If you have already refinanced your current loan at today’s mortgage rates and you are still looking for a way to make your monthly payments even lower, there may be one strategy left that you haven’t tried.

“Recasting” is another term for reamortizing and it gives the mortgage borrower the opportunity to lower their monthly payments if they already have a fixed rate loan. The process involves the borrower paying a small fee rather than applying or a new mortgage loan so they do not have to worry about paying appraisal fees and other costs associated with getting a refinance. In addition, recasting can also help borrowers save on the interest of their loan over the long term because it helps pay down the principal amount of the loan.

Because recasting does not create a large stream of revenue for banks and lenders, you won’t see any advertisements for this option. Refinancing is a better moneymaker for lenders so the only way you will find out more about recasting is if you ask your lender about it. However, not all loans qualify for recasting so be prepared for that as well.

Recasting is so unpopular for banks and the numbers can attest to that. For instance, Chase only has about 200 recasts per month out of about 10 million mortgage loans. For Bank of America’s 14 million home loans, only about 200 to 300 of those get recasted.

If you are considering this option, here is a basic rundown of how it works. First, ask your loan officer if you can put a large amount of money towards the principal balance on your mortgage. If the lender agrees, you can recast your loan so you pay a smaller monthly payment for the remainder of the loan. It doesn’t shorten your loan terms, but it does make it easier to make the monthly payments.

Recasting is typically a good choice for homeowners who have come into a large sum of money either through a bonus at work, a modest inheritance or some other occurrence. Normally, refinancing would be a good option but not every homeowner will qualify for a refinance or their credit score would cause them to get a higher interest rate than they are paying now. If this is the case, you can put that lump sum toward the principal balance to reduce that. This also reduces the overall interest that you will pay so your monthly payments can be lower.

If this sounds like a viable option for you, check with your loan servicer to see if you qualify. As always, weigh all of your options and crunch the numbers before making your final decision.

With so many homeowners across the country in danger of losing their home through foreclosure, Bank of America has found a heart and decided to put a freeze on evictions for the time being in many areas of the nation.

Of course, as with any major decision like this, it’s not all about what is better for the consumer. The bank has said that it was concerned that some of the paperwork was not handled properly in many foreclosures so now evictions for those who are affected by the paperwork in 23 states have been halted for the time being. The reason the freeze is only taking place in 23 states is because those are the states where a court order is needed in order to foreclose on a home. However, lenders are feeling the pressure of putting evictions and foreclosures on hold for all 50 states as unemployment continues to be a major problem.

But BofA isn’t the only mortgage lender that has put a moratorium on evictions recently. Ally Financial Inc. in Detroit has decided to freeze evictions in 23 states, but that was also because of paperwork what may not have been handled correctly. The head of that financial institution’s document processing team stated that he signed numerous affidavits stating that the paperwork for foreclosures was done correctly, but he also said he didn’t read the documents beforehand. Chase has also halted foreclosure proceedings due to similar circumstances.

As for Bank of America, the foreclosure process is simply being delayed right now until the affidavits for foreclosure cases have been amended. This will only be good for those that have not already gone to judgment in those 23 states where the freeze is being done. BofA has not mentioned how many borrowers will be affected by the freeze, but those who are affected will surely enjoy their reprieve.

Jerry Brown, the Attorney General in California, wants to be sure the banks are going by the letter of the law in his state when they foreclose on a property. He would also like to require lenders to help homeowners understand their options regarding loan modifications and other ways to help them afford their monthly payments before evicting them from their homes.

Wells Fargo, the largest bank in the state of California, is the leader in mortgage originations. Officials with that bank said that the affidavits they have signed are accurate, but would not say certify that they are all signed properly.

Many states across the union are getting financial relief for its residential homeowners. With the condition of the housing industry, no state in the United States is above needing help these days. Ohio is one of the states most affected by the mortgage crisis and the federal government is trying to do something about it.

One of the new programs to help the most affected states is the Hardest Hit program. Ohio is one of the 17 states included in this program which gives financial relief to homeowners in states where the unemployment rates are the highest. Ohio received $320 million this week to help troubled homeowners – especially the ones who are currently unemployed – to get back on their feet financially. Officials expect the money will help at least 26,000 troubled homeowners avoid going through foreclosure so they can stay in their homes.

