Hope Now, an alliance of mortgage counselors, servicers, and investors that helps distressed homeowners keep their homes, said in a recent report that they have already helped more than 2 million homeowners who are at risk of losing their homes during the past year.

The coalition was able to solve 192,000 troubled mortgage loans in July, despite the fact that foreclosures are increasing. There are 91,752 families who lost their homes in July, a 14 percent increase from June. Because of this, Hope Now is beefing up its efforts to reach out to more borrowers in danger of losing their homes through several programs. These include advertising, public announcements, giving out letters to borrowers, and nationwide foreclosure prevention events.

Despite Hope Now’s efforts to help troubled borrowers, many have still failed to respond to the letters being sent out by the coalition. Since November of last year, it has sent out nearly 1.6 million letters, and there are still more than 80 percent of recipients of who still didn’t call their lenders.

However, mortgage servicers and counselors are not giving up on these people. They have partnered with community groups and organized foreclosure prevention workshops to help borrowers get tips and on-the-spot help form mortgage lenders and servicers who also participate in the events.

Hope Now has already hosted twenty foreclosure prevention workshops since March, where a total of 11,500 homeowners received help from several industry experts present at the events.

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Homeowners See A Glimpse of Hope in Foreclosure Workshops

Up to 23.8 million American veterans can get home loan assistance through the help of the Department of Veterans Affairs (VA).

Honorably discharged veterans can seek VA’s mortgage guarantee program when applying for a home loan – take note, however, that the VA is not a lending agency, it only guarantees loans for veterans. The VA loan helps veterans get up to 100 percent financing and a 30-year fixed rate of 6.5 percent, and it doesn’t come with private mortgage insurance – extra insurance that lenders oblige homebuyers.

The guarantee program allows buyers to avail of affordable mortgages. It shoulders the 25 percent down payment if you’re a veteran, survivor, on active-duty, or a living spouse who qualify for the program. It would appear as if you purchased a home without even shelling out a penny for the down payment! How’s that for a great deal?

There are a few mortgage companies registered to participate in this program. If you want to seek help in getting the VA loan, just head out to any participating company and obtain a certificate of eligibility as proof to the lender that you’re entitled to the assistance. You get it from VA by completing a VA Form 26-1880 or from your lender through ACE (automated certificate of eligibility), a system that checks your qualification and issues the certificate online in a matter of minutes.

What’s great is that this is not a one-time offer only. In fact, you can reuse your VA loan depending on some circumstances defined by VA. There are Certificate of Eligibility Centers who track people who have used their eligibility in full. Since the program has been available since the ‘40s, there are some who may have already used part of their eligibility, but it doesn’t mean that these people could no longer enjoy this guarantee program. Depending on the situation, VA can still award these guarantees to qualified veterans.

Remember though, that there are some fees (2.4 percent) you’ll need to pay that will be rolled on to the mortgage itself. According to Secretary Peake, nearly $24 billion were extended to an estimated 135,000 veterans, survivors, active-duty personnel, and spouses last year.

If you are one of the 21.7 million US veterans who still haven’t availed of this amazing program, you can contact any Eligibility Center or get more information at www.homeloans.va.gov.

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You can avoid potential mortgage problems if you get it from the right mortgage lender. You’ll need to talk to more than one lender to get the best possible deal available, and you do that by getting to know them carefully.

Who are these guys? They are banks, mortgage brokers, homebuilders, and internet lenders.

Banks

These are controlled by state agencies and can offer you a smaller mortgage rate. And since banks have branches in different places, you can come in to any branch and speak to representatives. However, they may not have many mortgage products to offer, and they may not have the cheapest rates available in the market.

Brokers

Mortgage brokers can help you can shop for various mortgages. Their connections allow them to access different lenders who offer a better rate. With all the choices these guys can give you, selecting the best one can be a breeze. And if your loan application is refused, mortgage brokers can easily find another lender. Be careful of brokers though, because some of them act as representatives for lenders and may have the latter’s best interest at heart.

Home Builders

First-time homebuyers can easily qualify for mortgage loans with the help of homebuilders. They work with other lenders to take care of your financing and shoulder the costs of building the houses. Homebuyers won’t have to pay the mortgage until the property is finished.

Internet Lenders

Internet lenders allow you to search for the best rates online. Since the internet covers a lot more ground, more options will be available for you. More people are using this because it’s fast and more convenient. The downside here is that you’d have to take a significant amount of time to learn the lending process.

All of these types will help you land a great deal one way or another. The key is to determine which one suits you best.

Locking in your mortgage rate at the start of the application process can save you a great deal of money. Initially, when you apply for a mortgage loan, you are given the option whether to “lock in” early or to “float” your rate.

