Solving the Knoxville Foreclosure Crisis
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Rick Smenner

RE/MAX Preferred Properties
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Knoxville Loan Modifications Category

Knoxville Loan Mod Vs. Forbearance Agreement – What’s The Difference?

Knoxville Home Saver Ask The ExpertFor Knoxville homeowners facing foreclosure, there are generally a few options to avoid foreclosure, including a short sale, loan modification, deed-in-lieu of foreclosure, and a forbearance agreement. Loan modifications and forbearance agreements are the two that commonly get confused, so here is a brief explanation of the difference between the two. In the case of a loan modification, it is simply the term of the loan that change. For instance, if a homeowner has an adjustable rate mortgage that started at a low rate and increased to a high rate which makes it difficult for the homeowner to make payments, the modification would lower the rate making payment possible. Unfortunately, with loan modification, they can be difficult to qualify for and it can be difficult to get approved with the lender. Also, loan modification are not always permanent and come with additional fees tacked on to the loan. Read the rest of this entry »

Freddie Mac Allows Knoxville Loan Mods Before July 1 Program Start Date

july_1_new_laws_calendarKnoxville homeowners who are facing foreclosure will now be able to take part in the Freddie Mac's streamlined loan modification program before the scheduled start date on July 1st. Freddie Mac's streamlined loan modification is expected to make the process easier and help many homeowners avoid foreclosure. Originally, the program was not expected to start until July 1, however, Freddie Mac has announced that eligible Knoxville homeowners can take advantage of the program before it officially starts in July. Eligible be able to modify their loan without documentation if they meet the following requirements: they are at least 90 days late on their mortgage, they are no more the 720 days late on their mortgage, and their mortgage is at least a year old. This  updated loan modification process will work the same as previous loan modifications. In order to make a Knoxville homeowner's monthly payment lower, a servicer will either lower the borrower's interest rate, extend the mortgage terms to 40 years, or provide a principal forbearance. If a Knoxville homeowner is able to make on time payments during a three month trial, the loan modification will become permanent. Read the rest of this entry »

Knoxville Short Sale Questions: Should I Do A Short Sale Or A Loan Mod?

Scratch-head2In our Ask the Expert Section, we recently received a question from Alice, she asks, “I had an expensive surgery two years ago, and since then I've been struggling financially. It has been difficult for me to stay current on my mortgage and keep paying my medical bills. I also had to switch jobs because I couldn't keep up with working 50 hour weeks due to my health, so I'm not making as much money. I love my home and don't want to lose it. I'm not sure what to do at this point, should I try a loan mod or a short sale?" Alice, I'm very sorry to hear about your situation. As far as what option is best for you, that is ultimately up to you and what is best for your situation. You have a few options to avoid foreclosure on your Knoxville home, they included a loan modification, short sale, or deed-in-lieu of foreclosure. If you're wanting to stay in your home, you may want to look into pursuing a loan modification. A loan modification will help you modify the terms of your loan so that you are able to make your payments. In the past, loan modifications have been very difficult to get approved. However, Fannie Mae and Freddie Mac just announced a new streamlined process starting July 1st. The process is supposed to be significantly easier than it has been in the past, however, there is no truly saying how it will be until the program is truly up and rolling. A loan modification would be a good option if you've gotten your debt under control and have a steady income to make making your payments possible. In addition, if you're so underwater on your home that a loan mod is only a temporary solution, you may want to consider a short sale or deed-in-lieu on your Knoxville home. Read the rest of this entry »

Knoxville Loan Modifications – FHFA Announce New Streamlined Process

imagesFor many Knoxville homeowner facing foreclosure on their Knoxville home, a loan modification is often the first thing homeowners try. Unfortunately, in the past, Knoxville loan modifications have been plagued with issues. Hopefully, that is all about to change. At the end of March, the Federal Housing Finance Agency (FHFA), announced an new streamlined loan modification program for all loans owned by Fannie Mae and Freddie Mac. The new streamlined loan modification program was started to help the process be easier for borrowers who are behind on their mortgage payments and to prevent foreclosures from happening. The program goes into effect on July 1, 2013 and ends on August 1, 2015. At that time, all loan servicers will be required to offer a loan modifications to all borrowers who are 90 days or more behind on their payments. The new modification process will allow less documentation than in the past, borrowers will no longer have to show financial or hardship documentations in order to be approved. Read the rest of this entry »

Knoxville Loan Modifications Myths: What Do You Need To Know?

loan-modificationFor Knoxville homeowners who are having trouble making their monthly mortgage payments, a loan modification is a possible alternative to avoid foreclosure. A loan modification changes the terms of your loan to help make your monthly mortgage payment less of a burden by changing the interest rate, the duration of  your loan, among other things. If you are having trouble making your monthly mortgage payment on you Knoxville home, here are a few  facts that you should know. Knoxville Loan Modification Myth #1: A Knoxville loan modification is the best way to avoid foreclosure. The Truth: Knoxville loan modifications are a way to avoid foreclosure, however, they can be hard to complete and there is no guarantee they will work.  Unfortunately, loan modifications can just be a temporary fix. they often carry a higher balance than the original loan. So even though the monthly payment may go down for sometime, you still owe more on their home than it is worth. And, eventually, your monthly payment increases, and you are in a worse place than before. Not to mention lenders can add all kinds of fees into your principle balance and increase your monthly payment without any notice. Read the rest of this entry »

