Principal Reduction Alternatives




Principal Reduction Alternative #1

A couple of days ago, we learned that five major lenders have pledged, or to say it another way, are giving away $25 Billion Dollars as their contribution to the public to help bring back a healthy real estate economy. 17 Billion of those dollars are for helping distressed homeowners by reducing their principal, especially those who are underwater on their loan, meaning you owe more than the house can sell in today’s market.

This is the buzz; check out the National Mortgage Settlement. These 5 lenders will assist in lowering your principal balances, as long as you don’t have a Fannie Mae Loan, Freddie Mac Loan or a HUD backed loan. If your loan is with any of these 5 banks, call them already:

  • Bank of America/Countrywide  877-488-7814
  • JPM Chase 866-372-6901
  • Ally/GMAC 800-766-4622
  • Citibank 866-272-4749
  • Wells Fargo 800-288-3212

Ask them that you want to reduce your principal and that you heard about the real estate news regarding the National Mortgage Settlement. Take advantage while supply lasts… while the government is still in the mood.

Principal Reduction Alternative #2

Even if your bank is not in this list, call your bank anyway, and ask for it, even rental properties are now included. The program is called the PRA – Principal Reduction Alternative, which you will be doing if your bank is one of the above. Lenders who participated in the HAMP program are participating in the PRA, which may include your loan. For California homeowners, even if California is not conforming with the Mortgage Debt Relief Act regarding your state tax for 2013, California is still conforming with Insolvency Act, wherein includes people in bankruptcy. I have a lot to share with you in my next blog.  My time is limited, but next time I will talk more about your Bill of Rights, notifying you that your bank cannot file a notice of default once you have submitted an application for loan modification… (Lessons learned from Atty/CPA Paul Horn) Until next blog.