Tuesday, March 24, 2009

Loan Modification Program under Pres. Obama

By ATTY. Crispin Lozano

We will discuss the Obama Administration’s Program to make home affordable through Loan Modification.

Question: What is the government’s loan modification program?
Answer: It is a government assistance to loan servicers (banks) and investors to help offset the cost of modifying homeowner’s mortgages into affordable mortgages that will allow them to keep their homes. This may be done by reducing mortgage interest rate, extending the term of the loan, principal reduction or elimination if necessary. The program begins in March 4, 2009 until December 31, 2012.

Question: Who are eligible for this program?
Answer: You may qualify if:
The home is a one to four unit property that is your primary residence and owner occupied.
Your existing mortgage was originated on or before January 1, 2009.
The property may not be investor-owned.
The property may not be vacant or condemned.
You are not able to pay your existing debt without help.
Your total monthly mortgage payments are more than 31 percent of your gross monthly income.
You are at risk of foreclosure due to a significant increase in mortgage payment, a reduction in income since the current loan was created, or a hardship that has increased your expenses. (Ex. Medical bills).
You owe an amount equal to or less than $729,750 on the first mortgage (higher units are allowed for an owner occupied property that is two to four units).
You may be in bankruptcy.

Question: How will the loan modification program be implemented?
Answer: The program will be implemented as follows:
The lender will have to first reduce payments on mortgages to no greater than 38 percent of Debt to Income ratio.
The Treasury will match further reductions in monthly payments dollar-for-dollar with the lender/investor down to a 31 percent Debt to Income ration for the borrower.
Borrowers are eligible to receive a bonus (Pay for Performance Success Payment) of $1000 each year for five years for paying the mortgage that reduced the principal balance and for being current on the monthly payments.
In order to participate in the program, your servicer bank must have entered into the program agreements with the Treasury’s financial agent no later than December 31, 2009.

Question: I can do the loan modification myself or do I need an attorney to help me?
Answer: Many people who tried to do it alone find it hard to communicate with the servicer bank or were denied for lack of qualifications. If you are represented by an attorney the servicer bank will be obliged to communicate because of the possible filing of court case in your behalf. In addition, an attorney can help you analyze your present situation that will help you obtain a loan modification. Our Law Firm handles loan modification cases.

Tip of the Week

President Obama told the Hispanic Caucus on March 20, 2009 that he will work on immigration reform and path to citizenship as he promised in the campaign. There will be public forum on immigration in the next two months.

Last February 2009, we received an approval of an adjustment of status in Immigration Court for a client who entered the U.S. by misrepresenting himself as married to another person not his wife. The Immigration Judge granted the waiver based on long residence in the U.S. and hardship to the two United States citizen children.

We again have successfully obtained a waiver of fraud or misrepresentation in Immigration Court for a green card holder who entered as single but actually married.
Denied adjustment of status and Naturalization applications are now being sent to the Immigration Court.

Income tax filing is required in the proposed legalization. Individual Tax Identification Number (ITIN) can be used for filing tax returns and is required before bank accounts can be opened. Our office assists clients in obtaining ITIN.

Crispin Caday Lozano is an active member of the State Bar of California and he specializes in immigration law. He earned his Juris Doctor at Western State University in Fullerton, California. His offices are located at 17057 Bellflower Blvd. Suite 205, Bellflower, CA 90706 and 1290 B Street, Suite 205, Hayward, California 94541 and at 777 N. First St., Suite 333, San Jose, CA 95112. You can contact him at telephone (562) 461-1355 and (510) 538-7188.

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