What do these terms mean? In simple terms, locking in your mortgage rate means that you agree to set your mortgage rate on a fixed status for a certain amount of time. This way, it won’t be affected by the unpredictable rise or drop of interest rates in the housing market. There are lock-ins available for as long as 60 days.

On the other hand, when you float your rate, you choose to delay on fixing your mortgage rate.

A lock-in is a good thing precisely because the interest rate is fixed. It gives you immunity when market-wide interest rates suddenly shoot up, which is something that happens quite often in today’s very unstable housing market. Think of it as a shield against economic uncertainties.

But you need to do it fast. You must decide to lock-in right away.

Consider this: real estate analysts predict that there will be a 7 percent interest rate hike by the end of 2008. Add to that the looming inflation and investors’ growing caution towards purchasing mortgage securities, which may just push interest rates higher and cause more problems for borrowers. So if you don’t want to pay high interest rates in the future, or even while your application is being processed, it’s best to secure your mortgage rates now.

If you decide to lock in only after the application process—or “float your rate” in the industry parlance—you run the risk of being caught off-guard and unprotected against abrupt and steep rate hikes. You could end up paying so much more than what you bargained for.

So how do you “lock” it in?

It’s easy: just talk to your broker. Make sure that you have a contract or binder on a home. Get your broker to give you a commitment in writing.

Remember, the key factor in this whole thing is prompt action. Lock in as fast as you can and you can get yourself a great deal.

There are some things that we don’t have control over. And when we find ourselves in such situations, there’s really nothing much we can do but to try to adjust to the situation, as with the mortgage crisis. You don’t have to sulk or be bitter if you’re one of those hit by the mortgage dilemma, because there are others who share the same plight.

A website that computes home values called Zillow.com reported that a third of Americans who bought a house in the last five years owe more than what their house is worth. Significant drops in home prices contributed to homeowners losing value for their homes, which makes them wary of selling their properties because they surely won’t get any profit. As a matter of fact, almost 75 percent of the homes sold last year were at a loss. The site also stated that there is a 9.9 percent decline in home values, making today’s median home price ($206,919) the lowest since 2004’s fourth quarter.

One way of easing the impact of the current situation is to try and sell properties, in spite of having to absorb the losses. Selling could possibly have some positive effects because unsold homes add up to the inventory in communities and could force prices further downward. This could also help cut down the foreclosure rate.

Spencer Rascoff, chief financial officer for Zillow, saw a ‘sign of optimism’ in homeowners who are accepting the situation.

“Sellers are starting to adjust their expectations, more sellers accepting a loss is actually a sign of optimism. It means that the transactions might start happening. There are so many sales contingent upon the buyer selling their home.” he says.

Other data included in the study showed that 45 percent of the homes bought during the peak of the housing market in 2006 are now ‘underwater’, meaning homeowners owe more than what their house is worth.

Zillow.com allows for computation of home values in the neighborhood. It taps public data for information on 165 markets, and its results stand for 77 percent of homes.

How would you all like some positive news for a change? Have you grown tired of hearing nothing but home values declining, foreclosures rising, people getting kicked out of their homes, and millions in losses for the two mortgage companies? Are you itching to take a break from all this negative stuff?

Brace yourselves, because by the end of the year, an estimated 500,000 families will be able to save their homes from foreclosure through the efforts of the U.S. Department of Housing and Urban Development (HUD).

In a span of one year, the government has effectively provided remedies for the housing situation, which is still suffering some difficulties. About 300,000 families have already saved their homes by refinancing into more affordable mortgages, according to HUD Secretary Steve Preston. And that doesn’t end there. Several housing assistance measures are set to provide breathing room for more troubled homeowners.

Housing and Economy Recovery Act

Last month, President Bush ended weeks-long deliberations on how to provide solutions for the tormented housing situation by signing into law the Housing and Economy Recovery Act. Its provisions will provide mortgage assistance, incentives for homebuyers, tax deductions, increased loan limits, veteran assistance, community redevelopment grant, new Fannie Mae and Freddie Mac regulator, and financial backup for the two mortgage companies.

FHASecure

This was an initiative launched by the president in August 2007. It allows the Federal Housing Administration (FHA) help low-income families, even minorities, with good credit histories but are experiencing difficulties in keeping up with payments to avoid foreclosure by refinancing to more affordable mortgages. In July of this year, FHA expanded the program to help those with adjustable rate mortgages who can’t afford and missed out on three monthly payments over the past 12 months.

Temporary increase in loan limits

From March to December this year, FHA temporarily raised the amount homeowners can borrow to help them buy or refinance to more affordable prices. The new limits range from $271,050 to $729,750.

Increased housing funds

Since 2001, HUD’s funds for 2,300 approved housing counseling agencies increased by 150 percent. For 2008, counselors got an approved $50 million while $180 million was given to a non-profit group (NeighborWorks) that helps prevent foreclosure. Another $65 million is requested for next year’s budget.

