Principal Reduction Program Options
One way to solve this problem and stop foreclosure is through a mortgage loan modification progam. Under one loan modification program, homeowners are now given the option of principal reduction. Under this program, the mortgage balance is adjusted to match the present market value of a property.
Principal reduction is not available for everyone, though. There are certain requirements that have to be met before a borrower can qualify for the program. Some requirements are and some others will be discussed further in this posting:
- The mortgaged property is the principal residence. The program prioritizes borrowers who need to stop foreclosure because they actually live in the property and does not only use the property as investment.
- The borrower is delinquent on payments by a minimum of 60 days.
- The monthly income of the borrower qualifies under particular approval guidelines.
- For borrowers who are not presently delinquent but wish to stop foreclosure just as well, they can likewise qualify if they show inability to pay mortgage because of a trigger event like loss of employment or earnings. However, they must be able to prove that under the lower rates, they can regularly make payments. Also, necessary documents that will prove the aforementioned conditions have to be submitted.Though not all homeowners can apply for the principal foreclosure reduction program, it will definitely provide assistance for those who are qualified. It is a big step for those who wish to stop foreclosure. Some of the banks which are planning on offering the program are Bank of America, Countrywide, and Citigroup.For those who want to know more about the program, they can Contact Lighthouse Properties and here are other requirements and conditions.
- NPR (Note Purchase Rewrite):
- Not a Modification! This is a total loan rewrite, full doc loan
- No government owned notes- No FNMA, FREDDIE or FHA (HUD)
- DTI + HOA’s = 40% front end only
- The interest on the new note is 5.5% + prime, currently 8.75%
- No prepayment penalties on new loan!!! (Repair your credit and refi anytime)
- Fees are $1850 ($995 until May 15th) for the first and $595 for the second
- Homeowner has to be able to pay off any liens attached to the property before COE, ex HOA and property taxes
- Has to be 60 days or more late
- Minimum negative 20% equity
- Credit is not a factor (we can even help you fix your credit)
- Doesn’t interfere with current loan medication or short sale process
The fees associated are $1850 ($995 until May 1) and $595 per each additional lender for processing. The fees cover appraisal, attorney fees, CPA fees and title research fees. Fees are refundable until the file is submitted or if the file does not qualify.
NPSS (Note Purchase Short Sale)
- The same terms of the NPR apply and this is the alternative to not being able to qualify for the new loan or can’t pay off liens. (Exceptions may apply)
- Cash for keys is available
- With an NPSS there is no deficiency and no 1099
- NPSS is an ‘approved short sale’ so there is no waiting period for sales price approval
Give us a call and I can help you determine the right solution for you. There is never a charge for consultation. You can reach me at 951.233.0803 or email me at buysomeproperty@gmail.com for additional information or specific questions.
