HelocBasics » Uncategorized

Must HELOC Lenders Give Approval for the Federal Mortgage Modification Program?

Jamie — Wed, 08 Apr 2009 00:56:30 +0000

Many desperate homeowners are concerned that their HELOC lenders won’t give approval for their participation in the federal Making Home Affordable mortgage modification program.

Good news: you do not need to get approval from your HELOC lender in order to apply or have your mortgage modified.

The Daily Camera explains some of the qualifications necessary:

“Your monthly payment must be above 31 percent of your family gross monthly income. Monthly payment includes your first mortgage payment, homeowners insurance, property tax, and HOA/condo fees. Unlike the refinance plan, the modification plan does not require the acceptance of the HELOC or second mortgage lender…

You need to be suffering a change in circumstances that leaves you unable to make your payment, such as being laid off or having a toxic loan. You must sign an affidavit of financial hardship and verify your income.”

The mortgage modification program won’t change the terms of your HELOC. But, you do not need to seek permission from your second mortgage lender.

New Record in Home Equity Loan Delinquencies

Jamie — Fri, 03 Apr 2009 01:26:50 +0000

According to recent statistics, home equity loan delinquencies have skyrocketed to a record number.

Bloomberg reports:

“Late payments on home-equity loans rose to a record in 2008’s fourth quarter as job losses and the deepening recession put a strain on borrowers, the American Bankers Association reported. Delinquencies increased to 3.03 percent of accounts in the period from 2.63 percent in the third quarter, the Washington- based group said today in a statement.”

The massive number of HELOC delinquencies has caused lenders to tighten requirements for new borrowers and even freeze the lines of current customers. Will a turn-around be reported for the first quarter of the year?

See Also:

HELOC Freeze

HELOC Foreclosure

HELOC Q & A

1 in 6 Americans Upsidedown on Mortgages

Jamie — Wed, 04 Feb 2009 03:23:45 +0000

A recent study shows that 1 in 6 Americans now owe more on their mortgages than their properties are worth.

Zillow reports:

“As home values declined through 2008, more American homeowners have become underwater on their mortgages. At the end of the year, one in six (17.6 percent) of all homeowners had negative equity. This number rose from the end of the third quarter, when one in seven (14.3 percent) homeowners was underwater…

Home values in the United States fell for the eighth consecutive quarter, declining 11.6 percent during 2008 to a Zillow Home Value Index(1) of $192,119, according to the fourth quarter Zillow Real Estate Market Reports(2), which encompass 161 metropolitan areas.”

With numbers like that it’s no wonder that so many lenders are freezing and canceling home equity lines of credit. There simply isn’t enough money in borrowers’ homes to secure all existing second mortgages.

See Also:

Answers to Common HELOC Questions

What to Do if Your HELOC is Frozen