Secretary Preston recognizes the crucial role of the government in making all these programs feasible, and regards them as “a safety net for hundreds of thousands of families in need of affordable home loans.”

A wide variety of government grants is available to help you take care of all your financial worries like food, utility, and mortgage payments. Simply fill up the boxes located at the homepage to find out what government programs you may qualify for.

Mortgage dilemmas, like any other problem, are best solved if detected early. The earlier you spot some signs of trouble, the better chances you have in preventing a major predicament. This is similar to how a former chief risk officer for mortgage giant Freddie Mac claims that today’s housing crisis might have been prevented had CEO Richard Syron heeded his warning about backing risky mortgages.

But that’s all water under the bridge now. We just have to deal with the situation at hand; besides, the new housing bill has already been signed into law last month.

For our part, we mustn’t allow ourselves to be stuck in a difficult position in terms of our mortgages, and be careful in the deals we make to avoid future mortgage problems. This means we have to be responsible homebuyers. A responsible homebuyer makes sure that he or she makes certain that there is enough income to shoulder the cost of the house, and avoid risky mortgages.

Risky mortgages will cause you trouble in the future. So if you are a first-time homebuyer, make sure that you are aware of these high-risk mortgages:

• Adjustable rate mortgages (ARMs) – are loans whose rates change depending on the interest rates in the marketplace. The amount you pay for this kind of mortgage will depend on the interest rates on the loan, meaning, you pay more if the interest rate rises, and less if it falls. There are 10/1 and 7/1 ARM. 10/1 ARM means that your rate is fixed for ten years and then adjusts each year. 7/1 ARM is the same; your rate is fixed for seven years and then adjusts every year. This however, has a high chance that payments will shoot up drastically.

• Option adjustable rate mortgages – allow you to choose how you are going to pay for your mortgage each month, less or more. You can either pay a low minimum payment, pay-only the interest, or choose a 15-, 30-, or 40-year amortization schedule. This gives you the chance to base your payment scheme on your monthly budget. However, there is a risk that you don’t build equity for your house because you’re only making small payments. In addition, you will eventually owe more on your house at the end of each month.

• Negative amortization loans – sometimes result from option ARMs. This type of loan doesn’t lessen your balance because you pay so little that you don’t even cover the interest. As a result, you don’t get to pay off the balance of your loans. This will make you owe the bank more money, because aside from the principal balance, the interest rate you didn’t pay is added to your loan.

• Interest-only loans – allow you to make small monthly payments, especially if you have a varying income. You don’t pay off your balance right away because you only pay for the interest, so you end up not building any equity for your home. However, this makes it possible for people to purchase more expensive homes without paying a lot. You can also customize your amortization schedule with interest-only loans.

These mortgages all have their pros and cons, and it is up to you to choose the one that best suits your financial capability. For most people, a fixed-rate mortgage is deemed safer to utilize because this enables you to pay for the same amount each month until you pay off everything.

We always hear medical people say “an ounce of prevention is worth a pound of cure,” and this also applies to borrowers. Do not buy more than what you can afford, discuss with your brokers and lenders, and evaluate the risks you may face if you go for a particular mortgage type.

Find out how you can lower your mortgage payment by filling up the form in the homepage. 

Lawmakers have definitely considered senior citizens when drafting provisions for The Housing and Economic Recovery Act, because the new housing bill allows the elderly to take money out of their home equities through reverse mortgages.

Reverse mortgages allow homeowners aged 62 years and above to convert their home equities to cash. They can either receive monthly checks, or a lump sum free of tax. The amount homeowners can withdraw is based on the home value, amount of any remaining mortgage, homeowner’s age, and current interest rates.

The new law, signed by President Bush last week, increased the maximum amount for reverse mortgages to $625,500, with a 2 percent reduction on fees on the initial $200,000 and 1 percent on the remaining balance, with a $6,000 cap, reduced from the previous 2 percent cap. To cite an example, if you acquired a reverse mortgage worth $400,000, your origination fee will now be $6,000 instead of $8,000.

This will help many senior citizens with income problems stay in and keep their homes; a steady flow of financial resources will benefit people who are past the working age with no regular income. It can help pay for food, medical, and utility bills.

In addition, senior citizens won’t have to worry about paying back the amount they get until they move out of the house, or in the case of their death, when their inheritors sell the house. Such provision allows homeowners to maintain ownership of the title and be protected from eviction. It also prohibits sales people from taking advantage of borrowers trying to qualify for reverse mortgages, as they are not allowed to force borrowers to buy annuities, financial, and other insurance products to be eligible for a reverse mortgage.

Homeowners will never owe more than what their house is worth, regardless of how much money is taken out over the years.

If you want to qualify for a reverse mortgage, find out first what your home is worth by filling out the form on the homepage.