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Are you stuck in an adjustable rate mortgage you can't afford?
Consider forbearance or a loan modification current mortgage loan could be the solution for keeping your home.
Clayton Fixed Income Services, Inc. reports that the percentage of subprime borrowers 60 or more days in arrears at the end of last month surged for both the 2006 and 2007 vintages, up nearly 7 and 11 percent compared to June, respectively. Alt-A delinquencies continued to worsen in July as well. The 2005 vintage - which should be seasoned by now - saw delinquencies jump an eye-opening 29 percent to 9.72 percent of remaining loans in the vintage; the increase is somewhat telling as well, given that prepayment rates actually fell by more than 5 percent in the same timeframe.
Will Loan Modifications Kill the Mortgage Refinance Market?
Why should someone pay refinance closing costs if they can do a loan modification to lower their interest rates with no cost? For one reason, refinancing is clearly better for your credit. Typically, loan modification happens in the later stages after 60- or 90-day late payment and the borrower is facing foreclosure. Refinancing before you get in trouble is the best idea. This day refinancing your home loan typically requires good credit unless you qualify for the FHASecure program except if you haven't yet fallen behind on your mortgage payments.
The U.S. Department of Housing and Urban Development (HUD) defines a loan modification as a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford. Contact HUD or FHA Home Loan Refinancing for update information regarding government lending options.
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