Ever wonder just h
ow much house you could afford? Just as we face everyday changes in our personal lives, so does our financial information changes. Chances are your financial information has changed since you purchased the house you live in now. Maybe your house has increased in market value which could lead to a larger down payment. You may have had a change in income, savings, bonus, or other factor that would affect how much house you can afford.
ow much house you could afford? Just as we face everyday changes in our personal lives, so does our financial information changes. Chances are your financial information has changed since you purchased the house you live in now. Maybe your house has increased in market value which could lead to a larger down payment. You may have had a change in income, savings, bonus, or other factor that would affect how much house you can afford.Although this links to a web site, you are NOT required to enter any personal information. Nothing is stored, shared, or recorded when using this calculator. You enter in monthly income and expenses and it not only tells you how much house you can afford, it will also give you your maximum house payment figure. Click here to give it a try.
Bank of America (BAC: 15.89 +2.98%) is starting to forgive principal when modifying underwater mortgages eligible for the National Homeownership Retention Program (NHRP).
BofA servicers will forgive principal for homeowners who owe "considerably more" on their mortgage than the current value of the home while being considered for the Home Affordable Modification Program (HAMP). BofA announced NHRP in March 2010.
The bank will attempt a principal reduction as the first step in the servicer waterfall to reach the 31% debt-to-income ratio target – the amount of the borrower monthly income that goes toward the mortgage. Loans eligible for the NHRP include subprime, pay-option adjustable rate mortgages (ARM) and prime-quality two-year hybrid ARMs originated by Countrywide before Jan. 1, 2009. The amount of principal owed must exceed the property value by 20%, and the loan must be delinquent by 60 or more days.
Through the five-year NHRP, BofA sets up an interest-free forbearance account for the amount of principal owed above the current value of the home. For instance, if the borrower owes $250,000 on a home worth $200,000 and qualifies for the program, BofA will set up a separate account of $50,000 that will sit alone without collecting interest while the borrower makes payments on the $200,000 at the current market interest rate. There are no required payments on the $50,000 non-interest bearing mortgage account.
For the first three years of the NHRP, BofA reduces the separate account – the $50,000 in the example above – by 20% each year if the borrower remains current. Meaning after three years, $30,000 would be forgiven in the example. If, by then, house prices have gone up and the borrower is once again at a 100% loan-to-value ratio, BofA will no longer reduce the principal. If the borrower remains above 100% LTV, BofA will continue reducing payments for an additional two years.
BofA will not reduce the principal on the non-interest bearing mortgage account if the sum of both mortgages achieves 100% LTV.
"We believe the loss [through NHRP] will be smaller compared to foreclosure," said Jack Schakett, credit loss mitigation executive for BofA Home Loans.
The Treasury Department announced a similar earned principal forgiveness program for HAMP that will go into effect later in the year. But it ends after three years, opposed to the five-year possibility offered by BofA. Schakett said about 80% of the borrowers in the NHRP will not need to receive principal forgiveness after three years.
Schakett added that of the BofA borrowers currently moving through the HAMP process, 45% had an LTV of more than 120%.
“Our tests have shown that many homeowners who are severely underwater on their mortgages will respond positively to a modification offer that includes reduction of their principal balance, increasing the rates of acceptance of HAMP trial modification offers, conversion to permanent modifications and long-term success of the homeowner,” Schakett said.
Schakett said the amount of borrowers who have strategically defaulted is more than they've ever experienced before. To meet the demand for modifications, BofA more than doubled its staff in the loss-mitigation department to reach out to these borrowers. The bank also opened the first of three "outreach" centers in Nevada, joining similar centers in California and Florida.
BofA pushed its total number of permanent modifications under HAMP to 56,400 in April, up from 32,900 in March, for a total of more than 600,000 modifications through all available programs since January 2008.
BofA Begins Principal Reduction on Delinquent, Underwater Mortgages
Wednesday, June 2nd, 2010, 10:46 am
Bank of America (BAC: 15.89 +2.98%) is starting to forgive principal when modifying underwater mortgages eligible for the National Homeownership Retention Program (NHRP).