The $320 million is going to go through the Ohio Housing Finance Agency’s Restoring Stability program. This program allows unemployed homeowners throughout Ohio apply for financial assistance for their mortgage payments. A good portion of this money is going to go into a program that will pay for up to 15 months of financial assistance to unemployed homeowners. This will give them some relief as they search for a new job or go through job training.

Some of the other money will be allocated for other forms of help. For instance, some of it will go to help troubled homeowners catch up with their delinquent mortgage payments by offering one-time assistance. Another portion of it will go to help convince lenders and banks to reduce the principle so the homeowners can get a loan modification. The money for this type of relief may also go to help with short sales and other types of mortgage help.

Some are criticizing the program saying that the money is only going to help about one-third of the Ohio homeowners who find themselves in financial trouble. There were nearly 90,000 foreclosure filings last year and thousands more this year. But Doug Garver, the executive director of Ohio Housing Finance Agency, says that the program is a great start to something that could help thousands more in the long term.

If you live in Ohio and are in need of financial assistance for your mortgage payments as a result of unemployment, you can get more information about this program by going to www.savethedream.ohio.gov or call (888) 404-4674.

With the mortgage rates the way they are lately, some analysts are questioning the benefits of so many new homeowners choosing the 30-year fixed rate mortgages over the other products that are available to them. According to some, these 30-year mortgages have a number of disadvantages when compared to the mortgages in rest of the world.

In 2009, about 95 percent of the mortgages that were the 30-year long term mortgages. However, many other developed countries show much lower numbers. In fact, only about one percent of the home buyers in 2009 in Spain chose the 30-year fixed rate mortgages while about two percent in Korea did. About 10 percent of the home buyers in Canada chose these long-term products and 22 percent in Japan made the same decision. Those numbers are according to a study conducted by Michael Lea, an official with the San Diego State University real estate center.

The study also shows that these other countries where the long term mortgages are not as popular are showing lower rates of default than in the United States. As a result, Lea claims, the mortgage crisis was the result of not matching borrowers with the proper loan designs rather than the home loans themselves. In addition, there may be lower rates of default in these countries because lender rights are more protected and enforceable than they are in the United States.

Lea also found some other interesting facts about the United States mortgage industry compared to that of other countries. For instance, most other countries do not have bans on prepayment penalties for fixed-rate loans. These bans do not exist in some other countries so the lenders can receive some type of compensation for the loss of interest they will experience when a home buyer submits a full or significant payment towards paying off their loan before the terms are up. The United States simply adds this cost to all mortgage products as a way to help compensate lenders for any loss of revenue stemming from prepayments.

These days, it seems that more and more first-time home buyers are opting for a shorter term mortgage loan. The 15-year fixed rate mortgages are picking up in popularity as the mortgage rates are helping more people afford the monthly payments for a loan spread out over only 15 years. Still, the 30-year fixed rate mortgage continues to be the most popular and practical for most home buyers in any situation. The secret is to find out which one is best for you so you can make an informed and educated decision based on your individual financial situation.

If you are one of the millions of Americans who are in trouble with their mortgage loans, a loan modification may be one of your last resorts to get out of trouble and get back on financial track. But before you go through with a loan modification, there are some things you should know so you come out of the process in a better situation than you are in now. Here are five tips to help ensure a successful loan modification so you can stay in your home.

Hire a Housing Counselor
A housing counselor is trained to work on your behalf. When applying for a loan modification, a housing counselor is able to make counter offers and offer advice based on statistics and other information so you can make the best decision about your mortgage. Housing counselors do this type of work every day so they can pretty much tell you what’s going to happen and what you are going to qualify for. You can find a housing counselor certified by HUD by calling (888) 995-4673.

Determine the Best Option for You
Many troubled homeowners go through a loan modification simply to buy themselves some time with their payments. Unfortunately, as a result of this, they often do not choose the best option for their particular financial situation and they find themselves in trouble again before long. The best thing to do is to know your options, such as forbearance, repayment plans, lower interest rates and others. The more options you know about, the better position you are in to choose one that you can handle until you are back on track financially.

Be Reasonable and Fair
When trying to get a mortgage loan modification, it is important to be reasonable with your expectations. Don’t expect your loan provider to give you a handout or to do something they wouldn’t normally do. You are not going to get half of your loan forgiven or anything like that so don’t expect it. It is more realistic to expect a modification if the terms mean that you are paying less than 31 percent o f your gross income each month. Otherwise, you may have trouble qualifying for a mortgage modification.

