We Save Homes, Inc.

Families forced to pay mortgage with credit cards

2010-01-11T09:02:00.000-08:00

Up to 1m people have borrowed money on their credit card to pay their mortgage or rent over the past year.

This is according to research done by the housing charity Shelter who calculate 6% of UK homes are affected.

They believe it is people in lower social groups who are most likely to need to use their credit cards, but that the middle classes have also been affected.
Kay Boycott, the Director of Policy at Shelter, spoke to the BBC's Simon Jack.

Obama mortgage rescue: Only a few get lasting help

2009-11-20T11:04:00.000-08:00

NEW YORK (CNNMoney.com) -- Only a tiny percentage of troubled homeowners have received permanent modifications under President Obama's foreclosure prevention plan, raising concerns about the effectiveness of the $75 billion effort.

Fewer than 5% of the trial modifications on loans owned or guaranteed by Freddie Mac were converted to long-term adjustments as of Sept. 30, according to the mortgage finance giant.

Looking more broadly, the figures are even lower. As of Sept. 1, only 1.26% of all trial adjustments were made permanent after three months, reported the Congressional Oversight Panel, which monitors the government's use of bailout funds.

The Treasury Department is set to release within coming weeks the first comprehensive look at the number of permanent modifications issued so far.

The preliminary data, which has not been widely reported, underscores the next big problem facing the government's effort: Officials have leaned on banks to offer more homeowners trial modifications, but the real test will be whether homeowners will receive lasting help.

"No one is really sure why the conversion rate is so low," said Mike Zoller, assistant economist at Moody's Economy.com. "We're concerned these loans will eventually become foreclosures."

Under the president's plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork. If they qualify for a long-term modification, borrowers can keep making the lower payments for five years, after which time the interest rate is set at the rate at the time of the adjustment, or about 5% today.

The number of permanent modifications reported is expected to be small, industry observers said. Servicers say they are having trouble getting the necessary documents from borrowers, while homeowners maintain that their servicers are repeatedly losing the paperwork.

And, the question remains, how many people will meet the criteria necessary to adjust their loans for the long-term?

Once homeowners send in their paperwork, servicers may find these borrowers don't have enough income or have too much equity or savings to qualify. Or it may just be more profitable for the bank to foreclose on the home than modify the mortgage.

While the foreclosure rate has eased a bit recently thanks in part to the growing number of people in trial modifications, some experts fear foreclosures will start rising again unless more people receive permanent assistance.

"Everyone is going to be shocked at the low conversion rates from trial modifications to permanent modifications," said Guy Cecela, publisher of Inside Mortgage Finance, a trade publication. The president's program "won't result in a significant number of loans being modified and won't put a significant dent in foreclosure rates."

To be sure, the program is still in a relatively early stage, and the number of trial modifications did not really start ramping up until the fall. Also, in recent weeks, the administration and servicers have taken steps to increase the conversion rate by lessening the documentation requirements and even hiring firms to go door-to-door to assist borrowers with collecting the paperwork.

"We continue to identify new ways to refine the program and increase the likelihood that trial modifications will become permanent ones," a Treasury spokeswoman said.

Announced in February and launched in April, the foreclosure prevention program seeks to help as many as 4 million troubled homeowners by putting them mortgages where the monthly payments are no more than 31% of the borrowers' pre-tax income.

Though the initiative got off to a slow start, some 650,000 people have been placed in trial modifications, which were originally intended to last three months but recently lengthened to five. To get into the trial period, homeowners only need to meet some basic criteria, including owing less than $729,750 on their mortgage and having monthly payments above 31% of their pre-tax income.

CNNMoney.com

About We Save Homes, Inc

2009-11-20T10:46:00.000-08:00

We Save Homes, Inc., a software company that provides technology that empowers homeowners to work directly with their lenders/servicers in resolving mortgage related issues, has partnered with a major online lending exchange. The partnership is designed to help distressed homeowners that have been recently declined for a new refinance examine other financial options using We Save Homes’ proprietary eTurboMod™ software.

The initial campaign involves a combination of both e-mailing as well as making outbound phone calls to homeowners who were recently unsuccessful in refinancing their homes. The ultimate goal is to help educate borrowers and provide them with alternative solutions such as a loan modification or short sale.

Ryan Boyajian, President of We Save Homes, Inc., said, “We believe that most homeowners who can’t refinance due to tightened lending requirements could be great candidates for a loan modification. Our software, eTurboMod™, has revolutionized the industry as it walks you through the entire loan modification process, virtually eliminating the need to pay a third-party expert thousands of dollars. You can do it yourself, just like you can use various programs to file your own taxes-easily, inexpensively and electronically.”

About We Save Homes, Inc.

We Save Homes, Inc., is a software company that has developed the eTurboMod software package. eTurboMod is a menu-driven, highly intuitive program designed to assist homeowners with troubled mortgages to submit electronically the necessary documentation to their lenders and servicers to resolve the outstanding issues. These results could take the form of a refinancing, a change in the terms of the existing loan, or a short sale. For further information, please visit www.wesavehomes.com.