Bad Credit Mortgage Refinance

If you are sick with your finances, scared to deal with your bad credit situation and would like to somehow get out of this and start all over again keeping your credit score perfect, then there is one easy way to go about it. The simplest thing for you to do would be to go for a bad credit mortgage refinance. Now you might wonder who is going to refinance your mortgage when you have only very bad credit records to show. In this article you will find information on why it is possible for you to get refinance and also how you will have to approach lenders to get it done.

Bad credit mortgage refinance is not a big deal these days. Bad credit itself is not something to be ashamed of but simply a financial phase which anyone can overcome as there are any numbers of loans you can have to deal with it. The competition in the lending market is so high that financiers, banks, credit unions etc are coming up with new and new schemes designed to meet any financial problems you may have. There are lenders who have solution for just any financial problems or situation.

The first thing you have got to do to get a refinance for your mortgage would be to analyze your financial situation. Get to know where you stand with your credit records, how bad is it, what is the amount required to keep your credits clean, how much is your debt etc. This way you will have a better understanding of your finances and will let you look for refinancing which will cover all this, and still have amount left to let you get on with life.

Now you will have to do some home work to find lenders perfect for your situation. The best place to start will be to go online and look for lenders who provide bad credit mortgage refinance. Then do some comparison shopping by getting quotes from some of the lenders you would prefer aligning to. Weigh all the pros and cons to know which lender will be most beneficial to you. Remember to consider the interest rate, fees, cost, other charges etc while calculating the final amount.

Best way to go about it would be to look for a bad credit mortgage refinance plan for which the monthly payment would come within your monthly budget. You may use a mortgage calculator to easily get the various possibilities with your refinance plan. This will help to also decide on the term or period to choose for your loan. The longer the period of loan the lower your monthly payment will be but you will end up paying more for your loan than shorter term loans. All these factors considered do not expect to get a bad credit mortgage refinance with as low an interest as for good credit holders. The higher cost on your refinance is what you will have to pay as penalty for letting yourself into a bad credit situation.

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Foreclosure Filings in U.S. Jump 30%, Thwart Prevention Effort

March 12 (Bloomberg) -- Foreclosure filings in the U.S. climbed 30 percent in February from a year earlier as the worsening economy thwarted efforts by the government and lenders to prevent homeowners from losing property,RealtyTrac Inc. said.A total of 290,631 homes received a default or auction notice or were seized by the lender, the Irvine, California-based seller of default data said in a statement today. It was the third-highest monthly total in RealtyTrac records dating to 2005. 

February filings increased 6 percent from January.“More people have lost their incomes or are underwater on their mortgages, so a new housing plan won’t change those facts by itself,” Barry Eichengreen, professor of economics at the University of California, Berkeley, said in an interview.The U.S. housing crisis is deepening as President Barack Obama attempts a $275 billion rescue to help borrowers with sinking home values or unaffordable loans. 

Declining prices sapped $2.4 trillion in value from the nation’s residential market last year, according to First American CoreLogic. Prices in 20 U.S. cities have fallen every month since January 2007, the S&P/Case Shiller index shows.Rising unemployment also is making it harder for homeowners to keep up with payments. 

The U.S. jobless rate rose to 8.1 percent in February, the highest in more than 25 years, according to the Labor Department.Wait and SeeSome of the top U.S. lenders own as many as 700,000 foreclosed homes they have yet to offer for sale, said Rick Sharga, executive vice president for marketing for RealtyTrac.The banks may be waiting to see how U.S. government plans develop before selling the properties, Sharga said. 

The lenders and government-owned Fannie Mae and Freddie Mac, the two biggest U.S. mortgage financing companies, have already extended temporary foreclosure moratoriums.The combined percentage of loans in foreclosure or at least one payment past due in the fourth quarter was 11.18 percent, the highest on record, according to the Mortgage Bankers Association in Washington. 

The percentage of loans 60 days past due and 90 days or more late also were at record levels.“Many elements are lined up to suggest we’ll have more foreclosure activity in the future, maybe an all-time high,” Sharga said.