BofA servicers will forgive principal for homeowners who owe "considerably more" on their mortgage than the current value of the home while being considered for the Home Affordable Modification Program (HAMP). BofA announced NHRP in March 2010.
The bank will attempt a principal reduction as the first step in the servicer waterfall to reach the 31% debt-to-income ratio target – the amount of the borrower monthly income that goes toward the mortgage. Loans eligible for the NHRP include subprime, pay-option adjustable rate mortgages (ARM) and prime-quality two-year hybrid ARMs originated by Countrywide before Jan. 1, 2009. The amount of principal owed must exceed the property value by 20%, and the loan must be delinquent by 60 or more days.
Through the five-year NHRP, BofA sets up an interest-free forbearance account for the amount of principal owed above the current value of the home. For instance, if the borrower owes $250,000 on a home worth $200,000 and qualifies for the program, BofA will set up a separate account of $50,000 that will sit alone without collecting interest while the borrower makes payments on the $200,000 at the current market interest rate. There are no required payments on the $50,000 non-interest bearing mortgage account.
For the first three years of the NHRP, BofA reduces the separate account – the $50,000 in the example above – by 20% each year if the borrower remains current. Meaning after three years, $30,000 would be forgiven in the example. If, by then, house prices have gone up and the borrower is once again at a 100% loan-to-value ratio, BofA will no longer reduce the principal. If the borrower remains above 100% LTV, BofA will continue reducing payments for an additional two years.
BofA will not reduce the principal on the non-interest bearing mortgage account if the sum of both mortgages achieves 100% LTV.
"We believe the loss [through NHRP] will be smaller compared to foreclosure," said Jack Schakett, credit loss mitigation executive for BofA Home Loans.
The Treasury Department announced a similar earned principal forgiveness program for HAMP that will go into effect later in the year. But it ends after three years, opposed to the five-year possibility offered by BofA. Schakett said about 80% of the borrowers in the NHRP will not need to receive principal forgiveness after three years.
Schakett added that of the BofA borrowers currently moving through the HAMP process, 45% had an LTV of more than 120%.
“Our tests have shown that many homeowners who are severely underwater on their mortgages will respond positively to a modification offer that includes reduction of their principal balance, increasing the rates of acceptance of HAMP trial modification offers, conversion to permanent modifications and long-term success of the homeowner,” Schakett said.
Schakett said the amount of borrowers who have strategically defaulted is more than they've ever experienced before. To meet the demand for modifications, BofA more than doubled its staff in the loss-mitigation department to reach out to these borrowers. The bank also opened the first of three "outreach" centers in Nevada, joining similar centers in California and Florida.
BofA pushed its total number of permanent modifications under HAMP to 56,400 in April, up from 32,900 in March, for a total of more than 600,000 modifications through all available programs since January 2008.
First Drop in California Foreclosures in 2010: ForeclosureRadar
Foreclosure filings in California dropped in April for the first time since the beginning of the year, according to ForeclosureRadar, which tracks the filings.
Notices of default dropped 16% from March, after rising 3.75% from February. Default notices also increased 41% from last year, reaching 27,832 in April. The notices of trustee sale declined 10% from March to 30,578 in April. The amount of properties heading back to the bank as REO dropped 5.5% from March but stayed 19% above levels seen last year.
But the inventory of properties in pre-foreclosure or scheduled for sale did not drop as much. Pre-foreclosure inventory includes properties that have received a notice of default but have not been scheduled for sale. Pre-foreclosures dropped 3.17% from March, while the properties scheduled for sale dropped 2.7%.
Foreclosure cancellations, however, continue to increase after passing REO levels in December 2009. Cancellations increased another 11% in April, a sign that foreclosure alternative programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives (HAFA) program could be making a dent in California.
“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” said Sean O’Toole, founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the notice of trustee sale to be re-filed. In fact, 14.6 percent of new notice of trustee filings in April were on previously canceled foreclosures.”
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