Sub Prime Loan Modification

Sub Prime Loan Modification

Free Online Articles Directory

Why Submit Articles?
Top Authors
Top Articles
FAQ
AB Answers

Publish Article

0 && $.browser.msie ) {
var ie_version = parseInt($.browser.version);
if(ie_version Hello Guest
Login

Email

Password

Remember me?
Lost Password?

Home Page > Finance > Mortgage > Sub Prime Loan Modification

Sub Prime Loan Modification

Edit Article |

Posted: Feb 04, 2009 |Comments: 2
| Views: 200 |

]]>

Sub-prime lending is a type of credit given to homeowners who do not meet the criteria for regular (“prime”) loans. A typical sub-prime borrower has a poor or limited credit history and a FICO score of less than 620. These factors make them a risky investment for regular lenders, which keeps them from taking out loans. To compensate for the risk, sub-prime lenders impose higher costs on their contracts. For credit cards, this is usually a higher fee for over-the-limit spending or late fees. Sub-prime mortgages usually have higher interest rates and stricter terms.

Contrary to popular belief, sub-prime lending is a perfectly legal business. But like many new industries, it has been tainted by lenders who don’t play by industry standards. From 2003 to 2007, shady companies have turned up offering terms ranging from unfair to downright illegal. This, along with the economic slowdown, has contributed a great deal to the real estate crisis that forced many homeowners into foreclosure.

Are all sub-prime loans bad?

No. There are actually some sub-prime companies who give you good value for your money. If you find a good lender and stay current, sub-prime lending can have its benefits.For example, many people use sub-prime loans as a means of credit repair. Basically, it gives you a chance to rebuild your credit history and improve your scores. By keeping up a good record on sub-prime loans, you can eventually refinance to better terms and get back on your feet.

How do I know when a loan is sub-prime?

The first thing you should look at is the cost of the loan. Sub-prime loans have a higher overall cost (including interest, origination and closing fees) compared to prime loans. Although the basic formula is the same for both types, the pricing for sub-prime loans is more noticeably risk-based. A low credit score, small down payment, and other negative factors can greatly increase the cost of a sub-prime loan.

Another common feature is the prepayment penalty. Prepayment is when you pay more than the minimum monthly amount, or pay off the loan ahead of schedule. The penalty is to make up for lost interest on the lender’s part. Because you’re getting off early, the lender stops earning regular interest—and naturally, they charge you for it.

Many sub-prime mortgages follow the 2/28 structure. This means that you pay a fixed interest rate for the first two years, after which the loan switches to an adjustable rate where your payments are determined by market indicators. Often, the introductory rate is higher than the current index and the margin is applied once the loan shifts. For example, a lender can give you an intro rate of 8% while the index is currently at 4%, with a margin set at 6%. Assuming the index stays the same; your rate can jump to 10% when your two years is over.

What can I do if I’m in a sub-prime loan?

Fortunately, there are laws in place to protect borrowers in any loan, prime or sub-prime. For instance, the Real Estate Settlement Procedures Act (RESPA) requires all lenders to give you a good faith estimate of the total cost of the loan before closing any deals. This prevents any third party, such as mortgage brokers, from making any kickbacks at your expense.

All mortgages are also covered by the Truth in Lending Act (TILA). This law gives you the right to know the full lending terms and loan costs in any credit transaction, including credit cards. The TILA allows you to opt out of a transaction within a reasonable time if you don’t agree with some of the terms.

If a sub-prime mortgage has put you in financial difficulty, another thing you can do is apply for Loan Modification or in this case Sub Prime Loan Modification refers to an agreement between you and your lender to change the terms of your loan on account of your financial situation. This way you can modify your loan terms to a more affordable level. The Sub Prime Mortgage Loan Modification is a lengthy and time consuming process. However a competent loan modification attorney can expertly handle your case and expedite the loan modification process. A loan modification attorney will expertly present your case and use the above mentioned lending laws as leverage to get you more reasonable rates. If you’re already in foreclosure, this will also stop the process while you work out better terms with your lender.

Retrieved from “http://www.articlesbase.com/mortgage-articles/sub-prime-loan-modification-755602.html”

(ArticlesBase SC #755602)

Liked this article? Click here to publish it on your website or blog, it’s free and easy!

Loan Modification Attorney -
About the Author:

The Loan Modification Department is composed of a team of attorneys, mortgage and real estate professionals, and hardship analysts. Lead by Expert Loan Modification Attorney, Marc R. Tow, Loan Modification Department has helped thousands of American Home Owners save their Homes and decrease their loan payments. For more information just Call 800-738-1170 or Visit our website http://www.cdloanmod.com/

]]>

Questions and Answers

Ask our experts your Mortgage related questions here…200 Characters left

We received a loan modification from chase. They added 18 months of past due payments plus fees to our loan. This came to over ,000. Is there anyway to get this forgiven in bankruptsy court?
Is this right time to invest in real estate market, sub prime crisis now repeating in noida market
If i am employed and my husband is not . there is any possibility to get a loan modification? we are 3 months behind our mortgage

Rate this Article

1
2
3
4
5

vote(s)
0 vote(s)

Feedback
RSS
Print
Email
Re-Publish

Source: http://www.articlesbase.com/mortgage-articles/sub-prime-loan-modification-755602.html

Article Tags:
sub prime loan, sub prime loan modification, loan modification, mortgage loan modification, mortgage modification

If Mortgage Rates Can Fall Through the “floor” of the Prime Rate…what Else is Under the Floor?

If Mortgage Rates Can Fall Through the “floor” of the Prime Rate…what Else is Under the Floor?