Obama introduced a plan Feb. 18 to use $75 billion of public funds to entice lenders to modify or refinance home loans, stem foreclosures and rescue delinquent homeowners. The president also said the Treasury Department would provide as much as $200 billion in additional backing for Fannie Mae and Freddie Mac to free up funding for new mortgages.

Re-Financing PlanTo qualify for a refinanced loan, applicants will have to fully document incomewith pay stubs and tax returns, and sign an affidavit attesting to “financial hardship,” according to Treasury.One in 440 U.S. housing units received a foreclosure filing last month, andNevada, Arizona and California had the highest foreclosure rates, RealtyTrac said.

Idaho, Illinois and Oregon joined the list of top 10 states with the highest rates, a sign that rising unemployment is now pushing defaults, Sharga said. Florida, Michigan, Georgia and Ohio were also in the top 10.

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Mortgage Investors Call for Changes in Rescue Plan

Investors who hold billions of dollars of residential mortgage-backed securities are pressing the Obama administration to make changes in its housing rescue plan.

Participation by these investors will help determine the success of President Barack Obama's $75 billion plan to reduce foreclosures and help stabilize the housing market. But many investors are critical of features of the program and have been meeting with Treasury officials in an effort to influence parts of the plan, such as how it treats second mortgages.

Some investors say they are contemplating legal action because they think the administration's plan and legislation before Congress would violate their rights. They are particularly concerned about measures that would prevent lawsuits against mortgage servicers, which collect loan payments for the investors and are responsible for modifying loans with homeowners.

"Investors are given rights through the contracts in the securities, and we expect those rights to be honored," said Jeffrey Gundlach, chief investment officer of TCW Group Inc., which manages roughly $52 billion in residential mortgage-backed securities.

Many of the four million borrowers the administration hopes to help through its loan-modification program have mortgages that were packaged into securities and sold to investors world-wide. Roughly $1.9 trillion of mortgage loans outstanding as of Dec. 31 had been packaged into securities that don't carry government backing, according to Inside Mortgage Finance. Thus far, servicers have been more reluctant to modify those loans than mortgages they own.

Administration officials say they are trying to address the concerns of investors and others as they work out details of the program. The range of investors in mortgage-backed securities includes hedge funds, insurance companies and pension funds.

Some investors say they are willing to work with the administration. Mr. Grundlach says the program would be more palatable to investors if, for instance, modifications weren't given to borrowers who lied when they took out their initial mortgage.

Treasury Department officials say they believe that servicers will be able to modify the vast majority of investor-owned loans based on their current contracts. They also point out that the plan includes financial incentives to encourage investor participation in loan modifications, but doesn't mandate that investor loans are reworked.

Home-equity loans and other second mortgages are an issue because such debt is junior to first mortgages. Some investors and analysts say that mortgage servicers may find it in their own financial interest to modify the first mortgage and not touch the related home-equity loan or line of credit.

Roughly half of delinquent subprime borrowers also have a second mortgage, according to Credit Suisse Group.

Mortgage investors say that rewriting the first mortgage without touching the second violates their rights, because second mortgages are supposed to be repaid second. Modifying the first loan can help the holder of the second mortgage, because it increases the chances the loan will be repaid, they say. But fixing both loans is a better strategy, they add, because it will produce a more affordable payment and reduce the chances that borrowers owe more than their homes are worth.

Investors say the Obama plan results in a conflict of interest, because many loans are serviced by big banks that also hold second mortgages -- and as a result have a financial interest in how these loans are handled.

Government officials say they are working on a plan that would provide incentives for servicers to extinguish these second mortgages.

Investors are also calling on the administration to strengthen the federal government's Hope for Homeowners program. Under it, some delinquent borrowers can refinance and get a more affordable, government-backed loan, provided the investor who currently holds the mortgage agrees to a principal write-down. So far, the program has fallen far short of initial expectations that it would help as many as 400,000 homeowners.

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