resources about avoiding foreclosure posted on its Web site.
Poor Credit Mortgage Modification
• See if you can get a loan modification through the federal government's Making Home Affordable program. You may qualify if your loan principal is under $729,750, if your mortgage was originated on or before Jan. 1, 2009, your monthly mortgage payment is greater than 31% of your pre-tax monthly income, and you can document that a financial hardship has made your mortgage unaffordable.
• Check whether you can refinance through Making Home Affordable. To qualify, your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. Contact Fannie Mea or Freddie Mac directly or call your mortgage servicer. You have to be current on your mortgage--no payments more than 30 days late in the last year--to qualify.
FHA Refinance
• Try FHA refinancing. If you already have an FHA mortgage, you may be able to do a streamlined refinance to a better rate with minimal processing. Or you can improve the terms of your home loan with a rate-and-term refinance from a conventional (non-government) mortgage to a new FHA home loan. Finally, if you have enough equity, you can choose a cash-out refinance to 85% of your home's value. Your loan amount does have to fall within FHA's loan limits for your area, which are determined by local housing prices.
Washington-based NeighborWorks America launched an education campaign in Southern California to encourage borrowers to seek free help from government and non-profits, rather than paying hefty fees, sometimes as much as $3,000, to companies promising loan modifications.
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