Take Responsibility
It doesn’t help your situation to inflate your budgeted expenses in hopes of getting a lower payment on your loan modification. In fact, doing this may just result in your loan provider or housing counselor telling you to crunch those figures again until you can come up with a decent mortgage payment each month. Inaccurate information will only cause more trouble for you when applying for a loan modification so do it right the first time.

Know Your Stuff
Knowing mortgage terms and vocabulary is ideal when applying for a modification. You won’t be able to successfully change your mindset until you start educating yourself regarding your payments, obligations and responsibilities.

There was a time not too long ago when there was a horrible stigma attached to certain things like declaring bankruptcy, getting foreclosed on and simply walking away from your mortgage payments because you can no longer afford them. That stigma is changing for all three of those situations and, in fact, the stigma has all but disappeared.

One piece of evidence to attest to that is that more and more Americans are finding it acceptable to simply walk away from your home and your mortgage payment responsibility if you can no longer pay your monthly bill. More than one-third of Americans today say there are some circumstances where it may be acceptable to walk away from your mortgage and stop paying on it. This information was collected by the Pew Research Center recently and reported in publications like The Washington Post and other reputable places.

Only 59 percent of Americans surveyed said it was never acceptable to walk away from paying your home mortgage. Nearly 20 percent of those surveyed said it was perfectly acceptable to walk away from your mortgage while another 17 percent said it was only okay in certain circumstances. Oddly enough, this last option was not on the survey so the people who answered that way had to write in those answers. Of the people who responded to the survey, about 31 percent of them rented their home or apartment and 63 percent owned their homes.

More men said it was acceptable to walk away (22 percent) than women (17 percent) while 13 percent of the men surveyed said it was sometimes acceptable and 20 percent of the women agreed that the circumstances could sometimes make it okay to walk away. As far as regions go, a similar number of respondents in the East, Midwest and South said walking away was fine (between 16 and 19 percent) while 25 percent of those in the West agreed. Interestingly, only 11 percent of Republicans said it was acceptable compared to 23 percent of Democrats who agreed.


One of the reasons the stigma is beginning to disappear is because more and more people are losing their jobs. As a result, this is the worst housing crisis since the Great Depression. At the end of the June, nearly 15 percent of mortgage loans were past due and housing prices in 20 cities are down nearly 30 percent from their peak in 2006. Nearly 3,000 people responded to this survey and about 21 percent of them were underwater in their mortgage loans, meaning that they owe more on their home that its current fair market value. This is also adding to the mortgage crisis as homeowners are feeling trapped in a dead end situation. All of these factors together are bringing down the economy and making things rough on everybody.

We all know that mortgage rates are about as low as they have ever been. There is some fluctuation in the average rates depending on the type of mortgage product you choose, but these historic lows may never be seen again. Unfortunately, not everybody will qualify for these historically low mortgage rates. Here are five main factors that determine your eligibility to qualify for these low interest rates so you know a little bit about what to expect when you sign up for a home loan with your bank or mortgage broker.

Amount of the Loan
These low mortgage rates are typically reserved for borrowers who are getting an average-sized loan for their home. But if you are planning to take out a massive loan to purchase your home, you probably won’t qualify for the low rates. You will probably have to take out what is called a “jumbo loan” if you are planning to buy a high-end home in a high-end neighborhood. These types of loans will have higher rates than the low averages that are making the news these days.

Credit Score
It is probably no surprise that your credit score is going to play a major role in the mortgage rate for which you are eligible. If you have a horrible credit score, you are certainly not going to qualify for the low mortgage rates. You can wait six months or a year and work on improving your credit score. However, the rates may not be as low as they are right now if you do that. It’s impossible to predict what the rates will do over time so either way, it could be a gamble.

Occupant or Investment
If you are planning to live in the home yourself, you are more likely to get interest rates closer to the current average. However, if you are purchasing the home as an investment property, you will not qualify for the “owner-occupant” rates. You will be paying a higher rate than you normally would since it is an investment rather than a primary residence.

Region of the Country
You might not know this, but your mortgage rate is going to partly depend on the part of the nation where you are purchasing the home. Some states have lower rates than others so you might not get the lowest rates you see in the news. On the other hand, you may be able to find even lower rates than the ones advertised if the state has lower averages than others.

Paying Points
It is possible to get a lower mortgage rate if you want to pay more money upfront. This is ideal for people who have bad credit and want to buy right now because they are simply putting more money towards the purchase of their home while bringing down their interest rate at the same time.