“Lower than prime,” you heard someone say. Like most Canadians, you were probably first skeptical and then confused. We tend to think of the prime lending rate as the invisible “floor” of lending rates. The very best customers can get very close to that floor. It is theoretically possible, we reason, to actually be ON the floor, but not possible to be below it.

Nevertheless, Canadian lenders offer mortgages at prime minus 0.5% to even minus 0.7%. So the floor isn’t the lowest you can go. There’s something under the “floor”. The rate known as “prime” has been the popular benchmark for lending in Canada. When business reporters talk about interest rate movement, they usually talk about what’s happening with prime. But there are other benchmarks in money rates, though they are typically for use by professional money managers. The most significant of these is the Banker’s Acceptance rate.

While “prime” is a set rate which is offered to a lender’s best customers, the Banker’s Acceptance is the rate which financial institutions use to lend money to one another. And it’s typically well below the prime rate. Look for the “Money Rates”section of your favourite newspaper, and you can compare Prime with the Banker’s

Acceptance rates for yourself. “Interesting,” you think, “but why does it matter?” Well, as new lending institutions begin to offer a slate of innovative new loan options, a new mortgage has emerged that is based on the Banker’s Acceptance rate: offering a mortgage rate of 1% over the 3-month Banker’s Acceptance.

If you compared the rock-bottom prime-based variable mortgage rate – prime less 0.5% to 0.7% – with the new adjustable BA-based rate, you would find that the BA-based rate would have delivered significant savings over the past several years, as rates were dropping. There are two reasons for this. Firstly, the BA-based rates have historically been considerably lower than prime. Secondly, the prime rate tends to be “stickier” in an environment where rates are falling. Often, the more fluid, market-based BA rates deliver the rate change more quickly.

Any variable- or adjustable-rate Ontario mortgage is an excellent option when interest rates are either dropping or stable. Not surprisingly, they’ve been a very popular choice in the past few years. There are some rumblings now that rates may begin to increase, but flexible-rate mortgages still remain an excellent choice for those looking to save some interest.

As always, you should consult with a mortgage professional to find the mortgage that suits your personal financial needs. An independent mortgage broker can provide you with information on a broad range of mortgage options from a wide variety of lending institutions, so you can compare features and options at a glance.

And remember, it’s worth taking some time to look beyond prime and explore what’s “under the floor” in mortgage options!

The House Team is commited to providing quality information to help people make informed decisions about their mortgage financing needs.

Compare Ontario Mortgage Rates with the traditional banks.

Need a mortgage calculator? Click Here Mortgage Calculator Ontario

Mortgage Rates Ontario

Mortgage Marketing after the Sub Prime Shake UP

www.redclaymedia.com http This is the first in an exciting series of podcasts, featuring Red Clay Media CEO, Brian Rice. It is particularly timely, in light of the economic recession and recent shake-up in the mortgage industry. At a time when many are retreating and going out of business, mortgage banks and brokers of all sizes are left to wonder – “how do I stay in business?”, “what should I do now?” This podcast, and the ones that will follow over the coming months, shed some light on the current situation, and give practical advice on how to survive, and perhaps even thrive, during such times.

Posted by Editor on Sunday, February 21, 2010 at 3:10 pm
Filed under Tools · Tagged with After, Marketing, mortgage, Prime, Shake

Mortgage Lead Companies With Sub Prime Mortgage Leads

If you are a loan officer or mortgage broker on the market for sub prime mortgage leads be sure to take your time and choose your mortgage lead company wisely.

One of the most important things you will want to know about the mortgage lead company is how they acquire their mortgage leads.

Why is this important?

The importance of the mortgage leads origin all depends on the type of mortgage lead you are looking for,

If you are looking for inexpensive sub prime mortgage leads that are inexpensive and can be bought in bulk than the history of the lead becomes unimportant because the mortgage lead would not be inexpensive unless it was dated and had been sold multiple times to loan officers and other mortgage lead companies.

The idea behind buying cheap mortgage leads in bulk is to try and get three to five applications per every hundred mortgage leads called.

If you are looking for fresh sub prime mortgage leads of good quality, than where the mortgage lead company acquires their mortgage leads from should be of much importance to you.

Look for the mortgage lead companies that acquire their mortgage leads through web sites that they own and operate. This is one way you can be sure that the mortgage lead you are paying for is legitimate and not purchased from a third-party vendor who has already sold it multiple times.

Also, you will want to be sure that the mortgage lead company is using actual mortgage lead generation sites to acquire their sub prime mortgage leads and not using spam tactics to have people fill out surveys than sell them as mortgage leads.

Another thing you will want to be sure the mortgage lead company is not doing is acquiring mortgage leads by offering free gift cards to home stores to people that fill out the on line applications.

With this type of mortgage lead you will undoubtedly end up with a customer that is more interested in the gift card than they are an actual mortgage.

So when deciding on a mortgage lead company to invest your hard earned money with to purchase good quality sub prime mortgage leads, be sure to pick up the phone and speak with someone in the customer service department of the mortgage lead company and find out exactly how they acquire their mortgage leads.

Jay Conners has more than fifteen years of experience in the banking and Mortgage Industry. He is the owner of http://www.jconners.com, a mortgage marketing and resource site, he is also the owner of http://www.callprospect.com, a mortgage lead company, specializing in real time mortgage leads.

Posted by Editor on Saturday, January 16, 2010 at 3:06 pm
Filed under Leads · Tagged with Companies, Lead, Leads, mortgage, Prime

Sub Prime Loan Modification

If Mortgage Rates Can Fall Through the “floor” of the Prime Rate…what Else is Under the Floor?

Mortgage Marketing after the Sub Prime Shake UP

Mortgage Lead Companies With Sub Prime Mortgage Leads

Recent Posts

Categories

Archives

Marketing Resources