Knoxville Loan Modifications: Which Is The Most Effective Type?

knoxvilleloanmodificationFor Knoxville homeowners who are behind on their mortgage payments or Knoxville homeowners who owe more on their home than it is worth, loan modification is a common alternative to avoid foreclosure. If you are one of the many Knoxville homeowners trying to modify your loan, do you know what type of loan modification is the most effective? Amherst Securities Group recently released a report outlining what type of loan modification is most effective in helping distressed homeowners avoid foreclosure. Here is a breakdown of the report released by Amherst:
  • There are three types of loan modification. A principal reduction reduces the amount that is owed on the home. A rate reduction reduces the interest rate. A capitalization reduction takes what is past due on the loan [including late charges] and adds it to the principal amount.
  • Of the three types of modifications, the most effective type of loan modification is principal reduction, which had the lowest 12 month re-default rate.
  • Principal reductions now account for 40% of all modifications, which is up from 25% in 2011 and 11% in 2010. Read the rest of this entry »

Knoxville Loan Modifications: Why They Don’t Always Work

KnoxvilleLoanModificationAreStressfulKnoxville loan modifications is one of the many alternatives distressed homeowners have to avoid foreclosure. Oftentimes, when a Knoxville homeowner is having difficulty making mortgage payments, loan modifications are one of the first things they try. Still, the Knoxville loan modification can be a long process, filled with countless calls to the lender, and oftentimes, loan modifications  don't end up working. So, why is it that most loan modifications fail? One big reason loan modifications don't work is that the entire process is a convoluted, bureaucratic mess. The lender you pay your mortgage to more than likely doesn't own the loan. More than likely, that lender services the loan for an investor. It is the investor who either approves or doesn't approve the loan modification. The lender, who you are making all the calls to and spending countless hours on the phone with, is just the middleman, for you and the investor. The investor that owns your loan is most likely a government entity, like Fannie Mae or Freddie Mac. Each investor has different requirements for them to approve the loan modification, which they then communicate to your lender which then communicates it to you.  It is because of this complicated process, with too many parties involved,  that loan modifications take so long to complete, if they get completed at all. Read the rest of this entry »

Will The “Robo-Signing” Settlement Help Distressed Knoxville Homeowners?

Will The Robo-Signing Settlement Help Distressed Knoxville HomeownersKnoxville, Tennessee -- Last week, federal and state government officials reached a $25 billion settlement with 5 major banks that were guilty of "robo-signing" foreclosure documents. The "robo-signing" scandal came to light in the Fall of 2010 ,when it was discovered that Bank of America, Ally Financial, Wells Fargo, JPMorgan Chase, and Citigroup employees were mass signing foreclosure documents without the proper protocol. During the time, there were roughly 8,000 to 10,000 foreclosure notices per month that were signed fraudulently or without being reviewed. So finally, after a year of negotiating, a $25 billion settlement has been reached. This settlement is the largest multi-state settlement since the Tobacco Settlement in 1998. So, what exactly does this mean for distressed homeowners in Knoxville? How will it influence Knoxville loan modifications? Read on below to see how this will influence distressed homeowners in Knoxville. Read the rest of this entry »

Knoxville Short Sale Hardship Letter The Basics

Knoxville Short Sale Hardship LetterWhen I interview sellers who want to short sale in Knoxville, I ask them to describe their hardship. Agents who do a lot of short sales can sometimes become a little insensitive because we are focused on the statistics. For instance, when a seller says she is getting divorced, it's possible that I may not show a lot of emotion. Then I realize how that comes across, which is not at all in the way I intended it. Trying to do a short sale or loan mod because of relationship difficulties is acceptable to most bank guidelines. It's not good news that the you and your spouse are splitting up. But, it is important for your lender to know. In your hardship letter, you want to explain 3 things: Read the rest of this entry »

How Can a Knoxville Realtor Help Me When I’m Facing Foreclosure?

While most people think of realtors as a person you turn to only when you’re buying or selling a home; many don’t realize that a realtor’s expertise in the housing industryStop Knoxville Foreclosures can help you in other ways also. If you are facing possible foreclosure, turning to a realtor for help may be one of the smartest options to choose. While realtors can’t give legal advice about handling foreclosures, they can show you many options that are available to you as both a home owner facing possible foreclosure and as a possible home buyer if you should have to release your home to the lender. 1.) The right Knoxville realtor will know the area well and be able to guide you as to how others in your situation in the same area have handled similar circumstances. Read the rest of this entry »

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